Oral Answers to Questions
(1 day, 13 hours ago)
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Claire Young (Thornbury and Yate) (LD)
The Chief Secretary to the Treasury (James Murray)
Thank you very much, Mr Speaker.
Through the spending review and the 10-year infrastructure strategy, the Government are funding at least £725 billion of infrastructure over the next decade. That includes investment in critical assets, such as £24 billion over the next four years to maintain and improve motorways and local roads and £7.9 billion over 10 years to maintain existing flood defences and invest in new ones. We have also committed to long-term maintenance budgets for public service infrastructure, with £10 billion of funding per year by 2034-35 to maintain and repair our hospitals, prisons, courts, schools and colleges so that providers can deliver cost savings by planning ahead.
Claire Young
The weight limit imposed on the M48 Severn bridge due to the deterioration of its supporting cables is having a big impact on local businesses and farmers who work on both sides of the Severn. National Highways estimates that it would cost up to £600 million to repair the bridge, with restrictions only postponing the inevitable. Will the Chancellor meet me to discuss the impacts and commit to providing the funding to get the bridge repaired and reopened for everyone as soon as possible?
James Murray
As was set out in the 10-year infrastructure strategy, £24 billion of capital funding between 2026-27 and 2029-30 has been allocated to National Highways, which is the organisation responsible for maintaining the M48 Severn bridge. The funding includes £1 billion to enhance local road networks and create a new structures fund, which will be used to repair a range of key local structures, such as bridges, flyovers and tunnels.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
Constituents in Marylebone want to see improvements to the railway engines that go into Marylebone station. Does the Treasury agree that more work can be done to ensure that the overall investment in those trains is supported by the benefits that accrue across the whole line, all the way down to Aylesbury, as investment in those trains will make a big difference to growth along the whole track?
James Murray
My hon. Friend is absolutely right to highlight the critical importance of investment in our railway infrastructure. We know that under the previous Government, we had chronic under-investment in the infrastructure across our country, and the railways bore the brunt of much of that neglect. We are determined to turn that around to ensure that we are investing in railway infrastructure to improve the quality of life for people and drive economic growth right across this country.
Mr Connor Rand (Altrincham and Sale West) (Lab)
Douglas McAllister (West Dunbartonshire) (Lab)
Luke Akehurst (North Durham) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
Before I start, I quickly welcome my hon. and learned Friend the Member for Northampton North (Lucy Rigby) and my hon. Friend the Member for Chipping Barnet (Dan Tomlinson) to the team. I also congratulate my hon. Friend the Member for Ealing North (James Murray) on his new position as Chief Secretary to the Treasury.
In response to the questions, I want to be clear that the 10-year national infrastructure strategy is core to delivering this Government’s growth mission to boost living standards. The strategy will fund at least £725 billion of infrastructure over the next decade and transform how projects are planned and delivered, so that we do not have the cost and time overruns that we became so used to under the Conservatives.
Mr Rand
Working with colleagues in Greater Manchester, I have been proud to campaign for greater investment in our public transport infrastructure. The Government listened and delivered £2.5 billion of funding for the Bee Network, which will allow us to create the first fully integrated zero-emission public transport system. Will my right hon. Friend explain what that will mean for my constituents in terms of jobs, growth and connectivity?
Rachel Reeves
My hon. Friend is a proud champion of the people of Altrincham and Sale West. Investment through the transport for city regions fund will allow the Mayor of Greater Manchester, Andy Burnham, to invest in local priorities, creating jobs, better commutes, bigger labour markets and more opportunity across Greater Manchester. That includes investment in the fully electric Bee Network with zero-emission public transport by 2030, including the purchase of 1,000 new electric buses made in Rochdale, Northern Ireland and Scotland. That is in sharp contrast with the SNP Government, who buy their buses from China.
Douglas McAllister
Thanks to Labour’s fiscal rules, the Government have unlocked private investment in UK infrastructure and strengthened investor confidence. The 10-year infrastructure strategy will revitalise all parts of the country’s economy, including in Scotland and in my constituency of West Dunbartonshire. Does the Chancellor agree that the UK Labour Government have put Scotland at the heart of economic growth, with unprecedented support for Scottish industries, jobs and public services, in stark contrast to the SNP Scottish Government?
Rachel Reeves
My hon. Friend is a great champion for the people of West Dunbartonshire, and I know he is working very closely with the Ministry of Defence at the moment to secure defence investment in his constituency. During the summer, I had the opportunity to spend some time in Scotland, seeing the results of our infrastructure investments—in the defence sector, carbon capture and storage in Aberdeenshire, transport investment in Glasgow, the supercomputer, and RAF Lossiemouth—and how the trade deals are benefiting industries in Scotland, including Scotch whisky.
Luke Akehurst
Can the Chancellor outline the impact on economic growth in the north-east of England she expects from the record-breaking £1.85 billion spending package awarded earlier this year for transport infrastructure in the region?
Rachel Reeves
My hon. Friend has been a good advocate for his constituents. He and I, as well as the Labour Mayor Kim McGuinness, know that investing in roads, cycleways and the metro will make a real and practical difference. This builds on the £0.6 billion that the north-east is receiving through the city region sustainable transport settlement, of which £23 million has been earmarked for Durham. Of course, my hon. Friend’s constituents will also benefit from the wider economic benefits of extending the Tyne and Wear metro, linking Washington with Newcastle and Sunderland.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
In my view, Stone railway station is one of the most attractive and beautiful stations on the west coast main line. Sadly, though, its platforms are too short, meaning that inter-city trains cannot stop there. Would the Chancellor of the Exchequer be kind enough to speak with her Transport colleagues about what future options there are for Stone to benefit from the extension of platforms, which would improve its connectivity to not just Birmingham and Manchester, but also London?
Rachel Reeves
I thank the right hon. Gentleman for his question relating to his constituency. It is a shame that the Conservative party did not invest in extending those platforms when it was in power for 14 years. I am very happy to discuss with my colleagues at the Department for Transport how the his constituents can benefit from the extra £120 billion that this Government are putting into capital investment.
Munira Wilson (Twickenham) (LD)
Over the summer, Heathrow finally published its proposals for a third runway. It is very clear that a lot of supporting road and rail infrastructure will be needed if that expansion goes ahead. Could the Chancellor outline to the House what estimates her Department has made of the amount of public investment that will be needed? Heathrow execs have been clear that they are not going to fully fund it themselves.
Rachel Reeves
This Government back a third runway at Heathrow. We are a country that is open to global trade and investment—we have done three trade deals with countries around the world and have secured £120 billion of inward investment. Heathrow Airport Ltd and others have now put forward a bid to build the third runway, and have been very clear that they will be investing in the infrastructure to make that possible. I welcome investment into Britain, and I hope that parties all across the House will do the same.
Mr Andrew Snowden (Fylde) (Con)
If the Chancellor is looking for some quick-win infrastructure projects that will unlock economic growth, I recommend taking a look at a passing loop on the South Fylde line, which would better connect trains to employment and education sites through more reliable services. It would also act as a boost for the tourism industry on the Fylde coast; people across Lancashire—maybe from other great towns such as Chorley—like to visit Lytham St Annes and the Fylde coast, and would be able to do so on half-hourly rail services. Will the Chancellor take a look at that fantastic opportunity to boost economic growth in Lancashire and the Fylde?
Rachel Reeves
I have huge respect for the hon. Gentleman, and no one in this House would want to do anything to upset Mr Speaker. I am very happy to look at investment opportunities in the hon. Gentleman’s constituency and right across Lancashire, including just up the coast in Blackpool, where we put in significant investment at the spending review earlier this year to build the housing and infrastructure our country desperately needs.
Gareth Davies (Grantham and Bourne) (Con)
The Chancellor once claimed that she had a plan for fixing the foundations with infrastructure at the very heart. Now, through a consultation that the Government hoped nobody would notice, she has found a way to tax the foundations. By looking to impose a new levy on quarries, Labour could add billions of pounds more to the costs of infrastructure projects across the country. That cannot be right. Can the Chancellor please provide the construction industry—the very people who will grow our economy—with an assurance that this proposed builders tax will not go ahead?
Rachel Reeves
The Government are currently consulting on a landfill tax. It is a consultation, and it is open for comments from right across industry, but this Government are investing in infrastructure. Compared with the plans that we inherited, which would have seen capital investment fall as a share of GDP, we are instead putting an additional £120 billion in, as well as £70 billion through the National Wealth Fund. Crucially, that is leveraging in private sector investment in transport infrastructure, including roads, railways and airports, and digital infrastructure. We are growing the economy—a far cry from what the Conservatives did in their 14 wasted years.
Wendy Chamberlain (North East Fife) (LD)
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Clive Jones (Wokingham) (LD)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
Thank you, Mr Speaker. The immediate task facing the Labour Government was to take action to stabilise the public finances and invest in our public services. On national insurance, we did that in a way that protects the smallest businesses by increasing the employment allowance from £5,000 to £10,500. That means that 865,000 employers will pay no national insurance contributions at all, and more than half will either gain or see no change.
Wendy Chamberlain
The national insurance increases in last year’s Budget not only increased national insurance, but impacted on part-time workers, many of whom the hospitality industry relies on. Hospitality companies in North East Fife have written to me directly, but they have also started to share with their customers the real impact of the cost increases they are seeing. Does the Minister agree that there has been an impact on hospitality, and will he commit to ensuring that the Chancellor delivers a hospitality-friendly Budget come the autumn?
Dan Tomlinson
I thank the hon. Member for being the first parliamentarian today who has not asked me, “Who will you be backing in the Labour deputy leadership contest?” I appreciate that very much.
When it comes to small businesses, in particular those in hospitality, overall employment has increased by 380,000 since the Government came to power. This week, I will be having discussions with members of UKHospitality to think about how we can support the sector more through the changes to business rates announced last year. We will come forward with more details on that in the Budget later this year.
Dr Spencer
I am not particularly interested in who the Minister is backing in the deputy leadership contest, but I welcome him to his place. Lebanese Please is a fantastic restaurant in Weybridge, but like many hospitality companies, it is struggling with the impact of national insurance increases. If the partly new Treasury Front-Bench team are considering going for a team lunch, I recommend the warm hospitality of Runnymede and Weybridge, where they can see for themselves the impact that this horrid, harmful tax is having on local businesses across the country.
Dan Tomlinson
I would not presume to know where the next Treasury ministerial awayday will happen, but perhaps we will have to consider the restaurant in the hon. Member’s constituency. He is a strong advocate for the businesses in his constituency. I hope he knows that I advocated from the Back Benches—and will continue to do so in government—for policies that we can implement to boost economic growth and living standards, so that more people have more money to spend in businesses such as the one he mentions in his constituency.
Clive Jones
I have had many meetings with business owners across Wokingham, whether that is world leaders in the defence industry, GP surgeries, medical manufacturers, farmers, hospitality companies or exporters. It is clear that Labour’s hike to national insurance contributions has created immense financial burdens for those companies. This policy has prevented many from hiring more staff and devastated their profits, and it is stifling growth. What steps is the Minister taking to give businesses like those in Wokingham hope that this Government do have their back?
Dan Tomlinson
The big picture on all three of those questions is that at last year’s Budget, the Government made the decision to increase national insurance in order to raise £20 billion. We have put that money into our public services, making sure that waiting lists have fallen pretty much every single month since the election. That means that we have delivered 4 million more appointments, many more people have been seen, and waiting lists are falling in my constituency and across the country. That is the difference that this Government are making: we are repairing the foundations, and making sure that we can look after people now and in the future.
Lola McEvoy (Darlington) (Lab)
This month, we see an expansion of childcare that will benefit families in my constituency to the tune of £7 million, which will go back into their pockets. What assessment has the Minister made of how that spending power will benefit growth across the economy and productivity?
Dan Tomlinson
The investment that this Government are making in childcare, which will increase the number of hours available to families with children aged nine months or older, is the right investment in the future. It is an investment in those children and an investment in making sure that parents can return to work, so that we can improve productivity in our country and have more people who are able to get back to work and enjoy the benefits that that can bring.
Steve Yemm (Mansfield) (Lab)
UK business confidence has hit a 12-month high, according to the latest figures from Lloyds Banking Group. Does the Minister agrees that this is due to the work of this Labour Government, not least the five consecutive interest rate cuts and the three new trade deals?
Dan Tomlinson
My hon. Friend is right to highlight the fact that we have had five interest rate cuts since the election. That has reduced the cost of mortgages for families up and down the country, and reduced the cost of borrowing for businesses that are thinking about investing. It is good to see that there is more investment coming both domestically and internationally, particularly as a result of our investment summit that I was pleased to attend last year.
Luke Murphy (Basingstoke) (Lab)
When I was elected for the first time last year, my constituents told me that they wanted this Labour Government to rebuild our public services, which is what our tax changes are delivering. Does the Minister agree that Opposition parties, of whatever colour, want the benefits of our investment in public services but are not willing to take the tough decisions to deliver them?
Dan Tomlinson
Yes, I agree strongly with my hon. Friend that Opposition Members continue to will the ends—they want the spending on public services—but are not willing to come forward with a plan for the means and the money to invest in our public services so that we can change things for people up and down this country.
Daisy Cooper (St Albans) (LD)
The jobs tax has hit small businesses the hardest, with statistics from the Office for National Statistics showing that vacancies among small businesses alone have dropped by 18%. This proves that the jobs tax is not only crushing growth but crushing opportunity, especially in hospitality. Have Treasury Ministers commissioned their officials to look at any of the fairer revenue raisers that we Liberal Democrats have put forward—such as taxes on the banks, the tech companies or the gambling companies—in order that the Treasury could scrap the jobs tax at the next Budget?
Dan Tomlinson
When the Liberal Democrats were last in government, they made the decision to whack up VAT on businesses, whereas this Government are doing all we can to reform business rates so that retail, hospitality and leisure industries can get the support that they need from the business rates system. The national insurance changes that were made last year protect the smallest businesses, with many seeing lower business rates or not seeing increases.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
John Cooper (Dumfries and Galloway) (Con)
Damian Hinds (East Hampshire) (Con)
The Chief Secretary to the Treasury (James Murray)
In my former role as the Minister with responsibility for the UK tax system, and on the Chancellor’s behalf, I have met farming representatives and farmers. Those discussions have included the National Farmers Union, the Tenant Farmers Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers Union, NFU Cymru, NFU Scotland and the Farmers Union of Wales. After listening, however, the Government continue to believe that the approach we have set out is the right one.
David Chadwick
Last weekend I attended the Sennybridge show, where I met young farmers from Brecknockshire who were recruiting new members and fundraising for good causes. There is one question to which they would like to hear an answer from the Chancellor: why are the Government targeting family farms for tax rises rather than going after the big banks, which are closing branches right across my constituency? Why should young farmers have to pay for the mess left behind by the Conservatives?
James Murray
The hon. Gentleman talks about good causes. I assume he would agree that the NHS is a good cause, that public services are a good cause, and that a stable economy that encourages investment in our country is a good cause to pursue. As hon. Members have said many times already, the Opposition parties, including the hon. Gentleman’s, are very happy to reap the rewards of spending and investment, but are totally incapable of taking any of the difficult decisions to raise the revenue necessary to support them.
Damian Hinds
Given the Prime Minister’s clear commitment to growth that benefits every community in every corner of the UK, his Ministers will no doubt be disturbed at polling showing that four fifths of farmers have postponed or delayed investment since the Budget. Is it not time for a rethink of this policy—if not on grounds of fairness, then on grounds of investment, productivity and economic growth?
James Murray
I have been involved in many debates in this House that the right hon. Gentleman has been a part of as well, and we have set out how the decisions we have taken mean the system coming in from April next year will maintain generous tax reliefs within the agricultural property relief and business property relief system, while also raising revenue in a fair way to support the public finances. That money for the public finances, as I and my right hon. and hon. Friends have said many times today, is crucial to have economic stability and to get our public services back on their feet.
John Cooper
The Chancellor elicited much public sympathy with her recent tearful appearance on these Benches, but over the summer I have had Dumfries and Galloway farmers in tears at the loss of the next generation of farming. A new Centre for the Analysis of Taxation report says that HMRC’s own figures indicate that these changes to taxes are unfair and unbalanced. Will the Minister please think again?
James Murray
The hon. Gentleman is wrong. The CenTax report he refers to is independent analysis demonstrating that, in its opinion, the reforms improve on the current position and are expected largely to meet the Government’s objective. In fact, the report validates the Government’s position.
Daisy Cooper (St Albans) (LD)
We Liberal Democrats oppose the family farm tax, but in the spirit of constructive opposition, last November I recommended and requested that Ministers look at the idea of a family farm test, such as the ones used in France and Ireland. Such a test would ensure that they could close the loophole on big equity companies exploiting land, but it would not cover family farms in the process. Since I raised that suggestion last November, have Treasury Ministers asked officials to look at it?
James Murray
As is the normal process in developing any policy, we consider a range of options, but we have decided that this gets the balance right: raising revenue in a fair way while offering generous reliefs within the agricultural property relief and business property relief system. Let me just say that, when I heard the hon. Lady stand up and begin a sentence with, “We Liberal Democrats oppose”, I was hardly surprised.
Rebecca Paul (Reigate) (Con)
Sir Desmond Swayne (New Forest West) (Con)
The Chancellor of the Exchequer (Rachel Reeves)
We are investing in Britain’s future and putting in place the plans needed to get Britain building again after 14 years of Tory failure. Since the election, we have had five interest rate cuts, wages have risen more in the first 10 months of this Labour Government than they did in the first 10 years of the previous Conservative Government, and we are the fastest growing economy in the G7 in the first half of this year.
Rebecca Paul
I thank the Chancellor for that response. This year, interest on debt is expected to total £111 billion, which is 8.3% of total public spending. What are the Chancellor’s plans to rebuild confidence in the gilt market, and how confident is she that we will not be reliving the worst bits of the 1970s?
Rachel Reeves
The best way to make sure that we continue to have confidence in the gilt markets is to keep the Tories and Liz Truss as far away from running the economy as possible. We have brought stability back to the economy, and there have been five cuts in interest rates. This is in sharp contrast to the disaster of Liz Truss and the clown show that we witnessed at the Reform conference at the weekend. Those two parties would lose control of spending, and push up mortgage costs and inflation. They have done it before, and they would do it all over again.
Sir Desmond Swayne
So why does the Chancellor think that the United Kingdom is being charged more in interest even than Greece?
Rachel Reeves
The spread on our gilts over the central bank rate is lower in the UK than it is in Greece, so maybe the right hon. Gentleman should look again at his evidence. The truth is that we have had five cuts in interest rates since this Government came to office. We are paying high levels of interest on the debt, but the debt was accrued by the Conservative party, which destroyed our economy and public services all at once. We are fixing the mess that the Conservatives left.
Callum Anderson (Buckingham and Bletchley) (Lab)
The trust of financial markets depends not just on the policy of the Government today, but on whether we keep that trust tomorrow. The Opposition squandered that trust when they were in government by trying to push through tax cuts that they could not afford—that the UK could not afford. Does the Chancellor agree that Labour, too, has to resist the temptation to duck the tough choices on spending, which would not only risk economic stability but hold back growth?
Rachel Reeves
I very much agree with my hon. Friend. That is why we published the spending review earlier this year. The review set out plans for day-to-day spending for the next three years and capital spending for the next five. Everything in the review is fully funded and fully costed through the difficult decisions that we had to make in the Budget last year to increase taxes. At the same time, the deficit is expected to fall by 1 percentage point of GDP this year.
Bill Esterson (Sefton Central) (Lab)
Both the Conservatives and Reform want to repeat the medicine that Liz Truss inflicted on this country, pushing interest rates and mortgages through the roof. Is not the contrast that this Government have provided stability and confidence; that, as a result, we have record levels of private investment in this country; and that we are on the right track to rebuilding this country as a success story, which can be seen in the fact that we have the fastest growth in the G7 as well?
Rachel Reeves
The Office for Budget Responsibility forecasts that debt is going to fall during the course of this Parliament—something that never happened under the Conservative Government—and that the deficit as a share of GDP will fall by 1 percentage point this year. This is a Government who have a grip on the public finances and on public spending, because of the choices that we made. All those choices were opposed by all the Opposition parties.
Dave Doogan (Angus and Perthshire Glens) (SNP)
In the spring statement earlier this year, the Chancellor said that the responsible choice is to reduce our level of borrowing in the years ahead. That is a noble sentiment, which I applaud—if she was not trying to fix a watch with a hammer. This is the Chancellor that has seen UK debt interest now soar to a 27-year high, while annual debt interest is almost twice the cost of servicing the Ministry of Defence. Given her catastrophic first Budget, what reassurance has she got for Scottish businesses that things will not get even worse when she finally has her next Budget in the winter?
Rachel Reeves
I will not take any lectures from the SNP, which has put up taxes on ordinary working people in Scotland. The SNP Scottish Government had the biggest settlement since devolution in real terms at the spending review this year. That was only possible because of the tax changes that we made in the Budget. It is now up to the SNP Government to use that money wisely and to see waiting lists fall in Scotland in the way that they have in England and Wales. Waiting lists are still rising in Scotland—what does that say about their Government?
Chris Vince (Harlow) (Lab/Co-op)
Will the Chancellor remind us whether the national debt went up or down under the previous Government?
Rachel Reeves
Let me just check—oh yeah, it went through the roof! At the same time that our debt levels went up, we have seen our public services—whether that is our schools, our hospitals, our transport or our infrastructure—on their knees. The Conservative Government managed to destroy our public finances, our economy and our public services. What an achievement. That is why there are only 120 of them and they are sitting on the Opposition Benches—and they will be there for a long time to come.
Richard Fuller (North Bedfordshire) (Con)
UK long-term borrowing costs are now consistently above the range of G7 countries—something that did not occur at any time under previous coalition or Conservative Governments. It is because markets are pricing in the specific weakness of this Labour Government’s economic policies. The cost of that weakness means rising prices, lower investment and less money for public services in the long term. Having carpet-bombed the private sector with extra taxes, will the Chancellor rein back the splurge of unproductive public spending that she let rip last year?
Rachel Reeves
The only person that carpet bombed our economy was Liz Truss and the Conservative party. The hon. Gentleman supported Liz Truss in leadership contest and throughout her time—
Rachel Reeves
He says he did not, but he served in her Cabinet, so I will take no lectures from Conservative Members. The country will have heard what the Leader of the Opposition said today: she was talking down our economy in a desperate attempt to get attention. The truth is, as Members on the Opposition Benches know, that that is not serious and it is irresponsible. The only thing in Britain that needs a bail-out is the Tory party—from its failed leadership.
Jas Athwal (Ilford South) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
In the spending review, we put significant money into building more houses as part of our commitment to build 1.5 million homes during the course of this Parliament. The Planning and Infrastructure Bill is currently making its way through the House of Lords, but more than 600 amendments have been tabled to it, mainly by peers from Opposition parties. The Labour party and this Government back the builders, whereas the Opposition parties back the blockers. They are stopping young people getting on the housing ladder, stopping renewable energy being built and stopping the transport infrastructure that we desperately need to be built. Instead of opposing and tabling amendments, the Opposition parties should back that Bill so that we can get Britain building.
Jas Athwal
I have been banging the drum for some time now that Ilford is the best place to live, and with four Elizabeth line stations, that has never been more true than now. Barking and Dagenham council and Redbridge council are both capitalising on ambitious regeneration plans, like the developments at Billet Road and Padnall Lake. What are the Government doing to encourage businesses to seize on this investment by making investments of their own, backing Ilford, its community and its economy?
Rachel Reeves
I thank my hon. Friend for everything that he is doing to champion Ilford South and to bring more investment into his local community. It is great to have Labour councils working with a Labour Government to bring investment to local communities through housing and, crucially, through infrastructure—the schools and the doctors’ surgeries—that go alongside that new housing, so that we build not just homes but communities.
Mr Gregory Campbell (East Londonderry) (DUP)
As the Chancellor tries to cut through the bureaucratic red tape around planning outlines, can she undertake that, if successful over the course of the next six to 12 months, she will share that success with the other regions and nations in the United Kingdom, so that we can all benefit from simplified planning procedures, which will bring benefits for all our constituents?
Rachel Reeves
Over the summer, I had the opportunity to spend some time in Belfast, where I visited Thales, the defence manufacturer, and Studio Ulster, where I saw some of the fantastic work in the creative industries. I also had the opportunity to talk about some of the blockers to growth. We need to better reform our planning system, not just in England but in Northern Ireland and Scotland as well, so that we can get things built in Britain again. People are crying out for hope. Growth offers hope and investment offers hope, and that is what this Government offer too.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I welcome my right hon. Friend’s commitment to the hope of decent homes. In my constituency, children and families are leaving in droves and schools are closing because of a lack of properly affordable housing. She knows, as I do, that whatever we do in planning, without the skills that we need to build those homes, there will be a block there. Is she working with the new Secretary of State for Work and Pensions, who now has the skills brief, to ensure that we are investing in those skills and super-turbocharging the people who can help to build those homes?
Rachel Reeves
Just this September, new construction colleges have started opening around the country to train up the next generation of builders, plumbers and engineers, so that we can build both the housing infrastructure and the other infrastructure our country desperately needs. We have reformed the apprenticeship system, so that we can have more foundation apprenticeships for a shorter period of time to quickly get people the skills they need. Not requiring people to have a grade C or equivalent in maths and English to access an apprenticeship programme is also so important for young children who maybe did not get the grades they wanted in their GCSEs, but deserve a chance of a good apprenticeship and a job offering a decent wage.
Tim Farron (Westmorland and Lonsdale) (LD)
There is planning permission in this country for 900,000 properties that are as yet unbuilt, so maybe the issue is not that the planning laws are too restrictive but that they are not prescriptive enough. In my constituency, the average income needed to buy the average house is £71,000 a year—11 times the average income in my communities. Is it not right to ensure that, if the Chancellor changes planning law, we have to build more genuinely affordable homes in communities like ours, rather than giving developers carte blanche?
Rachel Reeves
That cannot be an excuse, though, for blocking developments and blocking people who own land from building more homes on that land. In the end, the simple law of supply and demand means that if we are not building homes, prices will continue to be unaffordable for the hon. Gentleman’s constituents. We are not allowing builders to build carte blanche and he absolutely knows that. We put the biggest investment into the affordable homes programme that has ever been seen, because it is important that the homes being built are affordable for families in his constituency and in mine. We must not just always block things, whether they be airports, housing or other infrastructure; we have got to back the builders.
James Wild (North West Norfolk) (Con)
The Government want to drive growth through house building, but even before the departure of the Deputy Prime Minister, they were predicted to miss the 1.5 million new homes target by half a million. How does the Chancellor and her team of tax raisers think a 3,000% hike in the builders tax, adding £28,000 to the cost of building a new home, will help to deliver the new homes that young people need? Rather than consult on it, why will she not rule out this damaging tax rise?
Rachel Reeves
I think Opposition Members will recognise that building companies have strongly welcomed the reforms we have made to get the country building, and they are very much against the Conservatives, the Liberal Democrats and others in the House of Lords opposing the Planning and Infrastructure Bill, which could have been given Royal Assent by now without that opposition. Instead of scaremongering about something that is being consulted on, the shadow Minister might want to get on and back the positive things that the Government are doing.
Finally, I pay tribute to the former Deputy Prime Minister, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), for the amazing work she did to get housing on the agenda to build the 1.5 million homes that this country desperately needs, and for being an inspiration for so many people from working-class backgrounds. I applaud her efforts and her work.
Patrick Hurley (Southport) (Lab)
Liz Twist (Blaydon and Consett) (Lab)
The Chief Secretary to the Treasury (James Murray)
In July, the Chancellor announced the better futures fund—the largest social outcomes partnership fund in the world—to break down barriers to opportunity for up to 200,000 vulnerable children and young people. The fund will boost pupil achievement, and could fund programmes to reduce reoffending or provide specialist workers for children struggling with exclusion, mental health or crime. The Department for Culture, Media and Sport is responsible for the design and implementation of the fund, and it is engaging extensively with other Government Departments, the impact economy, civil society sectors and local government partners over the coming months.
Patrick Hurley
The better futures fund is a big step forward in working with the impact economy; as the chair of the social, co-operative and community economy all-party parliamentary group for the social enterprise sector, I am really pleased to see how it can unlock extra resources from social investors, private businesses and philanthropy to tackle the country’s urgent problems. Will the Chief Secretary ensure that the principles behind the fund are matched with the targeted approach advocated by the Independent Commission on Neighbourhoods, to make sure that the money goes where it is best needed?
James Murray
I thank my hon. Friend for his support of what we are seeking to achieve through the better futures fund. He is absolutely right that the fund will be designed to ensure that the money goes where it is most needed and where it will have the biggest impact—principles I think we can all agree on. As I mentioned earlier, DCMS will be working extensively with other Departments, local partners and others to design the scheme and as it gets established.
Liz Twist
Our North East Mayor, Kim McGuinness, is taking child poverty seriously, with the recent announcement of £28.6 million for the north-east child poverty action plan, including funding for a local pilot to expand specialist youth provision and support to open up pathways to future employment opportunities. How will the Chancellor work with Mayor McGuinness from the earliest stages of development of the better futures fund to ensure that it meets the needs of children and young people in my constituency of Blaydon and Consett and across the north-east?
James Murray
I was pleased to meet Kim McGuinness just last week and to hear about the excellent work she is doing to champion the north-east. On the better futures fund more broadly, we know that the design must truly be a joint endeavour—it must be built up through an open dialogue with a range of different partners who will be involved in the delivery. I reassure my hon. Friend that DCMS’s stakeholder engagement includes mayoral strategic authorities, as they will be part of that process.
Alison Bennett (Mid Sussex) (LD)
The better futures fund rightly targets the needs of vulnerable children, and one such group are those who are subject to adoption or kinship arrangements. Last week the Department for Education announced that it would renew the adoption and special guardianship support fund for one year, but did not say that it would reverse the 40% cuts in per-child funding that were announced in the spring. Does the Minister agree that reversing those cuts is vital for protecting families and keeping children in adoption arrangements, and will he meet adoptive families from Mid Sussex so that he can better understand the benefits to the Treasury that investing in adoptive families will bring?
James Murray
The hon. Member asks about an important matter. As a constituency MP, I have met families who have an interest in the fund and who are in the process of adoption themselves, so I know on a personal level from my constituency work how important it is. What the Department for Education was able to announce last week was important in confirming the extension of the fund, which will offer some certainty to the affected families. I will continue to work with colleagues in the DFE to ensure that we are doing all we can to support those families, who are playing such an important role for their children and for society.
Jim Shannon (Strangford) (DUP)
I thank the Minister for a very positive answer and for that commitment. What steps are being taken and what discussions have taken place to ensure that vulnerable young people in Northern Ireland can benefit fully from the better futures fund, particularly in the areas most affected by educational disadvantage?
James Murray
We want to ensure that the better futures fund is targeted where it is most needed and that the investment is spent in a way that really improves life chances, in particular for young people and children who face some of the biggest challenges ahead. I note what the hon. Gentleman says about the area he represents and the part of the UK he comes from; it is something we will consider as we develop the details of the fund.
Bobby Dean (Carshalton and Wallington) (LD)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
Tax reliefs are an important feature of the UK tax system, and His Majesty’s Revenue and Customs has invested significant resources in improving understanding of their cost and effectiveness. Since 2019, it has produced costings for 350 reliefs, including detailed analysis of the 38 largest non-structural reliefs, which cost more than £500 million a year.
Bobby Dean
The Minister detailed that about 350 reliefs have been assessed, but my understanding is that more than 1,200 tax reliefs are on the books, amounting to hundreds of billions of foregone revenue for the Treasury. Given that the Treasury examined the spending of all Departments in detail over the summer, I wondered whether it was considering applying the same level of scrutiny to itself.
Dan Tomlinson
It is worth noting that some 800 of the 1,200 reliefs the hon. Member mentions ensure that the tax system operates as intended by defining the scope of tax correctly and that it operates fairly and simply. I am sorry to disappoint the hon. Member, but I will not be able to comment specifically on any changes that we may or may not make to tax reliefs—any decisions will, of course, be announced at the Budget, which is not today.
Oliver Ryan (Burnley) (Lab/Co-op)
The Economic Secretary to the Treasury (Lucy Rigby)
Our financial services growth and competitiveness strategy sets out the Government’s 10-year plan for the sector, making clear our ambition that, by 2035, the UK will be the global location of choice for financial services firms to invest, grow and sell their services throughout the UK and to the world. To support this ambition, the Government announced the Leeds reforms, which are the most wide-ranging package of reforms to financial services regulation in a decade. The reforms will turbocharge growth, put more money in the pockets of working people and create more good, skilled jobs right across the country.
Oliver Ryan
I also welcome my hon. Friend to her new role. Small businesses in Burnley, Padiham and Brierfield are the lifeblood of our community, providing jobs and livelihoods to our people. Growing manufacturers and exporters such as the brilliant Barnes Aerospace in Burnley are doing an excellent job at taking Britain across the world. Will the Economic Secretary set out what the Government are doing to support small and medium-sized business, particularly our manufacturers, with access to finance?
Lucy Rigby
My hon. Friend raises an important issue, and it is very good to hear him championing businesses in his constituency. The Government published the small business strategy in July, which sets out how we will make the UK the best place to start and grow a business and puts SMEs at the heart of our growth mission. That includes tackling the barriers that SMEs face when accessing finance. That is why the Government are committed to increasing the total financial capacity of the British Business Bank to £25.6 billion and introducing a new business growth service, which will make it easier and quicker for businesses across the UK to get the help, support and advice that they need to grow and thrive.
John Glen (Salisbury) (Con)
I warmly welcome the new Economic Secretary to her role. Over the summer I looked at issues around liquidity in the London Stock Exchange and the deterioration that has happened. Given that only 15% of share trades attract stamp duty and much more trading is conducted in a dark environment, will the new Economic Secretary meet with me to hear my concerns and the concerns of those in the City so that we can move forward in a positive direction?
Lucy Rigby
I pay tribute to the right hon. Member’s work in this area, and I would be more than happy to meet with him to discuss those concerns.
Mark Garnier (Wyre Forest) (Con)
I also congratulate the hon. Member on her elevation to Economic Secretary to the Treasury; I am sure she will do very well.
The UK banking sector provides a valuable service to our economy, keeping money in circulation, funding business and mortgages and all the rest of it. The financial services sector is the UK’s biggest export sector. According to UK Finance, UK banks generate around £45 billion in tax every year, but because of things like the bank levy, UK banks now pay an effective rate of around 46%, which is higher than competitors in New York, Frankfurt, Dublin and Singapore. The Chancellor of the Exchequer has managed to dig her own £30 billion black hole in the economy, but can the Minister reassure the City of London and this House that there are no plans to increase taxes on our banking and wider financial services sector in the upcoming Budget in November?
Lucy Rigby
I am grateful for the lecture, but I note that it was the Conservatives who introduced the bank levy. The Government are committed to responsibly promoting the growth and competitiveness of the sector, and of course we keep the bank tax regime under review.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
Sorry, Mr Speaker, bear with me. [Laughter.] This Government are committed to growing the economy, and we were the fastest-growing economy in the G7 in the first half of this year. We have done three trade deals and cut interest rates five times—and I did not even need my notes to remember all that.
Steve Witherden
New polling by the Trades Union Congress shows that the public overwhelmingly support packages of taxes on wealth, on banks and on gambling companies. It also found that 74% of 2024 Labour voters who are now leaning towards Reform back those measures. Will the Chancellor commit to protecting working people from higher taxes on their income by ensuring that wealth pays its fair share, rather than imposing cuts and regressive measures?
Rachel Reeves
In the Budget last year, we got rid of the non-dom tax status, we put up capital gains tax, we started treating carried interest as income—not as capital gains—we introduced new taxes on private jets, we put VAT and business rates on private school fees and, of course, we changed the rules around agricultural property relief so that people who have farms worth more than £3 million will pay inheritance tax, although at half the rate that everybody else does. We took a number of measures last year to ensure that the wealthy pay their fair share.
Some countries around the world do have a wealth tax, but countries like Switzerland, for example, do not have inheritance tax. I think it would be a mistake to get rid of inheritance tax and replace it with an unproven tax without knowing what revenue it would bring in.
Richard Fuller (North Bedfordshire) (Con)
May I welcome the new members of the Treasury team, with their courage in joining it? I also do so for the shadow Chancellor of the Exchequer, my right hon. Friend the Member for Central Devon (Sir Mel Stride), who cannot be with us today. May I particularly welcome the new Chief Secretary, who replaces the old Chief Secretary, the right hon. Member for Bristol North West (Darren Jones), who is now another new Chief Secretary?
Earlier this year, Labour made a mess of its welfare reform proposals because they were rushed out to help plug a £5 billion gap in public finances. The result was chaos and a humiliating reversal for the Chancellor. Welfare spending is too high—it does need reform—and today the Leader of the Opposition has pledged Conservative support to help the Government to develop a thoughtful plan on welfare reform. Will the Chancellor take up this offer of support?
Mr Speaker
Order. I remind the shadow Minister that it is topicals for everybody.
Rachel Reeves
While the Leader of the Opposition is talking down the British economy, we are setting our sights on growing the economy and making working people better off. No, we will not be taking any advice from the Leader of the Opposition, who was part of a Government who crashed the economy, sending mortgage rates spiralling and putting pensions in peril.
Richard Fuller
I fear that the Chancellor’s dismissive response fails to acknowledge either the serious state of public finances or the serious difficulties of her own position. Having extended economic uncertainty until just before Christmas, will the Chancellor at least confirm that the November Budget will include savings from welfare reform?
Rachel Reeves
In the Universal Credit Act 2025, which passed before the summer recess, we reformed the universal credit system to reduce the gap between what people on the health element and those on the standard element got. That reform will help more people into work, as well as the £1 billion package of measures to help people—particularly those who have been long-term unemployed—get back to work. [Interruption.] The hon. Member for North West Norfolk (James Wild) says that that is spending. Actually, getting people into work and paying taxes, as well as paying less on benefits, is good for the economy and good for those people who get back into work.
Lauren Edwards (Rochester and Strood) (Lab)
The Chief Secretary to the Treasury (James Murray)
The Government are investing £100 million to improve hospice facilities and a further £26 million of revenue funding to support children and young people’s hospices this year. That is the biggest investment in hospices in a generation. Details about the funding arrangements for 2026-27 will be set out by the Department of Health and Social Care in due course.
Helen Morgan (North Shropshire) (LD)
James Murray
As set out at the last Budget, we will introduce permanently lower tax rates for retail, hospitality and leisure businesses with rateable values below £500,000. The relief that we inherited from the previous Government was due to end entirely in April of this year. We extended it for one year to give us time to legislate for permanently lower tax cuts for pubs across this country.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
Rachel Reeves
I thank my hon. Friend for the work that she is doing to help grow the economy in all parts of the country, including Kent and Sussex. The Government have made significant commitments on the expansion of international rail services, and we are working closely with the German and Swiss Governments on direct links between our countries. Work is under way to understand the prospects for expansion of the number of services on the channel tunnel rail link. I absolutely agree that new opportunities at Ashford and Ebbsfleet have huge potential to help grow the economy, giving more opportunities for people in those communities to access good jobs and other leisure opportunities.
Cameron Thomas (Tewkesbury) (LD)
Rachel Reeves
I absolutely recognise that businesses face challenges, but they also have lower borrowing costs because of the five cuts in interest rates, which the Bank of England was able to make because of the stability that we have returned to the economy. It would be good to have a bit more honesty from political parties. If they oppose the national insurance increase, then they oppose the extra money for the national health service. If they stood up and said that, they might get a little more respect and credibility.
Tim Roca (Macclesfield) (Lab)
Rachel Reeves
My hon. Friend is a proud advocate for his constituents in Macclesfield and is doing great work to bring more investment into the local area. Life sciences is one of the eight sectors that this Government, as part of our modern industrial strategy, are championing. That is why we put record investment into research and development in the spending review earlier this year, and why we are supporting our universities to help create more spinouts to ensure that we can have more home-grown British businesses, as well as backing the big businesses, such as AstraZeneca, that operate in his constituency.
Mr Will Forster (Woking) (LD)
Rachel Reeves
There is a consultation going on and I welcome the hon. Gentleman and others feeding into that. However, if he is serious about backing the builders and not the blockers, why do the Liberal Democrats fail to support the Planning and Infrastructure Bill, both here and in the other House?
Kim Johnson (Liverpool Riverside) (Lab)
As the sixth richest economy in the world, we should not have 4.5 million children living in poverty. The former Prime Minister Gordon Brown has proposed raising £3 billion by looking at reforming gambling taxation. Will the Chancellor consider undertaking those reforms so that we can end the epidemic of child poverty?
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The issue of child poverty is incredibly important to this Government, and the child poverty taskforce will report later this year. I would like to add that this is an important personal issue for me: I grew up in family with very little money and I received free school meals as a child. For those children across the country who are living in poverty right now, I hope that they and their parents know that this Government are on their side and that we will do all we can to invest in our welfare system, in our economy and in ensuring that more people can get into work so that we can get poverty down, rather than have it rising as it did under the previous Government.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
Hiking excise duty by 14% over the past two years was expected to raise £600 million for the Treasury in duty on spirits, but it has actually cost £600 million. With 70% of spirits produced in Scotland, this is nothing short of a tax on Scotland. The Chancellor has 77 days to back Scotch, support Scotland and sustain growth in this iconic and entrepreneurial sector. Will she therefore commit to reversing the Government’s attacks on a great Scottish success story by bringing down whisky duty in the Budget?
The Parliamentary Secretary to the Treasury (Torsten Bell)
Over 90% of Scotch is exported and is therefore not affected by the measures that the hon. Member has just mentioned, but it will be affected by being the biggest beneficiary of the trade deal with India, which is set to reduce tariffs from 150% to 75% initially, and then to 40% over time. This is what a Government getting on with backing the Scotch industry looks like.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
I have been campaigning for a long time on the reinstatement of tax-free shopping for foreign visitors, particularly those from Europe. Recent evidence from business suggests that we are losing £6 billion of income from this potential change, and £500 million in extra VAT generated from those tourists. Will the Chancellor undertake to look at this matter again? The potential exists for those high-spending tourists to benefit our hard-pressed hospitality industry, and that could be a quick win-win for this country.
James Murray
This matter was looked at by the previous Government several times, and I understand that there was pressure for their Ministers to look at it again. They did so, and they came to the same conclusion, which was not to proceed with reintroducing it.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
The Bellfield interchange is situated on the A77. Its location has significant strategic importance in the south-west trunk road network, connecting to the A71, the A75 and the A76, making it critical for transport and economic connectivity across the Ayrshire region and beyond. East Ayrshire council had previously submitted a bid to the levelling-up fund under the previous Tory Government to upgrade the interchange, but it was rejected. Given the Chancellor’s recent announcement of £66 million of UK Government investment in Scottish transport infrastructure, will my hon. Friend join me in calling on the Scottish Government to invest in and agree to vital infrastructure projects such as upgrading the Belfield interchange, to support the Ayrshire growth deal, to unlock growth, and to deliver jobs and prosperity across the region?
James Murray
I agree with my hon. Friend that it is critical that the Scottish Government use the funding they have received to invest in vital infrastructure projects that support growth and put more money in people’s pockets.
Several hon. Members rose—
Jaguar Land Rover Cyber-attack
(1 day, 13 hours ago)
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Derek Twigg (Widnes and Halewood) (Lab)
(Urgent Question): To ask the Secretary of State for Business and Trade to make a statement on the cyber-attack on Jaguar Land Rover and on what assistance the Government are giving to businesses to help protect them against cyber-attacks.
The Minister of State, Department for Business and Trade (Chris Bryant)
Thank you, Mr Speaker. I fully recognise the anxiety and deep concern that employees at Jaguar Land Rover and across the supply chain will be feeling. The Government and the National Cyber Security Centre will do everything in our power to help resolve this as soon as possible. We are engaging with JLR on a daily basis to understand the challenges that the company and its suppliers are facing, and we are monitoring the situation closely. I have spoken to the company myself, and I will have a further meeting with the chief executive officer later this week. I understand that the company has also invited local MPs to a question and answer session this Friday.
The National Cyber Security Centre has been working with Jaguar Land Rover since last Wednesday to provide support in relation to the incident. I am sorry that there is a limit to what I can say on the specifics because I do not want to prejudice the ongoing investigations.
The cyber-security of the UK, however, is a key priority for the Government—crucial to protecting the public, our way of life and the successful growing economy. We have been taking significant action to help protect businesses against cyber-attacks. We are reducing cyber-risk across the economy by making technology more secure by design. That includes the Product Security and Telecommunications Infrastructure Act 2022, introduced by the previous Government, which requires manufacturers to build security into the manufacture and operation of internet-connected devices; the software security code of practice, which sets out how vendors and developers should make their software more secure; and the AI cyber-security code of practice, which sets out how AI developers should design and operate AI systems securely.
We are also providing businesses with the tools, advice and support to protect themselves from cyber-threats. That includes the cyber governance code of practice, which shows boards and directors how to effectively manage the digital risks to their organisations; the highly effective cyber essentials scheme to prevent common attacks, reducing the likelihood of a cyber insurance claim by 92%; and a wide range of free tools and support from the National Cyber Security Centre, including training for boards and staff, the “Check Your Cyber Security” tools to test IT systems for vulnerabilities, and the early warning system to get notified about cyber-threats to networks. I urge all businesses to take up these tools and improve their cyber-defences.
It is not for me to announce future business of the House, but when parliamentary time allows the Government will introduce the cyber-security and resilience Bill to raise cyber-security standards in critical and essential services, such as energy, water and the NHS.
Derek Twigg
I am grateful to you, Mr Speaker, for granting this urgent question—as a north-west MP, you know what a large employer JLR is in the region. As we have heard, this serious cyber-attack on Jaguar Land Rover has stopped production and halted sales, and staff have been instructed to stay at home. The car plants at Halewood in my constituency and in Solihull, and other production facilities around the world, have been unable to operate. From what has been reported, JLR shut down its IT systems in response to the attack. I believe that dealerships have been unable to register new cars and—initially, at least—garages that maintain JLR vehicles were unable to order the parts they needed.
The JLR Halewood plant in my constituency is an important and valued employer. Many of my constituents are employees, which is also the case for my neighbouring Merseyside MPs. Thousands of jobs in the supply chain have been affected. I am disappointed that despite the cyber-attack happening just over a week ago to one of our most important businesses, which has nearly 33,000 direct employees and, of course, a huge supply chain, no statement has been made to Parliament on what actions have been taken to help the company or to prevent future attacks.
The latest attack raises wider issues following on from the attack on Marks & Spencer. The two instances in themselves are very worrying. One would like to believe that all companies reviewed their cyber-security after the M&S attack. If these attacks continue, there could be an ongoing and even more serious effect on our economy. What are the Government doing to help protect our businesses from cyber-crime? I have heard what the Minister has said today, but it is in our national security interest for them to work closely with business. Is there an underlying weakness in how business is dealing with cyber-security? In that regard, we heard from Ciaran Martin, former head of the National Cyber Security Centre, on the “Today” programme this morning, suggesting that companies are perhaps focusing more on protecting customer data at the expense of the security of their operations.
This House needs to hear more in the coming months about what the Government are doing to work with business and to help prevent these attacks being successful, because they are a threat to our economy and to national security.
Chris Bryant
First, I commend my hon. Friend on seeking this urgent question and you, Mr Speaker, on granting it. My hon. Friend makes the important point that Jaguar Land Rover is not only an iconic national brand, but a very significant employer—it employs 34,000 people in the UK, including in his constituency, and 39,000 worldwide. He is right that we need to ensure that cyber-security is something that every company in the land take seriously, and every public sector organisation. In my previous ministerial role I was conscious of the attack on the British Library, which was actually one of the most financially significant attacks heretofore, and it pointed the way for some of the other issues arising across the economy, which is why we have been keen to bring forward a Bill on this, as stated in the King’s Speech. We will introduce such a Bill “soon”—I think I can get away with that with the Chief Whip and the Leader of the House, although, in the words of Humpty Dumpty, when I use a word it means precisely what I choose it to mean, no more and certainly no less. As my hon. Friend says, there are serious issues that we need to address across the whole of the economy to ensure that we get this right.
My hon. Friend pointed to one person; I point to another—Richard Horne, the chief executive officer of the National Cyber Security Centre—who recently stressed that the UK faces increasingly hostile activity in cyber-space. We simply cannot afford any degree of complacency in this. There are major criminals operating in this space, as well as some malicious state actors, and some 40% of companies in the UK reported last year that they had faced some kind of cyber-attack. It is a very important issue that we take seriously.
Dame Harriett Baldwin (West Worcestershire) (Con)
I congratulate the hon. Member for Widnes and Halewood (Derek Twigg) on securing this important urgent question. I welcome the Minister to his new role, although I will never be able to rival his literary quotations.
This attack on Jaguar Land Rover is extremely concerning. The impact on that world-leading business, and on its suppliers and workers, has been significant. I hope that the whole House agrees that we must use the full force of the state to crack down on cyber-criminals. I appreciate that the Minister is constrained in what he can say, but when were the Government and the National Cyber Security Centre informed of the attack? What kind of support are the Government and law enforcement agencies able to offer Jaguar Land Rover? How much longer do the Government expect the disruption, which is impacting on the supply of vehicles, to continue?
The attack is just another in a series against British brands and iconic institutions—the Minister says that 40% of our businesses have been affected—including the attack earlier this year on Marks & Spencer. Will he elaborate on what the Government are doing to prevent future attacks? Has he identified who is responsible for the attack? Can he rule out its being a state-sponsored attack? If the group responsible for the attacks on Jaguar Land Rover and Marks & Spencer are linked, what progress have law enforcement agencies made in pursuing them?
Chris Bryant
I am not sure whether the shadow Minister is in a new role—
Chris Bryant
She is not; I will not welcome her to her new role, then—I welcome her to the Dispatch Box none the less. She asked a series of questions, and I will try to answer those that I can as precisely as possible.
First, the shadow Minister asked when the NCSC was notified and engaged. It has been engaged since last Wednesday. We have an undertaking that when people get in touch with the NCSC, the response will be very immediate.
The shadow Minister asked what engagement there is from the Government. The primary engagement is through the NCSC, which is fully engaged and devoted to the work. It is also in the public domain that the Information Commissioner’s Office was notified. I should clarify that that was not because JLR was certain that there had been a data breach, but it wanted to ensure that it had dotted every i and crossed every t, which is why it notified the Information Commissioner’s Office.
The shadow Minister asked about a timeline for getting this resolved. I wish that I could provide one, but I cannot. I think she will understand why: this is a very live situation that has been ongoing for a week. I note the points that JLR has been making. As I say, there will be an invitation for all local MPs—my hon. Friend the Member for Widnes and Halewood (Derek Twigg) should already have had one—for a Q&A session on Friday morning, when JLR hopes that it will be able to provide more information.
The shadow Minister asked what else we are doing. This summer, the Home Office undertook a consultation on our policy on ransomware. I am not saying that that relates specifically to this case—we do not know that yet and I am not coming to any foregone conclusions—but that is one of the things that we must address, and it was heartening to see resolute support from the vast majority of companies in the UK for our ransomware policy. Maybe we will come to that later.
The hon. Lady asked whether I can say who is responsible. I am afraid that I cannot. I note what is in the public domain, but I have no idea whether that is accurate and I do not want to impede the investigation. She asked whether the attack was state sponsored. Again, I do not want to jump to conclusions, and I can neither confirm nor deny anything. She also asked whether the case is linked with that of M&S. Again, I cannot answer that as fulsomely as I would wish, simply because I do not know, and I do not think anybody has come to any secure decisions on that. In one sense, all cyber-attacks are linked, in that it is the same problem, which is relatively new. The previous Government were seeking to tackle it, and we are seeking to tackle it in broadly the same way. Some of the techniques used are remarkably old-fashioned, such as ringing up helplines, which are designed to be helpful. That is exactly the same as when News of the World was ringing up mobile companies and trying to get PINs to hack other people’s phones. This is an old technique. The new bit is that sometimes people use AI-generated voices, which are remarkably accurate and can lead to further problems. I am not saying that that is what happened in this case, but some of the patterns are across the whole sector.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I congratulate my hon. Friend the Member for Widnes and Halewood (Derek Twigg) on securing this urgent question, and warmly welcome the Minister to his new role. This is an extraordinarily serious issue, and the Business and Trade Committee will soon table its recommendations on tackling economic harms such as this. Many companies such as JLR now confront a much bigger threat surface, and the peril of state-backed threats. That is why this will be a much bigger issue in the future, and why companies in this country will need more than new laws. They will need new investment incentives to clean up legacy infrastructure that is currently not safe enough.
When we took evidence from Archie Norman and Marks & Spencer in the wake of that cyber-attack, we were given a distinct impression that more could have been done by agencies to help M&S. Will the Minister reassure the House that all the lessons from how the M&S case was handled have been learned, and that the state will bend over backwards to ensure that JLR has every assistance it needs to get back up and running, and to prosecute the guilty?
Chris Bryant
The single most important thing we can do is ensure that we end up prosecuting the guilty and that people are sent to prison, such as the gentleman—well, the person—in the United States of America who was recently sent down for 10 years as part of one of these networks, which was important. I am a Minister in the Department for Business and Trade, but the Minister for Security, my hon. Friend the Member for Barnsley North (Dan Jarvis), and the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), who is on the Front Bench, are actively engaged in these discussions, and we must ensure a cross-Government approach. I look forward to what we will hear from the Business and Trade Committee. I was intrigued by what my right hon. Friend was saying about investment incentives, and I hope he might come up with some clever idea that we could put into practice once he has produced his report.
On the main point about whether we have learned all the lessons from M&S, I certainly think we have. I have read Archie Norman’s evidence to the Committee, and I hope that M&S has also learned the lessons that he laid bare. I hesitate in trying to make too immediate a connection between one case and another, because as my right hon. Friend will know, I do not want to prejudge what has happened in this particular set of circumstances.
Clive Jones (Wokingham) (LD)
I welcome the Minister to his new role. There has been a spate of cyber-attacks on important UK companies such as Jaguar Land Rover, on supermarkets and on the Legal Aid Agency. What are the Government doing to restore public and, just as importantly, international trust in the UK’s cyber-security networks? Do the Government think that the attacks have come from overseas?
Chris Bryant
That is the second time I have been asked whether this attack has come from overseas, although I suppose that is a slightly different question from one about state actors. Again, I am not going to prejudge the investigation—I can tell that the hon. Gentleman knows that, because he is smiling. He referred to UK companies, but were I speak to any of my counterparts in Europe, or in most countries in the world, I would find that they are going through exactly the same issue. Qantas, Pandora, Adidas, Chanel, Tiffany & Co., Cisco—all those companies have had major attacks over the past months, and unfortunately that is simply a part of modern business. It is a despicable practice and a set of criminal actions. We must prosecute those who are responsible and ensure that they go to jail for a very long time, so that we can protect our industry in the UK, and co-operate with other international agencies to ensure that we do the same around the world.
Maria Eagle (Liverpool Garston) (Lab)
I congratulate my hon. Friend and neighbour the Member for Widnes and Halewood (Derek Twigg) on securing this urgent question. I used to represent the Halewood plant until boundary changes, and hundreds of my constituents work at that plant, with many more working in supplier companies. They are at home and being paid at the moment, but The Sunday Times reported that prospects of a quick end to the saga are limited, and that the worldwide shutdown is costing £72 million a day in lost sales. Despite requests, local MPs have had no meaningful information from the company, although we have a 30-minute Zoom call on Friday, which is a start. What can the Government do to ensure that this disaster is brought to a close as soon as possible? These attacks threaten our economy and our national security, so what help can the Minister offer the company and my constituents at this worrying time? Things do not seem to be getting any better.
Chris Bryant
I pay tribute to my right hon. Friend for all the work that she and I did together, particularly on space, in my old job and in hers. She was an excellent Minister to do business with, and I slightly fear having her on the Back Benches as she is a very redoubtable person. Many suppliers, including Evtec, WHS Plastics, Sertec, OPmobility and a series of others, are in an even more complex situation than Jaguar Land Rover, and I will try to co-ordinate the activity that we are doing in our Department to ensure that we provide every possible support to them. I note the tone in which my right hon. Friend said that MPs were getting a half-hour Zoom call on Friday. I will try to ensure that all MPs get the support they need, so that they can do the job of reassuring their constituents. Earlier today I made that point forcibly to JLR, and as I say, I intend to have a meeting with its chief executive later this week. When I possibly can I want to keep MPs updated, either individually in constituencies, or the whole House.
Sir Edward Leigh (Gainsborough) (Con)
I congratulate the hon. Gentleman on surviving the reshuffle. This Minister adds to the general merriment of the nation, so we will miss him when he’s gone—[Laughter.] We’re all mortal. May I ask a serious question about the public sector? As it happens, I am an enthusiast for the Prime Minister’s idea of a national digital ID card as a means of countering illegal working, but it raises a whole new spectre if tens of millions of people have an ID card on their mobile phone in their pocket and malign forces—Russia and elsewhere—seek to attack us. What work are the Government doing with their Bill and in the National Cyber Security Centre to try to get this right?
Chris Bryant
The right hon. Gentleman is right on two points, and to take his point a little further, data is a wonderful thing—a gold mine, in many ways—but it is also a potential vulnerability. We must ensure that if we take people into a digital future, with digital ID cards—I am not saying that we are, but if we were to go down that route; or wherever we go, for instance with a digital driving licence, which we will have soon—we must ensure that it is safe, secure, and that people’s data is not imperilled.
I do not know what the right hon. Gentleman meant about me surviving. I love him too.
Sonia Kumar (Dudley) (Lab)
I warmly welcome the Minister to his place. In the light of the cyber-security breaches survey published in April 2025, which reported that 43% of businesses and 30% of charities experienced a cyber-attack last year, what steps is he taking to strengthen national cyber-security? How are the Government working with businesses and charities to improve prevention and ensure better intelligence-sharing, as a matter of national security?
Chris Bryant
I am grateful to my hon. Friend, who is on the Business and Trade Committee, which I will be before next week, I think. On ransomware, one of the questions is whether we know the full extent of what is going on in the UK. That is why we have suggested mandatory reporting. It is interesting that more than 70% of businesses in the UK agreed with what was in the consultation that the Home Office produced in the summer, and I hope that we can introduce further measures when the Bill comes forward. I have referred to some of the means of providing support to businesses up and down the land, but I am happy to fill my hon. Friend in with more details, if she wants to grab me afterwards.
Mr Joshua Reynolds (Maidenhead) (LD)
As has been said, Jaguar Land Rover is not the first British household name this year to experience cyber-attacks. In a recent Business and Trade Committee meeting, the chairman of Marks & Spencer said that he wished that somebody would ride in the cab with them for this experience; he felt like there was too much one-way traffic, and not enough dialogue between the Government and the business. Can the Minister reassure us that the Department has learned those lessons? Can he reassure us that Jaguar Land Rover is having that two-way dialogue, and that someone is in the cab with it at the moment?
Chris Bryant
We want to make sure that is the case. As I have said, I have spoken to Jaguar Land Rover, and I intend to have a further meeting with the chief executive later this week, though he is departing in November. Two new Ministers from the Department for Business and Trade are here. Our job and our absolute determination is to ensure that business can flourish in this country, because in the end, business largely pays the bills, keeps the lights on, keeps the NHS functioning, and keeps everything going. That is why we are determined to have a strong working relationship with businesses, in this and many other areas.
Bill Esterson (Sefton Central) (Lab)
We have heard from my hon. Friends and the Minister how wide the impact of the cyber-attack has been, across the economy. Hon. Members have mentioned the national security threat. The Minister gave evidence to the Joint Committee on the National Security Strategy in his previous role, and spoke about his confidence in the “robust” contingency plans in place for critical national infrastructure, to quote a phrase he used. To what extent does he have the same confidence when it comes to cyber-attacks?
Chris Bryant
The evidence that my hon. Friend mentions related to subsea cables, for which I think the situation is robust. In fact, we had another cut to one of the subsea cables during the summer months; it was, I think, repaired within eight days. We are one of the best countries in the world at repairing subsea cables, but we are also one of the more vulnerable countries, because we are an island nation. I assure him that we three Ministers—the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), the Minister for Security and me—will apply exactly the same diligence and lack of complacency to this issue as to the issue of subsea cables.
Sir Andrew Mitchell (Sutton Coldfield) (Con)
I thank the hon. Member for Widnes and Halewood (Derek Twigg) for seeking and securing this urgent question. It is good to see the Minister in his place, with his perennially cheerful, Tiggerish demeanour, following the reshuffle.
In the royal town of Sutton Coldfield, we are extremely concerned about this incident. The Minister mentioned WHS Plastics, which is based in Minworth in my constituency. I spoke to the chief executive yesterday in some detail; he has 2,000 employees and eight plants, and the vast majority of his business goes to Jaguar Land Rover. The Minister will know that throughout the west midlands, there are probably more than 200,000 people in the supply chain who are directly affected, and I understand that all the factories globally have been shut down.
May I ask two questions to the Minister and support what was said by the Chair of the Business and Trade Committee, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne)? First, can we have an absolute assurance that we will have full help from all the relevant agencies of the state, and that they are seriously and 100% engaged in all this? Secondly, will the Minister press for maximum transparency, so that the staff who are being sent home in very large numbers, and who are naturally very anxious and worried about this issue, can be reassured to the greatest extent possible?
Chris Bryant
Yes, all the agencies will be engaged to the fullest possible extent. As the Chair of the Business and Trade Committee said, we will bend over backwards and do everything we possibly can to ensure that this issue gets resolved as soon as humanly possible; I do not want to say when that will be, because I simply do not know. If the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) would like to pass on the details of the chief executive of WHS Plastics, I am very happy to have a call with them, and with others in the supply chain, later this week. It is often not just individual companies, but the whole supply chain that is affected. As for Tigger, I seem to recall that the final line in the song is:
“the most wonderful thing about Tiggers is I’m the only one!”
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
I thank my hon. Friend the Member for Widnes and Halewood (Derek Twigg) for securing this urgent question, and the Minister for coming to the Dispatch Box. Jaguar Land Rover is a valued employer in Wolverhampton North East and an iconic British brand, so the disruption to production and the impact on the wider supply chains have caused much concern. What action is being taken to protect businesses and supply chains from ransomware and cyber-attacks?
Chris Bryant
I laid out in my initial answer some of the things that the Government are already engaged in, such as the NCSC, which has had involvement with Jaguar Land Rover since last Wednesday. There are really good online aids that can help many companies work through how they can protect themselves better. Some of those things are relatively simple, but some are more complex; it depends on the size of the organisation. As I said, we have consulted on ransomware. As we have said previously, paying the criminals does not get us out of the hole; they are not to be trusted, and people should be extremely cautious. We do not recommend people paying ransoms in any circumstances. It does not solve the problem, and actually adds to the business model of the criminals, whom we want behind bars.
Saqib Bhatti (Meriden and Solihull East) (Con)
I welcome the Minister to his role, and thank him for recognising the anxiety of the staff in the supply chain. Jaguar Land Rover is a huge employer in my constituency, not least because I have the factory in Elmdon, which employs thousands, and there could be an effect on tens of thousands, through its supply chain. Many of my constituents will be really anxious, not least because there is a lack of information at the moment. I echo the comments of the right hon. Member for Liverpool Garston (Maria Eagle) about briefings for MPs. Can the Minister reassure my constituents that this Government will give the NCSC all the resources it needs to pursue the perpetrators? I am more than happy to work with him on that. Given the reports of losses being made every day, have there been any requests for financial support? Is he talking to Chancellor about anything like that, or is it too early to say?
Chris Bryant
I am tempted to say that it is too early to say, as the hon. Gentleman gave me that get-out clause at the end. The main thing I want to ensure is that all MPs have the information they need on a secure basis, so that they can provide reassurance to their constituents. I am sure that there will be all sorts of rumours spreading around, some of which may be very wide of the mark, and I want to ensure that JLR is able to provide information to everybody. We are going into recess next Tuesday; otherwise, I would have been more than happy to gather MPs to have these discussions in a private setting. It is probably best if we see how we go on Friday. I do not think that half an hour will suffice for a Zoom call with JLR; I will make that point to the chief executive.
Laurence Turner (Birmingham Northfield) (Lab)
I thank my hon. Friend the Member for Widnes and Halewood (Derek Twigg) for securing this urgent question, and welcome the Minister to his new role. JLR employs hundreds of people directly in my constituency, and many more indirectly. This is an extremely concerning time for them, and I hope that the Department will consider providing information directly to local MPs, in addition to engaging with the company. As has been said, this attack follows attacks on Marks & Spencer, the NHS, the British Library and other public institutions. I understand why the Minister has set out that the Government’s focus is on ensuring that companies are better protected and report these kinds of incidents, but can he assure the House that all steps are being taken to identify areas of critical national vulnerability in both the public and private sectors, so that we can try to avoid these attacks in the first place?
Chris Bryant
Yes, I can assure my hon. Friend that we do that. Of course, I fully understand that this issue comes on top of other issues for JLR this year, not least tariffs in the United States of America. As my hon. Friend knows, the Prime Minister was very personally engaged in making sure that we got a better deal with the United States, and was able to announce that in a JLR factory. I know that some voluntary redundancies are going through the normal business process at JLR at the moment; that has nothing to do with this cyber-attack. However, I can give my hon. Friend the assurance he asks for.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
Jaguar Land Rover is the largest employer in the west midlands, so every west midlands constituency is impacted by this cyber-attack. The attack on JLR is not the first of its kind, and it certainly will not be the last. Increasingly, we are seeing state actors using criminal gangs, whether they originate from Russia, North Korea or Iran, to get hard cash into their country. What more can the Minister and the state do to support our businesses with the robust defences that are required? They are fighting states, and they need this state right behind them.
Chris Bryant
They certainly have this state right behind them. Incidentally, I apologise to the right hon. Gentleman: I think I visited his constituency during the recess, and he might have known about it only 10 minutes before I arrived. We were looking at digital inclusion issues.
One thing that all businesses can do now is get a certificate for cyber-essentials, which is a programme that helps businesses to protect themselves better. I am very hesitant to jump to conclusions about overseas involvement in this situation at JLR, but of course the Government take very seriously the fact that there are undoubtedly foreign state actors who want to interfere in our businesses and, for that matter, in the way we do politics in this country. We need to keep our eyes wide open for that.
Shaun Davies (Telford) (Lab)
This cyber-attack is terrible news for Jaguar Land Rover and its supply chain. Many of those companies are based in and around my constituency. Pool Re is a publicly owned insurance provider that provides insurance cover for physical terrorist attacks, invests in terrorism reassurance initiatives, and has £2.3 trillion of assets on its books. Have the Government considered extending the reach of that publicly backed insurance scheme to cyber-incidents such as this one?
Chris Bryant
My hon. Friend has stumped me there. I do not have the faintest idea. I will have to write to him with an answer to that one.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I welcome the Minister to his new responsibilities, and on behalf of the many JLR employees in my constituency, welcome anything the Government can and will do to get JLR back to business as usual as soon as possible. On our broader defences, the Computer Misuse Act 1990 is 35 years old, and there are many who believe that its provisions impede the work of cyber-security professionals almost as much as, if not more than, cyber-criminals. Will he take this incident as an incentive to look again at the provisions of that Act, and to update it, as we need to, to make sure that cyber-security professionals can help companies such as JLR to deal with incidents just like this one?
Chris Bryant
The right hon. and learned Gentleman makes a very good point about legislation that is somewhat out of date and needs renewing. That is one of the reasons why, as we stated in the King’s Speech, we will introduce a new cyber Bill. I see the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), nodding. If we do not do that properly, I am sure that the right hon. and learned Gentleman will table an amendment to the Bill when it is debated.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I congratulate the Minister on his new role. I am sorry that we never had the opportunity to welcome him to the Science, Innovation and Technology Committee when he was at the Department for Science, Innovation and Technology, but I believe I see the new artificial intelligence and cyber Minister, my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), sitting on the Front Bench, and I look forward to welcoming and congratulating him.
The devastating JLR cyber-attack is one of a series of cyber-attacks that have been wreaking havoc on British businesses and consumers and undermining public confidence. Will the Minister confirm my understanding that neither JLR nor Marks & Spencer are deemed to be providers of essential services under cyber legislation, and are therefore not required to meet the highest levels of cyber-security and reporting requirements? If that is the case, will that change under the new cyber-security and resilience Bill, which he mentioned? If not, how will he improve cyber-resilience in our industry and society without such measures?
Chris Bryant
It is interesting, is it not? My hon. Friend makes a very good point. There is a balancing act for us to achieve: we do not want to overburden businesses with requirements, but we want to make sure they take every action to ensure they are properly protected. I will write to my hon. Friend if I have got this wrong, but my understanding is that those companies are not presently included. I am afraid that she will have to wait for the Bill, but our intention is that it will directly relate to things like energy and water supply—drinking water and things like that. As I say, it is a balancing act, trying to make sure that industry has the freedom to operate as it should while embodying the best practice.
One other thing I will say is that all businesses, whether large or small, should avail themselves of the early warning tool available from the National Cyber Security Centre whenever they think that they may have had an attack. It is really important that we have a real idea of the prevalence of this problem across the whole sector, and that we are able to join up the dots between different incidents.
Sir Julian Lewis (New Forest East) (Con)
I welcome the Minister to the world of “neither confirm nor deny”, though I fear it may cramp his inimitable style somewhat. Does he accept that there are broadly three categories of hacker? There are the show-offs, who are aiming to boost their egos in the online world; the wreckers, who are usually working on behalf of hostile countries or political ideologies; and the extortionists to whom he referred earlier, who are out to blackmail people and relieve them of large amounts of money. In every case, though, there is always the anxiety that people’s personal data is going to be compromised and publicised. To that end, is the Minister really satisfied that so many Government services that deal with personal data—the latest being His Majesty’s Revenue and Customs—insist that people go online to supply that data to Government?
Chris Bryant
The right hon. Gentleman makes a very good point about personal data. When I was the data Minister, that was one of the things I was trying to push very strongly—there is no point in trying to get people to give data if it is not then secure. That is the single most important part of what we have to do, not least because if people do not trust that their data is going to be secure, it is perfectly understandable that they are not going to surrender it. That does not just apply to Government, although it is very important in Government; it applies across all sorts of different companies.
I slightly take issue with the right hon. Gentleman’s delineation of those three groups; I think there is just one, which is a bunch of criminals. Their intent sometimes mixes a desire for cash with a desire for some kind of spurious infamy, but I just think of all of them as criminals. As for my inimitable style, I can neither confirm nor deny it.
Dr Scott Arthur (Edinburgh South West) (Lab)
I agree with those Members who have raised concerns about the impact that this cyber-attack might have on jobs. It also has an impact on our reputation as a country when two iconic brands basically have to go offline. I do not expect that this will be the last attack on either a retailer or an automotive company, but the risks to automotive companies are particularly acute, because going forward, cars are basically going to be computers on wheels. Customers will be concerned about what attacks mean for their security, but also about what the impact on the automated features within the car means for driver safety. The Minister said that the UK is increasingly a target; is that because of the interest in the UK, or because we are more susceptible?
Chris Bryant
No, I meant that every country in the world is increasingly susceptible, not just the UK. This is a growing business, and the worst thing we could do would be to feed that business model. I would urge caution about one thing. It may well be that we do not know all the incidents that have taken place, because understandably, lots of companies will not want to make them known publicly if they feel that they have managed to deal with the issue fairly swiftly. That is why, as I said, we consulted on the issue of ransomware earlier this summer, and I was gratified by the response we had from more than 70% of businesses.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Fundamentally, this is a question about resilience across British industry. These attacks are costing British industries millions of pounds a day. What are the Government doing to facilitate knowledge-sharing within industry to boost resilience and guard against operational technology attacks? I know from personal experience that people in the cyber industries like to share information together, but require a forum to do so.
Chris Bryant
The hon. Member is right. For that matter, I suspect that every single Member of the House will have had some kind of attempted cyber-attack, whether that is phishing or vishing or whatever it may be on their mobile phones, where something comes up that looks remarkably possible. Then you say to yourself, “Oh, no, HMRC probably wouldn’t ask me to do that.” I urge all Members, incidentally, to take their own personal cyber-security seriously, and the House provides facilities for that. One other thing that we can do is for all companies to follow the cyber governance code of practice and provide board training. The more that board members understand these issues, the better.
Chris Vince (Harlow) (Lab/Co-op)
I welcome the Minister to his role. Previously, I inadvertently suggested that he was not a national treasure, and I would like to set the record straight on that one. More and more often, businesses and charities in my constituency of Harlow are reliant on the internet for sales, for trade and for human resources services. What reassurance and advice can the Minister give to charities and businesses in Harlow, if they are worried that they might be the next victims of such attacks?
Chris Bryant
Basically, every organisation in the country should be considering whether they might be the next under attack. It is possible that there might already have been an attempted attack on them. Obviously, iconic brands such as M&S and JLR are possible candidates in that sense, but I urge all organisations to take these issues seriously, because the costs are dramatic, both financially and in staff power.
Carla Lockhart (Upper Bann) (DUP)
Cyber-security costs are rarely taken into account by any company, but for a company such as JLR, such costs should be easily absorbed because of its profit margins. SMEs do not have that luxury. Their profit margins will not necessarily cover the costs, and often they hold just as much personal and financial data. The Government should be coming alongside those businesses and assisting them to ensure that their security is industry-standard and that they are secure. Can the Minister give me an update on that?
Chris Bryant
The hon. Member is absolutely right that it is not just about big companies, listed companies or, for that matter, big organisations in the public sphere; it is also about much smaller ones, which may have all sorts of different attacks. I am not sure whether she is asking for financial support.
Chris Bryant
Ah, she is. I saw the nod. I am not sure how Hansard records a nod, other than the fact that I have now said it. The important point is making sure that everybody has an understanding that cyber-security is important to every single organisation, big or small, and the services of the state are there to help.
Richard Foord (Honiton and Sidmouth) (LD)
The Minister talked about a cross-Government approach, and last week the Ministry of Defence stood up the cyber and specialist operations command, building on the foundations of strategic command and bringing together more than 26,000 specialists. Can the Minister comment on what collaboration exists between officials at the Department for Business and Trade and those working in this area in the MOD?
Chris Bryant
The primary relationship is between my Department, because we have responsibility for businesses and making sure that they can prosper in the future, the Department for Science, Innovation and Technology, as represented by my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan) here, and the Minister for Security in the Home Office, but the hon. Member makes a good point. The MOD has an equal responsibility for ensuring that we are all secure.
Mr Speaker, I am sure that some kind of digital identification service will be available for identifying the right MP to call.
Jim Shannon (Strangford) (DUP)
Always rear gunner. I am pleased to see the Minister in his position. It is well earned, and we are pleased to see him where he is. He will be aware that cyber-attacks on Marks & Spencer and Co-op have left many people concerned about the security of their information online. This attack on Jaguar will heighten those concerns, and businesses in my constituency have told me that. I have been contacted by people who are concerned about the ramifications of a cyber-attack on the Government’s systems, particularly in health. What discussions have been held with Cabinet colleagues on the robustness of cyber-defence, and what information can be shared with private businesses to help them defend themselves against these criminals that we all fear?
Chris Bryant
In fact, the first of these big cyber-attacks was on the British Library, which is an arm’s length body of the Department for Culture, Media and Sport, so some of these lessons were taught immediately to Government. The hon. Member is absolutely right, and we need to make sure across every Department that not only is data—personal data and all other kinds of data—secure where it needs to be, if it is not open-source, but that cyber-attacks can be rebuffed, spotted and prevented at all costs. That is an ongoing piece of work between the different parts of Government. When we are able to bring forward the cyber Bill in the very near future—sorry, soon—I hope that we will be able to address some of these things and discuss them in the round in the House.
Diego Garcia Military Base and British Indian Ocean Territory Bill
Tuesday 9th September 2025
(1 day, 13 hours ago)
Commons ChamberDiego Garcia Military Base and British Indian Ocean Territory Bill 2024-26 View all Diego Garcia Military Base and British Indian Ocean Territory Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
18:42 - The House divided: - Ayes: 116 / Noes: 333 - Question accordingly negatived.
18:56 - The House divided: - Ayes: 330 / Noes: 179 - Question accordingly agreed to.
Mr Speaker
The reasoned amendment in the name of Kemi Badenoch has been selected. I congratulate the Minister on his new position.
The Minister of State, Ministry of Defence (Luke Pollard)
I beg to move, That the Bill be read a Second time.
On 22 May, the Prime Minister signed a landmark treaty with the Republic of Mauritius that guarantees the continued UK operational control of Diego Garcia for the next 99 years and beyond.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
Will my hon. Friend give way on that point?
Mr Bailey
I congratulate my hon. Friend on his recent appointment. It is important, right at the outset, that we understand that there has been almost no change in position. I refer him to the comments of the right hon. Member for Braintree (Sir James Cleverly) in 2023, when he stated that his
“primary objective is to ensure the continued effective operation of our defence facility on Diego Garcia.”—[Official Report, 13 June 2023; Vol. 734, c. 151.]
Can my hon. Friend confirm that that has not changed?
Mr Speaker
Order. I know that the hon. Member also wants to make a speech. I would not like him to use up his whole speech in an intervention in the first 10 seconds of the debate.
Luke Pollard
It was a timely intervention. I am happy to confirm that this precise deal delivers on the objective as originally set out when the Conservatives were in government. It secures the continued operation of the UK-US military base.
Several hon. Members rose—
Luke Pollard
To be fair, I will give way to one Opposition Member, and then I will make some progress. I give way to the former Deputy Prime Minister.
Sir Oliver Dowden (Hertsmere) (Con)
I congratulate the hon. Gentleman on his appointment. I had not intended to intervene so early, but I will, given that the record of the previous Government has come up. Can he confirm whether it is the case, as was the position under the previous Government, that we will retain sovereignty after 99 years on a rolling basis? Can he confirm the basis on which he is compensating the Mauritians, because it certainly was not the case that the last Government would have agreed to a remotely similar sum being paid? On this, as on so many other measures, there is an enormous gap between the negotiating position set out under the last Government and the total capitulation by Labour when they came into office.
Luke Pollard
To borrow a phrase, if the right hon. Member shows me his, I will show him mine. The whole point is that our deal is published. If he would like to go into the files and dig out his deal and publish it, we would be able to see where this deal has enhanced those protections, secured the operation of the base and got a better deal for the British people. I would be very happy if he would like to go into his files and publish the deal.
Several hon. Members rose—
Luke Pollard
I will come back to the former Deputy Prime Minister and then I will make some progress.
Sir Oliver Dowden
The Minister invites me to respond to him. He needs to appreciate that there is an enormous difference between a tough negotiating position in the British national interest and the capitulation of the Government’s deal.
Luke Pollard
I do not think the right hon. Gentleman wants to show me his draft deal, and there is a very good reason for that: this deal, this treaty and this Bill improve on that deal.
Luke Pollard
I said I would take one intervention from each side of the House. I have done that, so I will make some progress, but I am certain that Members will get another chance in a moment.
This treaty is indispensable to keeping Britain secure at home and strong abroad. It is an expression of our unbreakable defence and intelligence bonds with the United States. It strengthens and extends our power to respond to terrorists and hostile states, wherever they may be. It protects some of the world’s busiest trade routes, on which British businesses and consumers rely. It is a long-term investment in our core national interests, and it will benefit British people for generations to come.
Luke Pollard
I am going to make some progress, but I will be happy to give way in a moment.
Before I start getting into the detail, I want to recognise up front the Chagossians affected by decisions taken by Britain many years ago. We recognise in the preamble to the universal deep regret over what happened. It is acknowledged on the face of the treaty, and I know there is cross-party support for the Chagossians, although there is a range of views on the deal within the Chagossian community. I want to place that on the record right at the start of the debate—[Interruption.] I will return to the Chagossians in a moment.
Both Houses have now had the opportunity to scrutinise the treaty under the Constitutional Reform and Governance Act 2010. The Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is sitting next to me, gave evidence to three parliamentary Committees during the scrutiny period, allowing Members of this House and the other place to fully interrogate the details of the treaty. The International Agreements Committee concluded that if the treaty were not ratified, the future of the base on Diego Garcia would be at greater risk. The purpose of this Bill is to make the necessary changes to domestic law to implement the treaty, so that it can be ratified and brought into force.
Let me remind the House why we needed to secure this treaty. The Diego Garcia base is central to our national security—I know that all Members of this House will recognise that very simple fact.
Luke Pollard
I am going to make a wee bit more progress, but I always like giving way to a Luke, and I will do so in a bit—do not worry—but not quite yet.
I pay tribute to all Members of the House who have taken the time to scrutinise the treaty in detail.
Allow me to set out why it is so vital. The importance of the base cannot be overstated. The joint UK-US base on Diego Garcia has played a vital role in defending the UK and its allies for over 50 years. The base plays a key role in operations that support UK forces and our allies across the middle east, east Africa and south Asia. Its deepwater port, airfield, and advanced communications and surveillance capabilities, give the UK and our allies crucial strategic capabilities, which have played a key role in missions to disrupt high-value terrorists, including Islamic State threats to the United Kingdom.
But the base on Diego Garcia was under threat. Had we not signed the treaty, we could have faced further legal rulings against us within weeks, because the negotiations begun by the Conservatives had been stayed. Further legal rulings might have included arbitrary proceedings against the UK under annex 7 of the UN convention on the law of the sea, known as UNCLOS.
Luke Pollard
In a moment. I will come to the hon. Gentleman—he should not worry.
A judgment from such a tribunal would be legally binding on the UK. It would impact on our ability to protect the electromagnetic spectrum from interference, and impair our ability to ensure access to the base by air and sea, to patrol the maritime area around the base and to support the base’s critical national security functions.
Alex Ballinger (Halesowen) (Lab)
My hon. Friend has spoken about the important capabilities of this vital US-UK base. Does he agree that it would be dangerous and counterproductive to put those capabilities at any risk—certainly if that could have happened in a matter of weeks or months?
Luke Pollard
I agree, and it is precisely the reason why the Conservative Government started the negotiations in the first place. You do not accidentally rock up one day to the Foreign Office and decide to start international negotiations; you do so because there is a clear risk to the future of the military base. That is why the Conservatives started the negotiations, why they had 11 rounds of negotiations, and why we had to conclude the deal.
Luke Pollard
As I have taken one intervention from this side of the House, I am happy to take another from the Opposition Benches.
Sir Roger Gale
The International Court of Justice ruling is not binding. It is not in law. We did not have to abide by it. Why are we giving away British territory to Mauritius and then renting it back? There was no need for us to do so. Why are we doing it?
Luke Pollard
I have a lot of time for the right hon. Gentleman. The provisions of those judgments affect the operations of the base—that is what is important here. It is also about the extension of the judgments, because other powers could be used on the basis of those judgments. That is the reason that the Conservatives started the negotiations. [Interruption.] If they would like to explain that there was a better reason that they started the negotiations—if it was not to ensure the security of this vital base—they are welcome to do so.
Luke Pollard
If the hon. Gentleman would like to explain why the Conservatives started the negotiations, I am happy to give way.
Paul Holmes
I thank the Minister for giving way, and I welcome him to his new position. He keeps saying “could”, “if” and that things “might” have happened. Will he accept that the legal judgments that have been cast down, which he is using as evidence, are not binding? Does he accept that when he talks about our deal—in other words, the last Government’s deal—he is actually being a bit duplicitous? There was no deal, because we ended the negotiations.
Luke Pollard
I think the Opposition have got their attack line sorted, but not the reasons why they started the negotiations.
Mr Speaker
Order. I did not like the word “duplicitous”, and I definitely did not like the carrying on afterwards. I am sure that “duplicitous” will not be said again today.
Luke Pollard
Thank you, Mr Speaker. I will make some progress, but I will take Members’ interventions in just a wee moment. [Interruption.] The shadow Foreign Secretary will get a go in a moment, but if she wants to continue shouting at me, she is more than welcome to do so; I will make some progress in the meantime. I hope she understands that this debate is best approached in a good-natured way, and I am certain that she will be doing so, with less shouting.
Luke Pollard
As I just mentioned—the hon. Gentleman might have missed it—I will give way in a moment, but I will now make some progress.
Courts and international bodies were already making decisions that undermined our position. Others would have followed suit, taking us down a path towards making the base inoperable. This Government will not allow that to happen. There has been a wealth of misinformation on these legal points, and those who have suggested that the UK should simply ignore international law fail to recognise the true impacts of these cascading adverse rulings, which would have not only impeded our ability to control and operate the base, but would have swiftly undermined our ability to control the waters, the air and the electromagnetic spectrum on which the base relies. Such rulings would have fundamentally undermined the very capabilities that make the base so uniquely valuable to the UK and the US, our allies.
This treaty eliminates that legal threat. Under the treaty, the UK will retain all the rights and authorities necessary for full operational control of Diego Garcia. It provides for unrestricted use of the base.
Luke Pollard
In just one moment.
The treaty provides for control over the movement of all persons and goods on the base, and for control over the electromagnetic spectrum used for communications. It ensures that nothing can be built within a buffer zone of 24 nautical miles without our say so, and it delivers an effective veto on any development in the Chagos archipelago that threatens the base—something that the previous Government failed to secure in their negotiations. It prohibits foreign security forces from establishing a presence on the outer islands.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I congratulate the Minister on his new position
May I get one little moment of agreement here? The Government say they abide by the law. Given the opt-out that we had, the original judgment was specifically not found in law, because we did not allow the ICJ to rule on Commonwealth issues. The question is a matter of law, so if the Minister is suggesting to the House that other actions would have taken place, they would have been unlawful. In what world was it necessary to block off those by assuming that this was law? It was not lawful.
Luke Pollard
The Foreign Office and the Government published the Government’s legal position when the treaty was laid. That assessment says:
“The longstanding legal view of the United Kingdom is that the UK would not have a realistic prospect of successfully defending its legal position on sovereignty”
in any future sovereignty litigation. That important and long-standing view predates this Government. Again, it was one of the reasons why the Conservative Government began the negotiations and held 11 rounds.
Alex Ballinger
Does the Minister not think it is the height of hypocrisy for those in the last Government, who negotiated 85% of this treaty over 11 rounds, to wait until they were in opposition to make these claims, none of which they made during their negotiations?
Luke Pollard
I thank my hon. Friend for that. It must be quite a freeing experience, because we now know that nearly every single legacy Tory MP during the last Government—whose Ministers started the negotiations, negotiated a deal, and made statements and answered questions in this House—were not actually supporting their Front Benchers, which is what we saw, but were deeply upset with the Conservative Government. If that is their genuine position, not just their political position now, they should have raised those concerns with the Foreign Secretary at the time. They should have been clear about it, but I believe that not many of them did so, and that tells a story.
Simon Hoare
I welcome the hon. Gentleman to his promoted position. If he is asking the House to thank him for negotiating what we already have, I think our thanks will be a long time in coming, because the outcome of the negotiations is pretty poor as far as this country is concerned. Surely we have given away what is of most strategic importance in this space as we now have to notify the Mauritian Government any time we want to do anything there. We do not currently have to do that, and therefore the element of surprise has been lost.
Luke Pollard
I have a lot of time for the hon. Gentleman, but I am afraid he is incorrect about the notification criteria. There is a lot of fake news out there—which I and the Minister beside me, my hon. Friend the Member for Cardiff South and Penarth, have corrected in this House before—about the suggestion that pre-notification of action is required; it is not. As is explicitly set out in the documents, we do not need to undertake pre-notification. It is established under the criteria that post-action notification for overseas bases is normal, and that would be normal for the UK and our overseas allies that have overseas bases. It is not unusual, and he will be familiar with the fact that there is further international reporting of any military action. It is important that we go on the facts. Some people are worried about the situation that the hon. Gentleman outlined, but I can reassure him that they do not need to worry about it, because what he said is not accurate.
Graham Stringer (Blackley and Middleton South) (Lab)
I sincerely congratulate my hon. Friend on his new position. I have to say to him that I have never found it a satisfactory basis for arguments or positions in this Chamber to say that those on the other side are doing it. However, I do think it is important that we are consistent. When we were in opposition and the Conservatives were in government, they made the Foreign Secretary a Member of the House of Lords, and we created about it. We shouted about how someone in a senior Cabinet position should be directly accountable to this House. We now have a super-active Attorney General making many controversial decisions. Does my hon. Friend agree with me that we should be making the case that the Attorney General should be in this House, not the other place?
Luke Pollard
That is not a matter for me in relation to this Bill, but my hon. Friend has put his views on the record, and I am certain that others on the Front Bench will have heard what he has said.
Several hon. Members rose—
Dr Luke Evans
The Minister has made it absolutely apparent that this is about the long-term security of the base, so could he explain why, under article 13, if after 99 years the Mauritians decide not to negotiate, the base will just stop. We will get first refusal, but we can easily see that the Chinese would outbid us because we in this country decide that that is not affordable. We are a hostage to fortune, and that base will crumble. He has not secured the base, he has just deferred the issue by four generations, and this House will then have to decide what to do.
Luke Pollard
It is good that the hon. Member has read the detail of the treaty. As he will know that, at the end of the initial 99-year lease, a first refusal will be offered to the United Kingdom. That is the right place to be, and that offer will mean—as he describes it, in four generations’ time—there is a decision for this House to take about what it wants to do based on the circumstances at the time. This gives us first refusal, so we can conceivably see that full control of the UK-US base on Diego Garcia could extend well beyond the 99 years I have mentioned.
Richard Tice
Does the Minister accept that we owned the freehold of the Chagos islands, and does he agree with me that in the mid-1960s we paid Mauritius £3 million in old money—some 80 million quid in today’s money—to cede all future claims over sovereignty?
Luke Pollard
The legal analysis that this Government have received, and indeed that the last Government received, showed that the position of UK sovereignty over the Diego Garcia military base was putting the base’s operation at risk. The reason why the last Government began the negotiations was to secure the continuing operation of the base, and it is the reason why we are doing so. Securing the future operation of that base is the primary concern of this Government. Indeed, as we heard from my hon. Friend the Member for Leyton and Wanstead (Mr Bailey), it was the primary concern of the last Government as well. That is what this deal secures, and it is really important that that is understood clearly: the base is what matters in relation to its continuing operation, and that is what this deal secures.
Luke Pollard
I will give way to the right hon. Gentleman first and then come to the hon. Gentleman.
Jeremy Corbyn
Could I ask the Minister to return to the human cost and the human story? In 1968, the Chagossians first began to be removed from Diego Garcia and the archipelago. Their treatment was abominable and disgusting by any stretch of the imagination. It needs a bit more than a statement of regret; it needs a full-hearted apology to all the Chagossian people for the way they were treated.
Since there is a legal judgment that the Chagos islands in their entirety, including the archipelago and Diego Garcia, should return to Mauritius, is this treaty not just completing work that was not properly done in the 1960s? Would the Minister confirm that the question of returning to live on the outer islands is agreed, but be clearer about the Chagos islanders who want to return to Diego Garcia, either to visit or to reside, in the future? History has treated them badly, and that needs to put it right.
Mr Speaker
Order. I always respect the right hon. Gentleman, and I could put him down to speak because of his knowledge—if he wants me to, I can certainly add him to the list—but it would be better if we had shorter interventions.
Luke Pollard
I agree with the right hon. Gentleman about the way the Chagossians were treated. For those who have a copy of the treaty to hand, part of the preamble says that the parties are
“Conscious that past treatment of Chagossians has left a deeply regrettable legacy, and committed to supporting the welfare of all Chagossians”.
That is in the treaty because their treatment was unacceptable, as he has explained, and it has caused a legacy of pain and suffering for that community. It is the reason why the Foreign Office Minister, my hon. Friend the Member for Cardiff South and Penarth, has engaged so much with the different views of a range of Chagossian voices in this debate.
I will come on to answer the right hon. Gentleman’s question when the interventions slow down a wee bit but, to get ahead of that, people will be able to visit Diego Garcia. Chagossians will be able to visit Diego Garcia as part of this treaty, which they are not currently able to do, but they will not be able to reside on Diego Garcia. They will be able to do so on some of the outer islands, for which the provisions will be different, but the military base is a military base for a reason, and although people will be able to visit, they will not be able to reside there. I will come back to that in due course.
Luke Pollard
If the hon. Member does not mind, I will come back to him when I deal with the Chagossians later, but in the meantime I am happy to take the other intervention.
Lincoln Jopp
I am grateful to the Minister for giving way on the negotiations. He is making great play of the fact that the previous Government started the negotiations and that there were 11 rounds of them. Is he not aware that, in 1965, the United Nations passed a resolution saying that we should enter into conversations with Argentina over the Falkland Islands. Those negotiations went on for 17 years and ended in 1981. In 1982, we all know what happened. So it is not where we start; it is where we finish.
Luke Pollard
I say politely to the hon. Gentleman—for whom I have a lot of time, and I respect his military service—that that comparison we have seen of the British Indian Ocean Territory with the Falkland Islands is shameful. I have seen the tweets from the Conservative party asking, with a map of the Falkland Islands, “Are they next?”—a shameful comparison, which stokes the flames of division and threatens the sovereignty of such overseas territories. Let me be clear, as my hon. Friend the Member for Cardiff South and Penarth from the Foreign Office has been clear at the Dispatch Box: there are no changes or implications for any other British overseas territories. Indeed, the British overseas territories support the deal. I hope that we will not need to revisit this again, but any implication that seeks to apply the experience of BIOT to other overseas territories is unhelpful to them. I am certain that the hon. Gentleman wishes to create no question marks over those overseas territories.
Phil Brickell (Bolton West) (Lab)
To go back to the point that the Minister was making earlier about control, can he confirm to the House that, contrary to the reasoned amendment in the name of the hon. Member for Clacton (Nigel Farage), we are not ceding control of the Diego Garcia military base, consistent with clause 3?
Luke Pollard
My hon. Friend is exactly right. On the reasoned amendments, my colleague who is to conclude the debate, the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth, will respond to some of the details of the reasoned amendment selected by Mr Speaker. However, there is a lot of misinformation about this treaty, and I believe that in some cases it is deliberate misinformation to confuse the picture. Clearly, securing the operation of the base is the priority of this Government and of this treaty. Indeed, I believe in good faith that it was the priority of the previous Government as well, which is why they started the negotiations and held them for 11 rounds, and why we concluded them, because we agreed with the previous Government that securing the future operation of the base was the priority. That is why they started them; that is why we completed them.
Graeme Downie (Dunfermline and Dollar) (Lab)
The Minister has already outlined the support of the British overseas territories. Will he please remind us of who else supports the Bill? Who supports it and who else opposes it, in addition to the Conservative party?
Luke Pollard
I will come to the level of international support in a moment, but our allies back this Bill and support it strongly. When we look at which column people choose to be in—the column of those in support of the Bill, with our allies, with India, the United States and others, or the column of countries and people who oppose it—I know which side I am on. I am on the side of our allies. It is up to each of the opposition parties to choose whether they oppose the Bill and to decide which column they are in. That is a choice not for me, but for them. Only one column has our allies in, including our principal security partner, the United States. It is on the side of the treaty.
Sir Edward Leigh (Gainsborough) (Con)
I have long been interested in Diego Garcia, not least because I am one of the few Members of Parliament who has visited it, 40 years ago with the Defence Committee. May we get some certainty? Every time we mention the £35 billion estimate of the Government Actuary’s Department, the Minister’s colleague, the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty), brushes it aside and says that he does not recognise the number. Given that we are spending a lot of taxpayers’ money on this—something we already owned—will he tell the House in detail how much the agreement will cost us over its lifetime?
Luke Pollard
I am grateful to the Father of the House for helping me to get back on track with my speech, because that is the topic of my next section. I will answer the right hon. Gentleman’s question in my remarks, but if a bit is missing, he may ask to intervene on me again.
We have heard some outrageous claims artificially boosting the costs of this deal. It will cost an average of £101 million per year in today’s money. That is an investment in today’s money of £3.4 billion over 99 years. That has been rigorously calculated, based on net present value, the methodology endorsed by the Government Actuary’s Department and the Office for Budget Responsibility. All the associated costings have been laid previously before the House and were explained in full at the time of signature.
Crucially, the exaggerated numbers that have been cited ignore inflation, the OBR deflation mechanisms and the Green Book. The Government have secured a strong deal. I remind those who criticise it that the previous Government knew full well that the status quo was dangerous and unsustainable—that is why they entered into negotiations in the first place, why they held 11 rounds of negotiations under successive Prime Ministers, Foreign Secretaries and Attorneys General, and why the Conservatives have never been able to provide serious alternatives to this deal.
Luke Pollard
I am happy to give way to the hon. Gentleman and then to my hon. Friend.
Dr Luke Evans
Can the Minister point to any other country in the world that has used NPV to give away sovereignty? As far as I am aware, there is none, so why are we pioneering that way forward?
Luke Pollard
This deal secures the base. The calculated value of the deal uses the Green Book. Other countries look at overseas bases that they rent and make the calculation based on their national accounting standards. We base it on the Green Book. Indeed, the Green Book was updated by the previous Government and has been used for such decisions for the past 20 years.
Several hon. Members rose—
Luke Pollard
I will return to the Green Book in a moment, but will give way first to my hon. Friend the Member for Leyton and Wanstead (Mr Bailey). I am trying to be fair to everyone.
Mr Calvin Bailey
Will the Minister place that £101 million in context? Perhaps the US or other nations have entered into such agreements. Will he make reference to the value for money that we received for the deal?
Luke Pollard
The deal represents broadly 0.2% of the defence budget. The total deal represents less than the cost of the unusable personal protective equipment acquired by the previous Government and burnt during the first year of the pandemic. A helpful comparator useful for the House to know about is the French base in Djibouti. Recently, France agreed a deal with Djibouti worth €85 million per year to rent a base. Diego Garcia is a larger—15 times larger—more capable and more strategically located military asset and, importantly, it is not next to the Chinese naval base that sits next to the French one in Djibouti. As a comparison, that is useful for people to understand in terms of present value.
Dr Andrew Murrison (South West Wiltshire) (Con)
Will the Minister give way?
Dr Murrison
I congratulate the Minister on his promotion, but must say how sorry I am that his first outing has been to defend this load of nonsense. What does he say to the UK Statistics Authority and to the Government Actuary’s Department, which appear to have a very different view of the costing of this to the one that he has just outlined? Is it not the case that what he has said represents a load of accounting double-speak and is dubious, to put it politely and in parliamentary terms?
Luke Pollard
That is not quite correct. Indeed, unfortunately, this is not my first outing. My first outing was at Defence questions yesterday, supporting British jobs in the defence sector and celebrating the £10 billion frigate deal that this Government achieved. My second outing was yesterday afternoon with the statement on the defence industrial strategy, making the case for more investment in British businesses. My third outing, though, is here today, securing the most vital military base that the UK and the US operate together. It is absolutely right that, as part of it, we present the costings to Parliament. It is also precisely right that those are reviewed properly by the Government Actuary’s Department and the Office for Budget Responsibility. That has happened, and that is why we have been able to use the figures with certainty. The costings are also entirely consistent with the Green Book.
The Green Book point is a useful one to dwell on for one moment, because if the policy of the Conservative party is not to use Green Book calculations for long-term investments—the same Green Book used for costings of our nuclear deterrent or pensions—I want to understand how much spending the Opposition are now committing to. In how many other examples would the Green Book no longer apply? What are their new accounting principles and what would be the increased cost to the public purse? How many more people will pay increased taxes, because of their disapplication of the Green Book principles? Those are entirely fair questions. The shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), signed the reasoned amendment, so surely he would be able to say how many other areas the Green Book no longer applies to. Perhaps the Opposition Front Benchers will be able to specify any other areas that they no longer believe that the Green Book applies to. We calculated our figures based on the Green Book, and that is why we are confident in them.
Several hon. Members rose—
Luke Pollard
I will take two more interventions, and then I will make some progress. I am aware that the debate is one that people want to speak in.
Lincoln Jopp
If the Minister is such a big fan of the social time discounting method that has been applied, will he tell the House where the social time discounting method has been used in other parts of Government to generate net present value?
Luke Pollard
The hon. Gentleman will know that we have published the full methodology, and that the social time preference rate is only one part of the calculation that we have used; we have also used the OBR’s inflation deflator mechanisms as well. He will also know that we published the full costings at the point of the treaty being applied.
Several hon. Members rose—
Luke Pollard
I will make a little bit more progress and then I will come back to the hon. Gentleman. [Interruption.] I can hear the shadow Foreign Secretary has gone back to her shouting again, but it is still not the politest way of running the debate. Let me keep going.
It was left to this Government to finish what our predecessors were unable to deliver. In doing so, we have secured a much stronger deal that will protect our interests well into the next century. Let me remind the House of the international context. The ruling of the International Court of Justice against the UK was a low moment for our country globally. It left our allies fearful that we might lose control of the base, it left our adversaries with opportunities to exploit, and it tarnished our reputation in the global south. In contrast, as we have heard on countless occasions from a range of colleagues, this deal has been welcomed wholeheartedly by our allies and the wider international community.
Alex Ballinger
Does the Minister agree that it is completely wrong for the hon. Member for Clacton (Nigel Farage) and Reform UK to claim that President Trump did not support this deal, when he said it was a “very strong” deal that was secured for a “very long” time?
Luke Pollard
In support of the deal, the US Defence Secretary, Pete Hegseth, put it well when he said:
“Diego Garcia is a vital military base for the US. The UK’s (very important) deal with Mauritius secures the operational capabilities of the base and key US national security interests in the region. We are confident the base is protected for many years ahead.”
President Trump has described the deal as “very long term” and “very strong”.
That follows a rigorous US inter-agency process, involving the whole of the US security apparatus, both under the previous Biden Administration and the current Trump Administration. This involved the Department of Defence, the National Security Council and the intelligence agencies, including the CIA. Do Conservative Members say that they do not trust the assessment of the CIA, the US and all the security apparatus? The deal secures the use of the base—they are happy with it and we are happy with it. Our Five Eyes partners recognise the benefits of the treaty for our collective security. The deal is supported by Japan, South Korea and India. It is also a deal publicly welcomed by the African Union, the UN Secretary General and the Commonwealth.
I turn now to the issue of Chagossians, which needs to be raised as well. While the negotiations were necessarily conducted on a state-to-state basis, we are alive to the diverse views of Chagossians about their future, and we have the utmost respect for their past suffering.
Luke Pollard
I will come back to the hon. Gentleman in a moment.
Although the Chagossians could not be part of the negotiations as they were conducted on a state-to-state basis, both the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), and Foreign and Commonwealth Development officials have met and had regular meetings over the past year, and stayed engaged with their diverse views. There are diverse views within the Chagossian community that are strongly held, and we have listened and respected those.
Dr Al Pinkerton (Surrey Heath) (LD)
As some Members laugh about the nature of the 99 years and other Members talk about the sums of money involved, I ask all of us to look at the Public Gallery to remind ourselves that there are Chagossians here today who feel deeply aggrieved by the deal. They feel that the Foreign Office and this Government have not gone above and beyond to consult all the groups involved. The Minister said that this deal does not refer to other overseas territories, but the principle of self-determination of our overseas territories’ citizens—
Madam Deputy Speaker (Judith Cummins)
Order. Interventions need to be brief.
Luke Pollard
I understand the hon. Gentleman’s argument. It is the reason why, right up front, before I went into the military utility of the base at Diego Garcia, I wanted to speak about the Chagossians. It is important. I will come on to the engagement that the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth, has had in this respect, but I understand the strength of feeling that the hon. Gentleman describes. I will come to the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), and then I will make progress.
Sir Bernard Jenkin
I am most grateful to the Minister for giving way. I am afraid my question goes back to the cost of the deal, which will hang around the Government’s neck like an albatross for the rest of their time in office. We know that the Government Actuary says the gross cost is £35 billion. Please can the Minister enlighten the House and help hon. Members to understand his own calculations? What is the meaning of “social time discounting”?
Luke Pollard
The hon. Gentleman’s intervention is not about Chagossians, but I realise I could not take his intervention earlier. He asks about the meaning of the social time preference rate in relation to the deal. Discounting in appraisal of social value is based on the concept of time preference, and that the value of goods or services today is greater than in the future. This is the discount rate that has been used in the Green Book since 2003, including in every year that his party was in Government. It was the basis on which this was there.
Several hon. Members rose—
Luke Pollard
To return to the issue of Chagossians, on which I am trying to make progress, my hon. Friend the Member for Cardiff South and Penarth and FCDO officials have met with the Chagossian communities. Under the treaty, Mauritius will now be free to carry out a programme of resettlement of the outer islands, and we have agreed a new trust fund for Mauritius to use in support of Chagossians and the resumption of visits to the Chagos archipelago. Over the coming months and years, we will increase the UK Government’s support to and engagement with UK Chagossians, including through UK-funded projects designed through a new contact group, informed by the Chagossians’ own wishes, which met for the very first time last week and was attended by my hon. Friend the Member for Cardiff South and Penarth.
Tom Tugendhat (Tonbridge) (Con)
The Minister will be aware that the payment from the 1960s, referred to by the hon. Member for Boston and Skegness (Richard Tice), was also supposed to be spent on Chagossian welfare, but many Chagossian groups have raised the fact that that money did not go on Chagossian welfare. It went on many other things for the Mauritian Government, but not on Chagossians. What confidence does he have that this agreement is any more valid than the last one?
Luke Pollard
That is precisely why my FCDO colleagues are working very closely with Mauritius to ensure that the money that is included in the treaty, and the obligations that both the UK and Mauritius sign up to in the treaty, are fully delivered so that the Chagossians receive what this treaty says they should receive. That is a really important part of the treaty.
Jeremy Corbyn
Have the meetings undertaken by the Minister of State, the hon. Member for Cardiff South and Penarth (Stephen Doughty), included all the Chagossian groups, including the Chagos Refugees Group, based in Mauritius?
Luke Pollard
The Minister of State has met a full range of groups, including the group mentioned by the right hon. Gentleman.
Dr Murrison
The Minister is being extremely generous with his time. He was pressed earlier, but I would like to press him again on the social time discounting method. He should be able to give examples of big projects to which his Government have applied this method. Could he now do that and say why, for example, the right hon. Member for Ashton-under-Lyne (Angela Rayner) did not use that method when she was calculating the cost of the 10-year affordable housing programme?
Luke Pollard
I understand the argument that the right hon. Gentleman is trying to make, but I hope that he appreciates my argument that the calculation is based on the OBR’s inflation and deflation figures and on the social time preference rate. It is a figure that has been calculated and supported by the OBR, and it stands up to scrutiny. If Conservative Members are saying that they no longer wish to use the Green Book for calculating long-term investments like this, which is their inferred argument, then it is worth looking at what they are suggesting that we no longer use the Green Book to calculate—they are making an awfully large spending commitment when they suggest that.
Several hon. Members rose—
Luke Pollard
I am going to finish my remarks on Chagossians, if I may.
I hope that all Members of the House will recognise that the treaty is not just about the importance of the military base on Diego Garcia. Diego Garcia and the wider Chagos archipelago have a unique environment. I hope that protecting the world’s oceans is a point of cross-party unity in this debate, advanced across our overseas territories by the blue belt programme. The UK supports Mauritius’s ambitions to establish a marine protected area to safeguard the globally significant ecosystems in the Chagos archipelago, and the UK will provide technical support and assistance to enable that to happen. The UK and Mauritius will work with international conservation organisations to ensure implementation of science-backed strategies for conservation.
I want to conclude, but I realise that I have not been able to allow all the hon. Members to intervene who wanted to do so, so I give way to the hon. Member for Sleaford and North Hykeham (Dr Johnson).
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The Minister seems to be arguing about exactly how much it will cost. My constituents just see that he is giving away British territory and paying rent for it, which is completely unacceptable to them. He talks about how it is good for the global south, because they agree with it; good for other countries, because they agree with it; and good for Mauritius, because it is getting extra money. What about the British people that he, as a British Minister, is here to represent? What are they getting for this deal? They are losing territory and it is costing them money.
Luke Pollard
We are securing one of the most valuable military bases on the planet. We are securing our close intelligence relationship with the United States. We are securing a vital base for operations in the region. We are securing a vital base for allies. That is the key British objective. It was the objective stated by the previous Government, which I believe the hon. Lady was serving in at the time, when they started negotiations. If she would like to say that she vividly opposes it and wants to publish the letters she was writing to the then Government for starting negotiations, she is welcome to do so, but I do not believe that any Conservative Members really did that.
Let me say one final thing on cost. The average payment cost is 20% less than the cost of the festival of Brexit under the previous Government. We can cite statistics, but the key thing the previous Government said that their deal would secure was the future operation of the base. This deal secures the future operation of the base. It is a surprise that Conservative Members are not going to accept it.
I will now conclude, because I want everyone to have a chance to speak in this debate. Let me do so by explaining what the Bill will do in practice. The Bill, along with the secondary legislation that will follow, will allow the treaty to be ratified and to enter into force. The Bill preserves the current laws of the British Indian Ocean Territory, which will ensure the base’s continued effective operation without any disruption during the transition. The Bill also ensures that there are no changes to the rights of Chagossians to acquire British citizenship, and no changes to the status of Chagossians who currently hold British citizenship or British overseas territory citizenship. Protecting national security is one of the utmost priorities of this Government, and we are delivering on that with this deal and the Bill. The Bill is crucial to securing the critically important military base on Diego Garcia for the next century and beyond, and that is why I commend it to the House.
Priti Patel (Witham) (Con)
I beg to move an amendment, to leave out from “That” to the end of the question and add:
“this House declines to give a Second Reading to the Diego Garcia Military Base and British Indian Ocean Territory Bill because it implacably opposes the United Kingdom ceding sovereignty over the British Indian Ocean Territory to Mauritius, and is therefore opposed to the terms of the Treaty to which the Bill gives effect, in particular Article 11 of the Treaty which will mean the United Kingdom paying £34.7 billion to Mauritius, leading to tax rises in the United Kingdom to provide tax cuts in Mauritius; because the Treaty does not secure the base on Diego Garcia, in particular because it does not embody the “right to extend” the 99-year lease to which the then Secretary of State for Foreign, Commonwealth and Development Affairs referred in this House on 7 October 2024; because the measures in the Treaty leave the base vulnerable, and therefore represent a threat to the strategic interests of the United Kingdom; and because the Treaty does not properly protect the rights of the Chagossian people, or the future of the Marine Protected Area.”
We on the Opposition side of the House stand against Labour’s £35 billion Chagos surrender deal. Everything about this surrender deal is wrong, from the way it was negotiated behind closed doors within weeks of Labour coming to power, to the betrayal—[Interruption.] I will happily give way.
Graeme Downie
The right hon. Lady says “behind closed doors”. Will she please publish the previous Government’s negotiating position, including the cost of the deal they were looking to do?
Priti Patel
Let me be clear: I was not a member of the previous Government, but the hon. Member knows perfectly well that no one on the Conservative Benches has any authority to publish classified papers from previous Governments. [Interruption.] He might laugh about that, but those on the Labour Benches might want to apologise to Lord Cameron of Chipping Norton, who actually stopped the deal. He has been grossly misrepresented this afternoon in this debate.
Priti Patel
I will return to that point in a minute.
On top of what else is wrong with this surrender deal, it is a fundamental betrayal of the British Chagossian community, whose rights have been ignored and neglected. I pay tribute to them. They have joined us today in the Gallery. If I remember rightly, this is the fifth or sixth time they have joined us to show how strongly they feel about the deal.
The deal undermines the defence and security interests of this country, and it brings a risk of the destruction of the unique marine environment and a failure to protect the future of the marine protected area. From refusing to grant this House a meaningful debate and vote on the treaty when it came, to the scenes in the Mauritius National Assembly—I hope Labour MPs watched the debates in the Assembly, where the Prime Minister was gloating about how easy it was to secure concession after concession from the Labour Government—and the deceit, misinformation and gaslighting of the British people through to the £35 billion cost to hard-working British taxpayers, which will be used to fund tax cuts in Mauritius.
Richard Tice
I am most grateful to the shadow Foreign Secretary for giving way. The Minister described the deal as an investment. Does the right hon. Lady agree that it would be helpful to educate him that a freehold is an investment and a lease is a liability?
Priti Patel
Exactly right. On top of that, there is the whole issue of the liabilities, costs and everything else that goes with it. The hon. Gentleman makes a fundamental, important point.
Sarah Bool (South Northamptonshire) (Con)
We talk about the cost. The TaxPayers’ Alliance has concerns about the amounts we are calculating, because they will be dependent on inflation. The calculations do not take into account market values, so the £35 billion stated by the Government Actuary’s Department will actually be more like £47 billion.
Priti Patel
Absolutely right. Of course, this Government do not like speaking about inflation for all the macro-economic reasons we know about. Inflation under this Government continues to rise, which speaks volumes about their handling of the economy.
This deal is so bad for Britain, it has left our country humiliated and weaker on the world stage. Our friends and enemies alike are laughing at the UK and Labour’s epic diplomatic failure to stand up for our national interests.
Alex Ballinger
The right hon. Lady says that this is an international problem for the UK, but does she not agree that the Americans, the Canadians, the New Zealanders, the Australians, the Indians and even the Pope support the deal? It is really important that our Five Eyes security partners are behind us.
Priti Patel
Having led Five Eyes for our country—I am very proud to have done so—it is a matter of great concern that the deal has been backed by Iran, China and Russia. I say to the hon. Gentleman that that is exactly why this is a bad deal for our country. [Interruption.] It is correct, actually, and I can point him to the references where those countries have spoken in favour of the deal.
Peter Swallow (Bracknell) (Lab)
I thank the right hon. Lady for giving way. I am going to give her another opportunity to confirm that she agrees with our Five Eyes allies that this is a good deal. Those are the people who back this deal.
Priti Patel
I met our Five Eyes partners at the weekend and I can tell the hon. Gentleman that they are not paying for this deal and they are not gloating about it. They see it very much as a failure of this Government. He can go and justify that to his constituents.
I congratulate the Minister on his new post and his promotion, and I welcome him to this wider discussion. He has tried his best to sell the surrender deal to the House, but the choices made by his Prime Minister, the former Foreign Secretary who is no longer in post, the Attorney General and Labour Ministers will leave Britain weaker and poorer, humiliated into giving away the sovereignty of our British territory and paying a fortune, £35 billion, to lease back a base—the point has been made a number of times—that we already own. While Labour has spent months trying to hide the details of its Chagos surrender deal and the scale of the financial cover up, it has been the Conservatives holding Labour to account constantly, exposing its shameful decision.
Mr Calvin Bailey
I come back to the right hon. Lady’s point about security. I must have misread our colleagues in the US Department of Defence when they told Defence Committee members, some of whom are sat behind her and heard the same words, that they did not understand her consternation about the deal—but let us assume that she has not put that in an incorrect way. If there was not a problem, will she please explain why her party started the negotiations?
Priti Patel
For the benefit of the House and everyone, to provide absolute clarity again, it was the Conservative Foreign Secretary who ended all discussions on this matter. I say it again: in all respect to Lord Cameron—[Interruption.]
Several hon. Members rose—
Priti Patel
No, sit down. In all respect to Lord Cameron, I think the Labour party should apologise for the gross misrepresentation that has taken place. Speaking of Foreign Secretaries, it is a real shame that the new Foreign Secretary is not here today to speak on the Bill. She could have come in, reviewed the details and got out the slide rule, which would be quite a good tool in this case. [Interruption.] I have just heard that the treaty has been signed, without it even coming to this House for debate and a vote. The Foreign Secretary could have come to the House to review the deal—she could even have scrapped it and saved the British taxpayer billions of pounds. However, like her predecessor, she has left it to junior Ministers to defend the deal.
Several hon. Members rose—
Priti Patel
I will give way once again to the hon. Member for Halesowen (Alex Ballinger).
Alex Ballinger
Could the right hon. Lady outline what was in the deal that the last Conservative Foreign Secretary was negotiating? The points of sovereignty and everything else were conceded by her party.
Priti Patel
I will now give way to the hon. Member for Kilmarnock and Loudoun (Lillian Jones).
Lillian Jones (Kilmarnock and Loudoun) (Lab)
Could the right hon. Lady tell me why the US and the Five Eyes have backed this deal?
Priti Patel
They have not gone on the record to say that they have. I have already made it quite clear why it is not in our interest.
It tells us something about Labour’s priorities that within days of coming into office, the Prime Minister met the then Prime Minister of Mauritius to commit to the surrender deal. Encouraged by the Prime Minister’s obsession with left-wing activism and distorted views of international law, and advised by one of the Prime Minister’s best friends and supporters—one could even say his cheerleader—Mauritius knew it was on to a winner negotiating with this naive, foolish and Britain-hating Labour Government. True to form, instead of standing up for Britain’s interests, Labour rushed to accept the advisory opinion of a foreign court that few had heard of, and swiftly agreed to Britain’s surrender of sovereignty.
Dr Caroline Johnson
Is my right hon. Friend aware of any of our allies who think that the insecure and expensive leasehold deal that we have now is better than the freehold sovereignty and security that we had before?
Priti Patel
My hon. Friend makes a good point. I have not heard our Five Eyes allies speak about it being a good way of effectively securing any national interest whatsoever—the concept of leasehold is completely wrong.
Dr Murrison
The Government are clearly not going to take any lessons from us, but I wonder whether they would listen to one of their own. Lord West of Spithead was a Security Minister under the previous Labour Administration and then First Sea Lord and Chief of the Naval Staff, so he knows a thing or two. He has said very clearly that in his expert opinion, this deal is “irresponsible” and that it will damage our strategic interests. Who are we to believe: the Labour party or my old boss, Lord West?
Priti Patel
My right hon. Friend is absolutely right.
There is something fundamental here about the negotiations—I think the Minister alluded to this earlier on. The Government were effectively just listening to leftie lawyers and advisory judgments and acting because they were frightened that their left-wing lawyer friends would pursue even more lawfare against us. The Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty) told the Foreign Affairs Committee:
“Our view is that, without this deal, it was inevitable that Mauritius would pursue and secure a legally binding judgment against the UK. Indeed, legally binding provisional measures could also have been secured within weeks”.
The Government have never—not once—detailed what the legal threat is beyond hiding behind spurious aspects of international law.
I have to say that it is a defeatist attitude that Labour has taken. Britain is Europe’s leading defence power, a pillar of NATO in Europe and a P5 member of the UN Security Council with a right of veto. We are not bound by advisory judgments pursued by Mauritius at the ICJ—which, by the way, included a judge who is a member of the Chinese Communist party. By being vocal in conceding defeat and unwilling to defend Britain from a barrage of lawfare, Labour has let Britain’s standing on the world stage plummet, and its decisions will have serious consequences for us.
Let us talk about the money. We all know that this Labour Government are big spenders when it comes to splashing about taxpayers’ money, and the costs of Labour’s surrender treaty are astronomical at £34.7 billion—a figure which, by the way, we had to drag out of the Government Actuary’s Department because Labour Ministers repeatedly refused to disclose the cash payments when asked. In fact, because the payments are linked to inflation, as my hon. Friend the Member for South Northamptonshire (Sarah Bool) has pointed out, guess what? The cash cost could be even higher. That means higher taxes for our constituents, which is nothing for those on the Labour Benches to crow about.
Peter Swallow
The right hon. Lady comes to this Chamber claiming that this deal has astronomical costs and all that, but what she will not put on the record is the cost of the deal that the Conservatives were negotiating. She can say all she wants about that being a matter for the public record, but she needs to be clear with the British public.
Priti Patel
I will be absolutely crystal clear for the benefit of this House and for Hansard, too: there was no deal whatsoever. The Government can put out as much fake news as they wish and carry on pretending and crowing that there was a deal, but there was no deal. It was the last Conservative Foreign Secretary who stopped any negotiations and discussions, and they were stopped—Lord Cameron himself has said that. On that basis alone, I think Labour Members should all apologise to Lord Cameron, and perhaps even correct the record.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I am most grateful to my right hon. Friend for giving way. Does it not speak volumes about the real nature of this Government that despite facing a fiscal crisis and potentially a crisis in their finances—they want more money spent on health and benefits, because that is what they do—their priority is listening to leftie lawyers pontificating about decolonisation and committing billions of pounds of long-term liabilities to give away and lease back something that we already own? Does that not say something about the extraordinarily myopic preoccupations of this Government? Of course, we told the Foreign Office to get lost.
Priti Patel
My hon. Friend is absolutely right. It speaks volumes about the priorities that this Labour Government—socialist to the core in how they like to spend public money—are focused on. Come November, when the Chancellor has her Budget, there will be no point crowing about the past and blaming other people, other countries and international forces and factors. This is a fiscal mess made by this Labour Government with this utterly scandalous, appalling and reckless financial giveaway.
Dr Luke Evans
The Minister challenged the Opposition and the shadow Chancellor about our position on net present value, but the reason is that the use of NPV is unprecedented. It is used for commercial deals that the Government make and is standardised for that alone, not for international agreements on sovereignty. Does my right hon. Friend agree that we will not change on net present value, which has its place in commercial deals but not in giving away sovereignty?
Priti Patel
My hon. Friend is absolutely right; it is absolutely shameful. I come back to the fundamental principle that this House will have to consider: at a time when hard-pressed British taxpayers are struggling, with significant tax rises and the share of the tax burden on the public going up, the Government will have to have a good, hard look at themselves and justify this appalling cost to their own constituents.
Joy Morrissey (Beaconsfield) (Con)
My right hon. Friend made an excellent point earlier about the underlying socialism in this agreement. The initial agreement—[Laughter.] No, let me just clarify: the initial agreement from May very clearly says it is about apologising for the colonisation of Mauritius and that it is about the regrettable legacy. Everything is laid out: it is about apologising for our British history and heritage. It is not about being proud of protecting our sovereignty, protecting the realm and protecting our security. We should not be saying that we will apologise and pay out because we feel bad about everything that we have done. That is the difference between the Conservatives and the Labour party, and that is why we are taking such objection to this Bill.
Priti Patel
I thank my hon. Friend for that intervention. I say gently to some Labour Members, who are laughing and sneering at a fellow Member of this House when she is making a very valid point, that they are simply being disrespectful. It says a great deal. The hon. Member for Dunfermline and Dollar (Graeme Downie) can laugh as much as he wants. The British public see Labour as a party that does not stand up for Britain and British values, and that is not something to be laughed or sneered at.
Sir Iain Duncan Smith
I am grateful to my right hon. Friend. Just to settle this whole argument about net present value, the reason it simply cannot be used for a long-term treaty obligation is that it is necessary to make a really heavy estimation of what will happen socially and economically in that area. It is just about possible to use some of that in the UK, where the Government control certain aspects, which they will not control after this treaty is signed. That is why it has been recommended that it not be used for long-term effects when not within the UK. That is why the actuarial department advised going for the total amount, not this net present value.
Paul Holmes
My right hon. Friend is concerned about the cost of the deal, but does she also share my concern about the way in which the deal was negotiated? The Prime Minister of Mauritius has said that only the Prime Ministers of our respective countries were in the room; officials were asked to leave the room, so there are no records of what was discussed. Is that how a responsible, democratic Government should show transparency when negotiating on the international stage?
Priti Patel
My hon. Friend is absolutely right; at the heart of this is transparency about negotiations, including fiscal negotiations.
Graeme Downie
The right hon. Lady talks about transparency, but once again we have not heard a word from her about what her Government’s position would have been, so there has been no transparency at all. They went through 11 rounds of negotiations. If she did not believe a deal was possible, surely she would have stopped after two or three. She knew that a deal was vital to UK security interests, but her Government could not conclude it.
Priti Patel
The hon. Member, who was laughing and sneering at fellow colleagues earlier—that is simply not acceptable—should have listened to what I said. I will restate it for the House: there was no deal done whatsoever.
Priti Patel
I will not. As we have already heard from Conservative Members, we have rarely seen the methodology that the Government are now hiding behind used for any spending announcements. When the Minister winds up, I wonder if he will commit to presenting all future spending decisions using this methodology—or perhaps he could explain why the Government have singled out this large and embarrassing expenditure to be formulated in this way. That is down to the fact that they are covering up a colossal cost.
Sir Roger Gale
The point has been made over and over in this discussion that we are giving away something that we did not have to give away, and are renting it back—and the British taxpayer is paying for it. Last week, I asked the Leader of the House how much this was going to cost. She said,
“alongside legislation we publish all the necessary documents, including the costings, which we have been transparent about.”—[Official Report, 4 September 2025; Vol. 772, c. 453.]
I regard the Minister as a friend, but to say the least, his figures have been opaque. Let me ask one simple question that my right hon. Friend might know the answer to: how much is the United States contributing to this deal?
Priti Patel
I thank my right hon. Friend for his contribution, and for pursuing this line of question in the Chamber with other Ministers. He is absolutely correct. We know that the United States of America is not contributing to the cost of the deal. The cost is solely on the British taxpayer. [Interruption.] Operational costs of the base are different; that is not in this treaty or this Bill.
The Bill represents a series of measures, not the treaty in its entirety. The Government blocked this House from voting on the treaty during the 21-day process provided for in the Constitutional Reform and Government Act 2010. Last week, when asked at oral questions why we were not getting a vote on the costs, the then Foreign Secretary—now Deputy Prime Minister—proclaimed that there would be a vote, but the Government have not seen fit to put forward a motion. As the explanatory notes to the Bill confirm, the Bill will not authorise expenditure. That is not acceptable. We will table amendments to the Bill to hold the Deputy Prime Minister to his word and ensure that this House has a rightful say over the payments to Mauritius.
Let us be clear: unless there is a direct vote on the costs, Labour will have cheated Parliament and Britain out of having a say on the financial implications of the £35 billion that British taxpayers are being forced to pay a foreign Government. That expenditure means higher taxes for British taxpayers and less spending for British people across all constituencies around the country. Shamefully, this is all to fund tax cuts, debt reduction and new investment in not our country, but Mauritius. I will gladly give way to any Minister or Government Back Bencher who wants to explain why it is acceptable to deny Parliament a vote on this £35 billion of expenditure, and why the money should be given to a foreign Government, not invested in this country. If they need to check that with Rachel from accounts or Lord Hermer, I am sure they can do so before the end of the debate. Labour giving away British taxpayers’ money to a foreign Government to rent land that we already own is reckless and irresponsible.
Dr Caroline Johnson
My right hon. Friend is making a great speech. She says that this is a reckless giving away of British money. Unlike many of the other things we have had to watch Labour do, such as take the winter fuel allowance away from old people and heavily tax charities, hospices and others, this cannot be undone. Once the money is given away to a foreign country, there is nothing that any future Government can do to claim it back easily.
Priti Patel
My hon. Friend is right. At the end of the day, the real judge of this will be the British people.
Priti Patel
No, I am answering my hon. Friend. The real judge will be the British people. How will they view a Labour Government giving away £35 billion to a foreign Government? That money could be spent in this country. It is simply not acceptable at all.
Priti Patel
I am going to make progress, and I have taken plenty of interventions.
The Minister touched on the base at Diego Garcia, which is one of the most important military assets in the world. It gives us and our US allies significant global reach, but the treaty undermines that position, and the Bill contains no measures to mitigate its effects.
Priti Patel
I will not; I have given way plenty of times to the hon. Gentleman.
The surrender of sovereignty means that Britian will be a rule taker, taking the laws, rules and commands of Mauritius, and that restricts and impedes base operations. For example, Mauritius has signed up to the Pelindaba treaty, banning the stationing and storage of nuclear weapons; no Minister has been able to provide a definitive answer when questioned about how that may impact our security and defence, once the UK is no longer sovereign in, or able to exercise sovereign rights over, the Chagos islands and Diego Garcia.
Under the terms of the treaty, we are bound to notify Mauritius of various activities relating to our use of the base, including operations from the base against that country, and movements of our allies’ vessels. Despite heavy questioning, at no point have Ministers explained in detail how the notifications will work, and who will have access to the information.
Jim Allister (North Antrim) (TUV)
The shadow Foreign Secretary is coming to the nub of the matter. This is about the future security of the world, including the United Kingdom. We are arriving at a situation where the sovereign power is a signatory to an empty nuclear treaty that prohibits the stationing of nuclear weapons anywhere within the ambit of the countries that are signatory to that treaty. How could we even use this base for our nuclear submarines?
Priti Patel
The hon. and learned Member is absolutely right. That is why it was important to have a debate on the Floor of the House when the treaty came together, but we did not have one. The treaty brings into question everything about security, including our ability to be as strong and secure as we need to be.
It will come as no surprise to Members to hear that now that our sovereignty over the base is being surrendered, our enemies are queuing up to—guess what?—make friends with Mauritius. Just days before the surrender treaty was signed, Russia agreed a new partnership agreement with Mauritius that includes marine research. That so-called “marine research” conducted by Russia could take place just a handful of miles away from our base. Mauritius has also been courted extensively by Iran and China for further partnerships in a range of other areas. Despite the warnings, this inept Labour Government have failed to act to safeguard our interests.
Sir Bernard Jenkin
On the previous question of how much operational independence we will really have, can my right hon. Friend comment on point 4 of annex 1 of the agreement, entitled “Mauritian Security Review”, which requires us to consult Mauritius before any
“construction or emplacement of any maritime installation”
or
“any proposal for development in the land territory of the Chagos archipelago”?
It also states that Mauritius shall conduct a security review, and that our permission to carry out works is dependent on the outcome of the Mauritius security review. We do not have operational independence under this treaty. It then goes through the dispute process, and there is no decisive way of deciding anything unless there is agreement between the two Prime Ministers. It is a completely inadequate agreement.
Priti Patel
My hon. Friend has summed it up: the whole process is completely inadequate, with no transparency and no dispute resolution mechanisms. This is just too messy, given that we are talking about the defence and security of the country. Again, this is exactly why we should have been able to debate the treaty on the Floor of the House and give it the scrutiny that is required. Let us hope that the Prime Minister and his lefty lawyers are not involved in the dispute resolution mechanisms, because Britain will come out worst. As we know, when Labour negotiates, Britain loses.
At the press conference announcing the signing of the treaty, it was interesting to hear the Prime Minister almost gaslighting critics of the treaty by comparing them—that is, us—to China, Russia and Iran as he arrogantly declared his views and position. On 4 and 11 June in the House, he said that the treaty “has been opposed by our adversaries, Russia, China and Iran”. We know that 6,000 miles away, at the celebration party press conference in Mauritius, China was singled out by the Mauritian Government for praise. According to the press release, Deputy Prime Minister Paul Bérenger noted that China’s
“unwavering support played a critical role in the international recognition of Mauritian sovereignty.”
A few days later, the Chinese ambassador issued Mauritius with “massive congratulations” on securing the surrender of the Chagos islands. This summer, the Mauritian Government published a press release saying that the President expressed “gratitude” for China’s “unwavering support” for Mauritius’s sovereignty claim over the Chagos archipelago.
Iran has also been supportive of the Mauritian claim for the Chagos islands, with its ambassador saying earlier this year:
“The Islamic Republic of Iran has always supported Mauritius’s position regarding the Chagos issue. So, Chagos belongs to the Mauritian people. We support its return and have made many efforts in the past toward that goal.”
As for Russia, when meeting Putin, the former Mauritian President Vyapoory stated:
“We appreciate the support of Russia in our claim for our sovereignty on Chagos.”
Ministers have been asked in parliamentary questions for the evidential basis of the Prime Minister’s claims about the apparent opposition of those three countries who threaten our interests, but they have not come forward with it. When the Minister responds, will he finally explain the grounds behind the Prime Minister’s malicious, almost spurious, remarks, or apologise for those claims? All the evidence shows that, far from opposing the surrender treaty, our enemies actually back it, which means that Britain is weaker.
Priti Patel
I will not. I know that the hon. Gentleman will speak later.
I turn to the British Chagossians. As well as undermining our security and defence interests and ripping off British taxpayers, Labour has betrayed the British Chagossians. Members on both sides of the House have recognised and acknowledged that the Chagossian community has faced injustice and hardship. Their removal from the Chagos islands is a source of great and profound regret. I pay tribute to the Chagossian community in Britain for their campaigning, and to Henry Smith, our former colleague as Member of Parliament for Crawley, who kept pursuing and raising the issue, and who fought in the House for their rights. As a result, we gave the community new rights in the Nationality and Borders Act 2022, which Labour voted against. I hope that the Minister can give assurances that those rights will not be undermined by the citizenship measures in clause 4 of the Bill. Because of that past, it is so important that any decisions made about the future of the Chagos islands are made with the community in mind, and that their needs are fully respected.
Ten years ago, when the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty), was the Opposition’s spokesman, he said:
“The people of Chagos must be at the heart of decisions about their future…the UK Government have a fundamental moral responsibility towards the islanders that will not go away.”—[Official Report, 28 October 2015; Vol. 601, c. 192WH.]
But this treaty fails them. I have met the community many times and heard their concerns and frustrations; I think everyone in the House will acknowledge their frustrations. They feel that they have been ignored throughout the process, and that the treaty has no guarantees for them. There is a £40 million Chagossian trust fund that UK taxpayers will capitalise, but the UK and the British Chagossians will have no control or say over how it will be used or controlled by the Government of Mauritius. I highlight that point because the Chagossians feel strongly—they fundamentally know—that they cannot trust the Government of Mauritius. The Bill and the treaty make no provision for the British Chagossians to benefit from the trust fund, or be involved in its governance; nor are they guaranteed any right to visit the Chagos islands. Those decisions will be controlled by Mauritius once sovereignty is surrendered.
Hon. Members across the House who have spoken up for British Chagossians know of their fears. It is right that I amplify those fears, or at least raise them in the House, because their voices have not been heard. Now is the time for them to be counted, for their voices to be heard, and, importantly, for their rights to be defended.
Another damning indictment of the Bill and the treaty is the way in which they fail to safeguard the 640,000 sq km marine protected area. Its unique biodiversity enables important marine research to be conducted. In just the last few weeks, a study that included researchers from Exeter and Heriot-Watt universities and the Zoological Society of London was published. It noted:
“Our results provide clear evidence for the value of the Chagos Archipelago VLMPA for protecting a diverse range of large and mobile marine species.”
Yet all we have heard thus far from the Government is warm words about intentions to continue with an MPA. No details have been published.
Dr Luke Evans
On the conservation point, is it not that the case has already been tested in UNCLOS between 2010 and 2015, when it was said that we could not go ahead with a marine protection area for this British territory because we had not consulted properly with Mauritius? At that point, it was also determined that UNCLOS could not rule on sovereignty as that was not its basis. So we found out not only about the sovereignty side, but that we cannot protect the islands on the environmental part. What guarantees does my right hon. Friend see in the treaty that we will have ecological protections in the area, given those findings?
Priti Patel
My hon. Friend is absolutely correct about UNCLOS and in highlighting the insecurities and serious challenges. It may be forthcoming, but at this stage we do not know what levels of protection will be provided or will continue. We do not know what level of resource Mauritius will put into the MPA or what the UK will contribute.
Dr Murrison
My right hon. Friend is making a powerful case. The answer is none, because Mauritius has no navy and practically no coastguard. With which means will Mauritius defend a territory that is hundreds of kilometres away? It cannot possibly do so.
Priti Patel
My right hon. Friend has summed it up, and it is not just that Mauritius is unable to do so; it clearly will not be interested in this whole area.
It is important for the House to reflect on that point. After decades of investment in and support for the MPA, there is now a major issue of jeopardy. We do not know at this stage what the governance arrangements will be. In fact, in response to questions about that from my hon. Friend the Member for Bognor Regis and Littlehampton (Alison Griffiths) at the Environmental Audit Committee in April, the Minister, Baroness Chapman, said:
“It will belong to the Government of Mauritius, and they will make decisions about how they protect the seas around the Chagos archipelago… You want more detail than we have… We and the Government of Mauritius want to see the marine protected area continue, but I do not know what the precise nature of it will be.”
What we do know is that the Fisheries Minister of Mauritius, Dr Boolell, is eyeing up the marine protected area to exploit it. He boasted to his National Assembly on 7 February that he wants to issue fishing and trawler licences. He declared that
“what stops me tomorrow to say that I am going to give fishing licence for any fishing trawler company or any fishing vessel to go to any part of Chagos”.
This issue has been raised extensively in the Foreign Affairs Committee, with no Minister being able to give any assurances. If the Bill passes and the treaty is implemented, the unique marine environment will be put at risk.
I will briefly touch on two areas. Another part of the Chagos surrender Bill that should concern the House is its Henry VIII clause. Clause 5 grants the Government a free hand, with little or no parliamentary scrutiny, decisions or authority, to
“make any provision that appears to his Majesty to be appropriate as a result of the Treaty”.
That could mean the Government making further concessions to the Government of Mauritius. With the treaty making provision for a joint commission with the UK and Mauritius, that could take place without anyone in this House having any sight or knowledge of it. We need a clear commitment from the Minister in his winding-up speech what those measures will be or will he rule out on the Floor of the House that any further concessions will be made to the Government of Mauritius?
In conclusion, this Bill, its six shameful clauses and the treaty it partly implements are a damning indictment of the failures of this Labour Government. It surrenders sovereignty of a land we own to a foreign Government, increasingly allied and growing closer to countries that are not our allies and which pose the biggest threats to our national security and defence. It binds the hands of British taxpayers into paying £35 billion—a surrender tax. It puts the interests and demands of a foreign country and left-wing lawyers above our national interests. It leaves our country poorer, weaker and less able to defend our interests from foreign threats and it undermines our standing in the world.
Labour’s Chagos surrender deal is an epic failure of diplomacy and an expensive humiliation for Britain. When Labour negotiates, Britain loses. His Majesty’s loyal Opposition will continue to stand up for Britain’s national interests and our defence and security. We will fight for our sovereignty, we will defend British taxpayers by opposing Labour’s surrender tax and, we will make the case for the British Chagossians to have their rights safeguarded and the marine protected area preserved. We will oppose this Bill and fight this treaty every step of the way.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I rise to speak on the Bill and proposed agreement, with particular focus on its defence implications. Given substantial other ongoing work and the fact that other Committees have looked into it, this is not an issue that our Defence Committee has investigated thus far. Let us not be under any illusion, however: this is a matter of strategic importance, financial prudence and moral responsibility.
The British Indian Ocean Territory and in particular the Diego Garcia military base have long served as a cornerstone of our defence and security capabilities, not just for the UK but for our allies in the US and across the Five Eyes community. That is why having their stated support for this deal, in addition to that of India and others, is so vital. The base’s role in disrupting threats to the UK, supporting counter-terror operations against ISIS and protecting us against hostile states must continue. Including the management of the electromagnetic spectrum satellite used for communications and the prevention of other powers operating on the outer islands without permission is vital for countering hostile interference. It is not just a diplomatic formality; it is a strategic firewall against encroachment by hostile states.
Maintaining US and UK autonomy on the base cannot be overstated. I note the Government position is that Mauritius will be expeditiously informed of activities. However, I look for reassurance that we do not need to provide Mauritius with advance warning about our operations. I would therefore welcome clarification on that point from the Minister to guarantee that all current and future operations can continue unimpeded.
Dr Evans
Given the importance of the Chagos islands to our defence, has the hon. Gentleman’s Committee thought about even doing a review into the Chagos islands and what this would look like? That way, such questions could be addressed directly in a decent period of time—we only have four or five hours tonight—and he could spend several weeks looking into the matter. Is that something he and his Committee would consider?
Mr Dhesi
As I mentioned in my introductory remarks, given that various other Committees have been looking into this and that it has been extensively debated on the Floor of the House, and considering the other work that the Committee is undertaking, including an inquiry launched this week into the Afghan data breach, that is why we have not looked into this matter. However, I will give way to the Minister, who I hope will give me some sort of reassurance.
Luke Pollard
To reassure my hon. Friend, as I did the hon. Member for North Dorset (Simon Hoare) earlier, we are not required to give pre-notification of any military activities to Mauritius. That is important, because some people are erroneously suggesting that we are. That is not correct; we do not have to give pre-notification.
Richard Tice
We have heard today that this deal—this supposed investment that is actually a liability—is essential to the defence of our realm. Yet the Defence Committee has not studied that investment or liability. I think the British people have a right to know why not.
Mr Dhesi
I have already stated, on two occasions, the various reasons why our Committee has not looked into this particular aspect. The matter has been given extensive airing in various other contexts, and we have been given assurances that there will be no fettering of our ability to operate from the base in the defence and security of the UK and its allies. I also point out to the hon. Member that during the Defence Committee’s recent visit to our most trusted and closest ally, the US, during various discussions and on numerous occasions when we raised the matter with very senior individuals in the US, whether on Capitol hill, in the State Department or at the Pentagon, they were supportive of the deal. I am sure that other Committee Members, when they discuss this, can attest to that.
Sir Roger Gale
We have been given an assurance from the Front Bench that no advance notice will need to be given about operational arrangements from the base. However, my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) earlier indicated that there had to be Mauritian Government approval for the construction of facilities. How can we have the operational facilities without the construction of the facilities that back them up?
Mr Dhesi
The right hon. Member makes a strong point. Indeed, I hope that in the Minister’s winding-up speech, just as we have had clarification that we do not need to give advance warning about the operations of the US and our forces, he can give clarification about construction as well.
On the matter of cost, which is a concern rightly raised by hon. Members across the House, it is important to be transparent and precise. From my previous briefings with Ministers—I am grateful to both the Defence Minister and the Foreign Office Minister on the Front Bench for their time—I understand that that will be an average of £101 million annually over 99 years, with the United States covering all defence operations.
Sir Bernard Jenkin
I should clarify that what I quoted from article 4 of the treaty does not apply directly to Diego Garcia; it only applies to an area beyond Diego Garcia and for the development of land territory that is on the archipelago but beyond Diego Garcia. I should have made that clear. I inadvertently misled the House, and I apologise for doing so.
Mr Dhesi
I thank the hon. Gentleman for that clarification and for setting the record straight. I did not want to say anything on the Floor of the House that could inadvertently have misled the House, but my understanding was that all our operations regarding the Diego Garcia military base would be unfettered, so I am glad that he has given that clarification. No doubt I would have had to do more bedtime reading to catch up on exactly what was in the treaty.
While this arrangement will ensure that our strategic interests are protected, we must ensure that the cost does not spiral and that proper oversight is given to all the financial implications. Security and cost are not the only factors that we must weigh in evaluating this deal, however. We must also address the rights of the Chagossian people, including those who are in the Gallery today. I have raised these issues on the Floor of the House with the then Foreign Secretary, and I again urge the Government to ensure that all parts of this deal are carried out in line with international law and with full respect for the dignity and rights of the Chagossian community. I would welcome any comments from the Minister on ensuring that Chagossian voices will be heard.
One of the issues raised by the Chagossians, which the shadow Foreign Secretary also mentioned, is the protection of the Chagos archipelago, which is home to one of the most ecologically rich marine environments on the planet. I welcome the creation of a protection zone. This represents a significant step forward in our shared commitment to environmental conservation and biodiversity protection. It also provides a framework for scientific co-operation, marine research and community engagement, particularly with the Chagossian diaspora, whose cultural and historical ties to the islands must be respected.
I welcome the guarantees and stability that this agreement brings, but it is imperative that long-term stability is achieved and secured into the future. In an increasingly complex global landscape, we must act as a responsible global leader, ensuring that our national security and strategic interests are never compromised.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Calum Miller (Bicester and Woodstock) (LD)
I thank the Minister for his statement and congratulate him on his new appointment. On 3 November 2022, the right hon. Member for Braintree (Sir James Cleverly), as Conservative Foreign Secretary, stated that
“the UK and Mauritius have decided to begin negotiations on the exercise of sovereignty over the British Indian Ocean Territory (BIOT)/Chagos archipelago.”—[Official Report, 3 November 2022; Vol. 721, c. 27WS.]
On 7 November 2024, the right hon. Member for Tottenham (Mr Lammy), as Labour Foreign Secretary, made a statement to confirm that the UK and Mauritius had concluded those negotiations. On that same day, I met the group of UK-based Chagossians who came to Parliament to protest against the deal, which had been reached without their involvement. Maxwell Evenor said to me in desperation that his people had no state and no power. He said:
“All we have is our voice but that has been silenced for so long.”
The views of the many Chagossians living here in the UK have not changed since.
The right hon. Member for Witham (Priti Patel) peppered her speech with breathless hyperbole, but let me speak plainly. There has been consistency between the approaches of the last Government and this Government—[Interruption.] Conservative Members do not want to accept that fact, but it is true. Both Governments accepted that legal challenges, not only in the International Court of Justice, were a threat to the UK’s vital security interests. Both Governments pursued negotiations over the sovereignty of the Chagos archipelago, with the goal of securing legally our use of Diego Garcia, and both Governments failed to protect the interests of Chagossians in their negotiations with Mauritius. The reasoned amendment tabled in my name and those of Liberal Democrat Members today seeks to address those facts. From the very start, the process of securing the treaty to be given effect by this Bill has been characterised by this glaring omission.
There has been an abject failure by successive Governments properly to consult the Chagossian people or to ensure that their rights were protected in the final settlement. We recognise and support the importance of abiding by international law and believe that it is in the UK’s interest to negotiate with Mauritius, given the risk—which the Conservatives and Reform now appear recklessly to be ignoring—that a judgment against the UK in any court would present a threat to our security interests in Diego Garcia, but the treaty that has been agreed tramples over the Chagossians. Not only does it fail to provide adequate protection of their rights; it also fails entirely to establish a right to return or a programme of resettlement of the islands for the Chagossians. For much of their history, the Chagossians have been denied consultation on who governs them and their right to self-determination. We now fear that this treaty, if enacted, will only reinforce that historical legacy. Mauritius—which, let us remember, lies over 1,300 miles from the archipelago—will become the new colonial master of the islanders.
I also have grave concerns about the degree to which this deal will genuinely support the UK’s security over the long term. There is a concerning lack of detail regarding the extension of the Diego Garcia military base lease beyond its initial 99-year term. Nor does the treaty appear to reckon seriously with generating guarantees or protections against encroachment by revisionist powers such as China, which could threaten and undermine UK interests in the region.
The unique maritime environment around the Chagos archipelago is one of the most ecologically valuable regions on earth. It is home to an extraordinary range of wildlife and acts as a sanctuary for many threatened species. I fear that the treaty does not afford adequate protection to this precious environment. Protecting and restoring it is not only vital for global marine conservation; it also offers unique opportunities to deepen our understanding of natural ecosystems. Resettlement of the Chagossians could have provided a model for community-led conservation on the islands. Instead, short-sighted opposition to Chagossian proposals and the controversial marine protected area designation squandered that opportunity.
Finally, there is the cost of this deal. The Government shrouded this in secrecy when they first announced it, and then appeared to reopen it to appease the new Mauritian Prime Minister. UK taxpayers are right to ask how Ministers justify the sums involved at a time when public finances are so stretched in the UK.
The treaty in this Bill fails to put in place the necessary oversight and accountability mechanisms over the very large sums involved and the annual payments to Mauritius and the Chagossian trust fund. The Government elected not to provide time for a debate and vote in this Chamber on the treaty, and I regret that Members were not given that opportunity. We are also awaiting the statement on the rights of Chagossians, which the noble Lord Collins promised would be discussed in both Houses before ratification. I hope the Minister will clarify when this will be scheduled. In the meantime, for all the reasons that I have set out and are set out in the reasoned amendment in my name and in the names of the Liberal Democrat colleagues who have signed it, I believe that this Bill to give effect to the treaty should not receive Second Reading.
Peter Lamb (Crawley) (Lab)
I congratulate the Minister on his appointment, and thank Ministers for the time they have given me to raise with them matters in relation to this Bill and for the responses they have provided to my questions.
I can see no logical reason why the Government would go through the painful process of bringing this Bill to the Floor of the House today if they were not 100% convinced that it was in the UK’s national security interests. However, I am afraid that I must vote against the Government today because I do not believe that their concerns, no matter how important they might be, give us the right to override the Chagossian people’s right to self-determination. We cannot vote to give away these islands, because they are not our islands to give away in the first place.
I know that many Members have taken an interest in the plight of the Chagossian people over the years, and that in the last year, hopefully, many more have learned more about their history and their circumstances, so I will recount the key points briefly. The first recorded contact with the islands was from those in the Maldives, but its modern history begins with France, which bound the islands together in a colonial administration with Mauritius. This is the only basis on which the modern state of Mauritius makes any claim on the islands.
In the late 18th century, the UK claimed the colonies from the French and planted coconut plantations on the islands. We used slave labour to do that, and it was among those slaves that the unique island culture began to develop. In 1965, the UK divided that colonial entity, granting the modern state of Mauritius independence and at the same time, in return for financial compensation, agreeing to give up any future claim on the islands. However, we had already come to the determination at that point that this would be a convenient location for a military base, jointly run with the United States. I believe that in that initial deal we got a discount on Polaris for providing the site.
In order to facilitate the base, the decision was taken to forcibly remove the islanders from the archipelago—something that began under a Labour Government but concluded under a Conservative Government. Official documentation from the time stated that the base was too important to the UK for “Tarzans” and “Man Fridays” to get in the way, and made it clear that the islanders must be referred to only as Mauritians or Seychellois, recognising the opposition that they would face—even in the 1960s—if it was known that the displacement of an entire people was taking place in the interests of national security.
The islanders were deposited on Mauritius and the Seychelles—islands of a different culture—without a penny to their name, and for decades were abandoned by the British Government, left in poverty and facing discrimination on the basis of their ethnicity. For years, they have fought for their rights, and they have won some concessions in that time, including the right to UK citizenship, with most British Chagossians choosing to set up their home in Crawley. That move came with enormous challenges—a point to which I will circle back in due course.
I have known and worked alongside members of the British Chagossian community for almost two decades. As council leader, I promised them that as a part of Crawley’s community, it was my job to be their voice to Government, not the other way around. It is that promise that leads me to vote against this deal today.
It is true to say that there are Chagossians who enthusiastically support the deal, just as there are those who desperately oppose it—that is the same with any community on absolutely any issue—but what is not disputed is that the islands belong to the Chagossians, and that it is for that people and that people alone to decide the future of their homeland. We have not given them that chance to decide their future. Until every Chagossian has had the chance to have their say, I cannot support this deal.
Dr Evans
The hon. Member is making a powerful point. We heard an impassioned defence not to bring the Falkland Islands or other British overseas territories into this, but Gibraltar and the Falkland Islands have self-determination, voted for by their people. Is it his thesis that that will apply for the Chagossians, and therefore they would make the determination whether to be British or, indeed, go to the Mauritians on that basis?
Peter Lamb
It is incredibly unfortunate that the Chagossians have not been given that opportunity—that is my view. Had we given them that opportunity, whatever the outcome, I would have had no problem honouring that because we are talking about their land; it is not our land.
Jeremy Corbyn
The hon. Member is speaking very well on behalf of his constituents. He will acknowledge that the argument for Chagossians having a right of nationality and abode in Britain was hard fought by many of the Chagossians, and some of us who were here at the time were pleased to support them in that. Yes, there are differences of opinion among Chagossians, including the Chagos refugee association, which, broadly speaking, supports this treaty, but does he not think that it is time to bring all the communities together and recognise that they have achieved an enormous amount in gaining the right of return and the right of residence, at least on the archipelago?
Peter Lamb
There is an enormous challenge, as I am sure the right hon. Member is aware of from his many years working with the group, in the number of disparate voices. Crawley borough council had taken it on itself to work with the different community groups, helping them to come together and form a coherent voice, out of the belief that they will only ever secure what they are all seeking by having one coherent, democratic voice for the community. Unfortunately, the deal emerged during the course of that process so there has not been that opportunity, and its timing has, to an extent, driven a rift through that community.
I am not naive; I am certain that the Bill will proceed today, so let me turn to the question, “What next?” Although mention of the Chagossians is made in the wording of the deal, I remain concerned, as other Members have alluded to, that there are gaps that leave the Chagossian people at risk. While there is the option for Chagossians to be allowed by the Mauritian Government to return to the islands, there is no requirement in the deal that that happens. There is no guarantee that any Chagossian who does return to the archipelago will not face restrictions that prevent permanent habitation, even at a subsistence level of economic activity. There is no guarantee at this time that the trust fund that is being created will be in the control of the Chagossians and used exclusively to address the consequences of their forcible removal from the islands. There is no guarantee that returning Chagossians will not face a 10-year prison sentence for questioning Mauritian territorial integrity through taking on British citizenship.
I know that many remain upset that Diego Garcia remains off limits for permanent habitation, with a view that some creativity could be used to enable rehabilitation without affecting security, particularly given the prolonged period in which asylum seekers have been present on that island. I say all this because I want to urge Ministers to continue to engage on these matters with the Mauritian Government to give the Chagossians certainty over their place in this deal.
Closer to home, there are many challenges facing Chagossians who choose to exercise their right to UK citizenship. Chief among those problems, as with so many other issues, is housing. As part of our national housing strategy, we need to ensure that every UK citizen has access to good-quality housing, and that includes British Chagossians, who, by the legal complication of their citizenship, despite having lost their homes in Chagos, receive none of the support offered by relocation schemes to other groups. That creates enormous pressures on local authorities near airports and leaves many Chagossians living in dilapidated housing conditions, if they can find accommodation at all. With the second worst housing crisis in the country, the reality is that Crawley borough council cannot on its own owe the entire country’s housing duty to the Chagossian people; a national strategy is needed.
There are challenges around access to language training and support services, which often lead Chagossians to be highly reliant on other members of the community. I regret to say that for the enormous amounts of goodwill and charity on the part of that community towards other members of it, we have had instances of that trust being abused in the form of fraud. We need a mechanism for qualifications issued in Mauritius to be recognised in the UK, and for children and young people to transition into UK educational systems—something that is complicated by the differences in term times.
Lastly, there is a desperate need for facilities for the Chagossians to preserve their unique, intangible cultural heritage, which sits at the heart of an individual’s identity and which forced deportations have to a large extent erased. With so few first-generation Chagossians left, if we do not act now, this is likely to be the last generation that sees its culture on the earth. I know that Foreign Office Ministers are meeting with Chagossian groups and have been working to get funding moving again. I am hopeful that these meetings will continue and that progress can be made on these and other challenges.
I say to all Members in the House today that this House has done enormous harm to the Chagossian people, all the way from their enslavement to the present day. I believe that handing these islands to Mauritius without their consent risks making some of that harm permanent. Nevertheless, it is within the Government’s power to address many of the consequences of forcible deportation so long ago. Regardless of the outcome of today’s vote, I beg Ministers to let this be the start and not the end of the process of making things right.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
It is a privilege to follow the hon. Member for Crawley (Peter Lamb). I admire his principles and his persistence in his advocacy for his Chagossian constituents, and I know that he would recognise that his predecessor did the same.
There is no dispute that Diego Garcia is crucial to the UK’s security and that of its allies; that is not something we are arguing about. I do not think—although I will be corrected if I am wrong—that it is the Government’s position that, in terms of the day-to-day practicalities of operating the Diego Garcia base, this new arrangement whereby we no longer have sovereignty over Diego Garcia but will continue to administer it, at least for 99 years, is better than what we have now. Rather, it is a more secure arrangement because of what has been described as the legal uncertainty surrounding our sovereignty over it. I see the Minister nodding, and I am grateful for that.
Dr Evans
I am grateful to my right hon. and learned Friend for giving way and using his legal background. It is more secure legally for those 99 years but, more definitively, at that 99-year point, if the Mauritians decide not to have a base there, categorically that is their decision. Therefore, by proxy, it is actually more unsafe, just in 100 years’ time.
Sir Jeremy Wright
I understand the point that my hon. Friend makes, and it is reinforced by the point made by our hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) in reading from the agreement as to how any disputes are resolved. But I want to focus on the position now and the legal justification that the Government have already deployed for the arrangement that they seek to make. My hon. Friend is right that there will be further problems down the road, but there are problems already.
It seems to me that if the position the Government take is as I have set it out and as the Minister accepts that it is, that must be right because it would surely be difficult to argue that, were it not for that legal uncertainty, renting Diego Garcia back from someone else would be better than owning it from a security point of view. So for the Government to persuade us in this House, and indeed the country as a whole, that this is a good deal for Britain, everything turns on the question of legal uncertainty, which Ministers have often referred to as the reason why the treaty, and therefore the Bill, are necessary.
Having spent four years as Attorney General, I am quite familiar with legal uncertainty—there is a lot of it about in Government. It is, I am afraid, invariably the case that whenever a decision is made in Government, someone disagrees with it, and some of those who disagree will be prepared to go to a court and challenge the validity of that decision. Until the court—sometimes until the Supreme Court—has resolved the matter, there can fairly be said to be legal uncertainty about it. Legal uncertainty hangs around Government like the clouds, and it cannot be allowed to paralyse a Government. Nor should that sort of atmospheric legal uncertainty be the only cause of a decision as significant as that which this Government are now making to give up sovereignty over a vital military facility.
There must be something more substantive—more tangible—to the legal uncertainty to which Ministers have referred. Many of us have tried to find out what exactly that is, but with very limited success. Given that, as far as I can tell, the legal uncertainty that is being talked about constitutes the entirety of the burning platform on which the Government rely to justify the Bill and the treaty, surely this House, before we approve either, must be given a proper and clear explanation of precisely what legal jeopardy the Government are acting in response to. In pursuit of that, it is worth having a look at the explanations that Ministers have given so far.
Let us start with the former Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), who of course is now the Deputy Prime Minister. He made a statement on the British Indian Ocean Territory negotiations on 7 October last year. He told the House that the issue of contested sovereignty over Diego Garcia was becoming more acute, and that
“A binding judgment against the UK seemed inevitable”.—[Official Report, 7 October 2024; Vol. 754, c. 45.]
Many of us have been asking where that binding judgment might come from. The only court that had by then been mentioned was the International Court of Justice, which had issued an advisory opinion on sovereignty over the Chagos Islands and Diego Garcia. Indeed, on this subject it could only have been an advisory decision, because the UK accepted the compulsory jurisdiction of the ICJ by declarations dated 22 February 2017—I was Attorney General at the time. Those declarations made it clear that the UK did not, however, accept that compulsory jurisdiction in relation to
“any dispute with a Government of any other country which is or has been a Member of the Commonwealth”.
That involves and includes Mauritius, so any dispute with Mauritius before the ICJ could not result in a binding judgment against the United Kingdom. That point has been put to Ministers and, as far as I know, they have not dissented from that analysis.
If the ICJ could not make the binding judgment that the former Foreign Secretary told us was inevitable, which other court might? On that, again, I am afraid that we have not had clarity. On 13 November last year, the Minister of State at the Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty)—who I see has the misfortune of having to defend this position once again today—answered an urgent question on the Chagos Islands. He said:
“International courts were reaching judgments on the basis that Mauritius had sovereignty over the Chagos archipelago.”—[Official Report, 13 November 2024; Vol. 756, c. 793.]
The Minister did not at that point say which courts, but I have done some digging, and I think I am supported in my assumption by what the Minister of State, the hon. Member for Plymouth Sutton and Devonport (Luke Pollard), said in opening this debate. I think that he may have been referring to a determination made in January 2021 by the special chamber of the International Tribunal of the Law of the Sea when considering a dispute between Mauritius and the Maldives. Tragically, I do not have time to go into the fascinating detail of that case, but in essence it was a dispute about the delimitation of maritime territory between those two states. The Maldives argued that the special chamber could not determine the case in question because there was an ongoing dispute about the sovereignty of the Chagos Islands between Mauritius and the UK. The special chamber decided, however, that it could treat Mauritius as the coastal state in the dispute before it, because of the ICJ’s advisory opinion on the matter, which it said had legal effect.
If that ITLOS case is what the Government are relying on, I think there are a few problems: first, the UK was not a party to that case; and secondly, the ITLOS chamber was seemingly basing its decision on that of the ICJ, which, as I have already indicated, could not make a binding ruling on the matter. I am not expecting the House, much less the Government, to accept my opinion on this, but it seems to me that, at the very least, the UK would have the basis of a decent legal argument here. It does not seem to be that this ITLOS decision demonstrates that there was no further hope for UK claims of sovereignty over Diego Garcia.
After a bit more prodding, the Government’s argument moves on and introduces the issue of access to the electromagnetic spectrum. On 5 February this year, the Minister of State at the Foreign Office answered yet another urgent question on the subject.
Sir Iain Duncan Smith
Before my right hon. and learned Friend moves on to the spectrum, may I bring him back to UNCLOS? As I understand it, article 298(1)(a) and (b) give us specific exemptions from UNCLOS judgments across all those areas. That is relevant to the UK in
“disputes concerning military activities…by government vessels and aircraft…in non-commercial service, and disputes concerning law enforcement activities”
in those areas. On that, the Government’s argument on UNCLOS falls, surely.
Sir Jeremy Wright
I will give my right hon. Friend a lawyer’s favourite answer to any question: “It’s complicated.” But here is the point: the only legal analysis being offered here—the only explanation—comes from the Opposition Benches. The Government are not giving us anything. If he is wrong in what he says, we need to hear why from the Minister, but we are not and that is what troubles me.
Mr Calvin Bailey
If the right hon. and learned Gentleman is willing to give explanations, will he please explain why his party chose to start the engagement but has at no point explained the rationale for doing so?
Sir Jeremy Wright
If the hon. Gentleman is patient, I promise that I will come to that, but I wish to deal in a logical order with what Ministers have themselves said to justify their actions.
On 5 February, the Minister of State at the Foreign Office answered another urgent question. In answer to my plea to give us more clarity on exactly what legal basis the Government were acting on, he said:
“We currently have unrestricted and sole access to the electromagnetic spectrum, which is used to communicate with satellites and which is guaranteed and governed by the International Telecommunication Union, a United Nations body based in Geneva. If we lose it we can still communicate, but so can others.”—[Official Report, 5 February 2025; Vol. 761, c. 760.]
I understand the point that he was making, but he did not explain how that issue might lead to a binding court ruling against the UK, and he did not even take a second opportunity to do so when asked about it again by my hon. Friend the Member for Spelthorne (Lincoln Jopp)—those interested can find that answer in column 762.
Luckily, however, my right hon. Friend the shadow Foreign Secretary called a debate on this subject in Opposition time on 26 February, which was answered by the then Minister of State, the right hon. Member for Oxford East (Anneliese Dodds).
She repeated:
“Without a negotiated solution with Mauritius, it would pursue its legal campaign…That would lead to an inevitable, legally binding judgment,”.
She was then interrupted, but went on to say that
“in that kind of situation”—
presumably that is the delivery of a binding judgment against the UK—
“we would unfortunately see international organisations following that determination, such as the International Telecommunication Union.” —[Official Report, 26 February 2025; Vol. 762, c. 874.]
If we put all those ministerial utterances together, we are going round in circles.
The Government say that they have to act because of the inevitability of a binding court judgment against the UK. They mention the ICJ, but the ICJ cannot make a binding judgment against the UK on this. They hint at ITLOS cases, but those refer to ICJ decisions. The Government then say that they are worried about the actions of the International Telecommunication Union, but when pressed that seems to mean actions that would follow a binding court judgment. We are back to square one.
Mr Mark Francois (Rayleigh and Wickford) (Con)
Is it the case—my right hon. and learned Friend is a former Attorney General—that the ITU treaty to which we and others are a party states specifically that the ITU has no authority over the allocation of military spectrum, or military communications? It is clear that the ITU has no leverage legally at all over Diego Garcia.
Sir Jeremy Wright
My right hon. Friend makes an important point, which I know he has made before. I repeat the point I made earlier: we are simply not getting from the Government an adequate rebuttal of these points, and we need to have that. If the Government have a good answer to what he and my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) have said, Second Reading of the Bill is the moment for the Government to deliver that explanation. We are all still waiting.
Sir John Whittingdale (Maldon) (Con)
My right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) is right, but the existing position goes even further. Is my right hon. and learned Friend aware of the written answer from the Government on 7 February this year:
“Individual countries, not the ITU, make their own sovereign spectrum assignments in accordance with the Radio Regulations. The ITU has no legal authority over these assignments regardless of the country’s civilian or military classification of spectrum.”?
Sir Jeremy Wright
I am extremely grateful to my right hon. Friend, and perhaps I should refine my argument. It is not just that the Government are not answering the questions; it is that when they do answer the questions, they undermine their own argument. It is worse than we thought. We are not getting clarity from the Government about what would be the legal judgment that they themselves have relied on as almost the entire basis for their actions, and this really matters. The Government owe us a proper explanation.
I am prepared to concede—I hope the Minister will accept that I am a fair-minded person—that there may be a persuasive argument that the Government could make about which court and which circumstances would deliver the kind of judgment that makes this action inevitable and necessary, but I have waited a long time to hear it, and I am still waiting. I hope that when the Minister stands to sum up the debate he will give us that answer, because the House of Commons deserves to hear it.
Mr Francois
This is fundamental to the whole argument. We have pressed the Government for months to tell us what the legal threat to the islands was. In his opening speech the Minister said that it was UNCLOS. That was the justification they have given us. Does my right hon. and learned Friend agree that we have a general opt-out and two specific opt-outs under article 298(1)(b) of the United Nations convention on the law of the sea, which includes “disputes concerning military activities”? We have an opt-out from UNCLOS. The Government’s whole case is spurious—£35 billion worth of spurious.
Sir Jeremy Wright
It is certainly very expensive. I know lawyers who charge big fees, but none of them would come close to that.
My right hon. Friend makes his point, and again, the Minister will have another opportunity when he speaks. It is not good enough, I am afraid, for hints and oblique references to be made. We are owed a clear explanation. This is a fundamental decision on defence and security, and in financial terms as my right hon. Friend has just said, and we deserve to know. If the Minister tells the House that describing all that in detail is the sort of confidential and sensitive information that the whole House cannot hear, I have good news for him: that is what the Intelligence and Security Committee of Parliament is for. I have the honour to be a member of that Committee, and it is perhaps regrettable that the Government did not choose to explain themselves and make their case to us before they brought the Bill to the House, but they did not.
Sir John Hayes (South Holland and The Deepings) (Con)
Will my right hon. and learned Friend give way?
Sir John Hayes
I am extremely grateful to the former Attorney General for giving way. He is right to say that the matter could have been—and still could be, as I think he will also want to confirm—brought to our Committee. If, even at this late juncture, an overture were made to our Committee—clearly, it would have to be discussed at Committee—it would be perfectly possible for the Government to set out in those terms the advice they received that legitimises the position that they have taken.
Sir Jeremy Wright
My right hon. Friend makes a good point. Although all our hearings are held within closed doors, he is right that until that happens, our door is open. There is an opportunity for the Minister, if he wishes to take it, to make that proposal.
Let me come back to the point that the hon. Member for Leyton and Wanstead (Mr Bailey) made. His rejoinder and the rejoinders of his colleagues and Ministers have always been the same throughout this debate. They say, “The last Government began negotiations on this, so clearly the last Government accept the same logic that we accept.” That simply will not do. As Ministers and the Back Benchers behind them have been very keen to point out, the last Government had 11 rounds of negotiation on this question. If they had chosen to do the deal that this Government have done, they had ample opportunity to do it, but they did not. That can only be because they did not believe it was the right deal to do.
This Government are undoubtedly enthusiastic about getting swift resolution of disputes—it seems that they apply the same principles to labour disputes—but settling a negotiation fast is really very easy if we give the person with whom we are negotiating everything they want. What Mauritius wanted out of this negotiation was sovereignty over the entire Chagos archipelago, and that is what this Government have given them. I am afraid that we really cannot award any points for the fact that this Government have managed to resolve this issue more swiftly. The fact that the Government of which some of us Conservative Members were part did not resolve it that quickly is perhaps because they were not prepared to give ground on that particular issue.
We need an explanation of why the Government feel it is necessary to do this deal. We need an explanation on what precisely the legal jeopardy they face is and what its origin is, and we need to know what the binding legal judgment they fear is. Frankly, without those explanations, this House should not be asked to agree to this Bill or this treaty.
Graeme Downie (Dunfermline and Dollar) (Lab)
We have heard from Members on the Opposition Benches a slew of political opportunism, scaremongering, some cliché bingo and some derogatory terms—something that belongs more in a tabloid than in this House—about the Chancellor of the Exchequer.
Back when these negotiations started, the Conservative party knew that a deal was needed—it may have been somewhere on its list of priorities when it still had some lingering credibility about the good of the nation. The Conservative party knew that a deal was in the best interests of the United Kingdom and our allies. It knew that without a deal, Mauritius could very well have pursued a sovereignty claim and allowed Russia and China into the waters around Diego Garcia. People do not sit through 11 rounds of negotiations if they do not think something is important; they walk away. To give the previous Government credit, they did not do that. They understood the importance of a deal.
Graeme Downie
That point was covered before. We have already seen scaremongering from the Opposition about the other British overseas territories, including the Falkland Islands and Gibraltar. I hope that the Conservative party will reflect on and apologise for that.
None the less, the previous Government knew that a deal would keep Britain safe. They knew that without a deal, international courts could effectively make the base inoperable, and they knew that that could plant China right on our doorstep. Now, they cannot even say why it was important. They cannot say why they even started the negotiations; several Government Members have raised that point, and not once have the Conservatives been able to say why, other than hiding behind the fact that they are being entirely politically opportunist. They knew all that, and they now pretend that none of it matters. They are playing politics with Britain’s safety.
Cameron Thomas (Tewkesbury) (LD)
It is rare that I find myself aligned with the Conservative party, but I share its concerns for the structure and veracity of this deal. That being said, does the hon. Member share my bewilderment that the Conservative party has chosen this particular hill to die on, given that the Bill is as much a product of its work as it is of Labour’s?
Graeme Downie
I thank the hon. Member for his intervention. At the beginning of the intervention, I was going to point out that there were five years during which the Liberal Democrats were very close to the Conservative party, but I will remove that thought from my head and agree with him. This does seem a very strange hill for the Conservative party to die on, but I am not surprised by the level of hypocrisy we have seen from some Conservative Members.
That is the real hypocrisy. The Conservatives have attacked the cost of this deal, but they will not reveal what their own deal would have cost. Government convention means that their numbers are locked away—secret, hidden, unable to be scrutinised and compared. They will hide and hide. Would Conservative Front Benchers like to give any figure, in any currency of their choosing? What was their number? How much was it going to cost? What was the number on the bottom of the piece of paper after 11 rounds of negotiations? The truth is that this Government secured the deal that the Conservative party knew was critical for our national security, but could not deliver.
While we are talking about costs, let us put this into perspective. As the Minister said in his opening speech, France pays €85 million a year for a base in Djibouti, one that shares a fence with a Chinese naval facility and enjoys none of the security that comes with this Government’s deal on Diego Garcia. Diego Garcia is 15 times bigger, more secure, and delivers unmatched operational freedom for the United Kingdom and our allies. Let us be clear about what this treaty delivers. It secures Diego Garcia; it locks in control of the land, the sea and the electromagnetic spectrum; and it shuts out foreign militaries from the outer islands. That is a serious deal—a deal that represents value, one that the Tories could never close, but now choose to attack from behind a shield of secrecy.
Lincoln Jopp
I do not know whether the hon. Member listened to the outstanding, forensic dismantling of the Government’s case by my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), but on the basis that every constituency in this country will kiss away the opportunity to have £52 million as a result of this deal—that is what it is going to cost in total—would he like to tell the people of Dunfermline and Dollar why he would rather give away that amount of money to a foreign Government on a spurious legal basis than invest it in his own constituency?
Graeme Downie
I thank the hon. Member for his intervention—he is someone for whom I have a lot of respect. I would tell my constituents that this country is now safer and more secure because of the deal that this Government have done.
Let us see who is on the Government’s side. The United States backs the deal, with President Trump having called it
“a very long-term, powerful lease”.
Australia, Canada, New Zealand, India, NATO and the overseas territories all back the deal, because they understand that Diego Garcia is vital to our security and theirs. Who lines up against it? Who is the proud company that the Conservatives keep? Nigel Farage and Reform.
Madam Deputy Speaker (Caroline Nokes)
Order. We do not refer to Members by name, but by constituency.
Graeme Downie
I apologise for that, Madam Deputy Speaker.
We have seen Reform UK peddling fantasies about America that were flatly wrong. Beyond these shores, what do we see? Vladimir Putin and Xi Jinping in Beijing both know that they could have access to the waters around Diego Garcia were it not for the deal that this Government have secured. That is the roll-call—that is who Conservative Members stand with, and that is who they will be voting alongside if they block the Bill. We saw Reform swaggering around, claiming that it would get President Trump to block this deal, but the truth has been the exact opposite. The United States has clearly welcomed this treaty, as we have heard so often this afternoon. Reform did not just misread the room; it misread and misrepresented one of our closest allies, talking Britain down and peddling fantasy while a serious Government deliver and secure our safety. This Bill is about strength and weakness. This is strength and that is weakness—order from the Government versus chaos from the Opposition, Britain standing with our allies versus Britain opening the door to our adversaries.
Just a couple of years ago, the Conservatives knew that this deal was vital. They wanted it in office—like the hon. Member for Tewkesbury (Cameron Thomas), it pains me to sometimes agree with the Conservatives, but for once, they were correct. They were right to want this deal, but only when they lost power did they suddenly discover their doubts. That is not principle; it is opportunism.
Sir Jeremy Wright
I understand the argument that the hon. Gentleman is making, but why does he think that the last Government did not make the deal?
Graeme Downie
I thank the right hon. and learned Gentleman for his intervention. I listened very carefully to his speech—it was very interesting indeed, and I respect his viewpoint. My short answer is that the last Government just could not seal a deal, like they could not seal a deal with the EU and could not seal a trade deal with India. They abandoned the people of this country.
I will close by saying that I will proudly vote for this Bill tonight. It puts the UK on the side of our allies and on the side of security, and ensures that we will be protected for generations to come.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
Just to make a small comment on the previous speech, I have been here a little while, and I have never once stopped regretting taking a Government handout to speak in support of the Government, because more often than not, it rebounded on me. As my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright) and many others have made clear, there are two elements to this issue.
Before I start on that, I want to say something about the Chagossians. They are the last people to have been seriously consulted about any of this. The way that we behaved to them back in the 1960s was appalling. It should never have happened, and there was no need for it to have happened. They should have been able to stay on the archipelago, and we should have supported them in that. They must be a part of this. I know that they are very fearful of this deal as it stands.
My other point is that this arrangement is vague about what happens after 99 years. We are supposed to guess, or believe that we can trust Governments to make the right decisions. The statement on the rights of the Chagossians is completely missing a sense of where they will be, what they want and how we will bring that about. I pay tribute to the Member who made a good intervention on that point.
Let me quickly deal with the legal case, and then I will discuss the cost, and China and Russia. The Government have been peppered with requests non-stop since this process began to explain the legal threat that meant that we would be in real trouble if we did not seal a deal—any deal. Right the way along, they would not exactly explain. There were little suggestions here and there that a judgment would lead to certain things. My right hon. and learned Friend the Member for Kenilworth and Southam has been absolutely right on that.
Today, I thought that the door slightly opened. I have known the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty), for a long time, and his name is a good description of his solidity and purposefulness. The Minister who opened the debate, the hon. Member for Plymouth Sutton and Devonport (Luke Pollard), made the point that the legal threat was to do with UNCLOS. I was intrigued by that, because, as I just said to my right hon. and learned Friend the Member for Kenilworth and Southam, within UNCLOS, clear for all to see, is a complete let-out for the UK Government when it comes to the case that they suggest would be brought against them under UNCLOS. The threat simply does not exist. I repeat that there are two exemptions, under article 298(1)(b) and 298(1)(c). The first has the UK opted out of
“disputes concerning military activities…by government vessels and aircraft engaged in non-commercial service, and disputes concerning law enforcement activities”.
The same applies under 298(1)(c) in relation to matters taken up by the UN Security Council.
The important point is that the threat does not need to be recognised, because ultimately this comes back to the original International Court of Justice ruling. That was an advisory judgment, because the Court cannot make an absolute judgment on anything to do with our relationships with the Commonwealth, either existing or previous; that is an important point. We keep coming back to this check on what would happen. The idea that everybody will dispute with us on that is simply nonsense. From a legal perspective, I think the Government have come unstuck in this debate. I have sat through many debates in this House, and it is rare that a Government completely come unstuck on a case of legalities.
The second bit that the Government have come unstuck on is the money. On the legal side, they will not tell us exactly what the situation is. There have been hints, proposals and suggestions that somehow we were in a desperate situation. On the money, I have never seen a Government as unable or unwilling to tell us exactly how much things cost or are worth. They are normally quick to do so, and to blame the other side, or whatever—it does not really matter. Everybody has been chasing the Government for that information, and now we discover that they have gerrymandered the figures for the overall statement. The total cost is nearly £35 billion, and we need to deal with total cost.
Let me remind the Government of the problem with what they call the GDP deflator and the so-called social time discounting method. The Government Actuary’s Department has dismissed that as a real way of calculating cost for this kind of issue, and it has re-emphasised the fact that understanding the total cost is the only way to look at a long-term treaty. The Government is relying on the cost-benefit analysis used for social projects. There is particular concern about long-term projects, and a real dispute about whether such a method can predict precisely, or even reasonably well, the overall cost in the long term. There is a lot of concern about whether that is the right way to go. Add to that the fact that the Government are trying to predict what will happen in Mauritius, under the Mauritian Government, over the next many years. This is a 99-year deal, and there is no way on earth that we have any control.
Tom Tugendhat
I wonder whether my right hon. Friend can help me in giving a prediction. Two families have swapped leadership of Mauritius over the last 60 years. Does he see any reason to doubt that the same two families will swap leadership over the next 60?
Sir Iain Duncan Smith
That is exactly the point. There are serious concerns about the uncertainties surrounding future growth and societal wellbeing. If there are such concerns when it comes to UK predictions about the UK, imagine how difficult it is to predict what will happen in Mauritius, so this should be dismissed.
It is interesting that after not answering the question for so long, suddenly the Government have popped up with a new device. They say that if we do not accept the figures, we are completely dismissing the Green Book, but the overall cost is not a Green Book issue, because this is about paying somebody money outside the UK, not about controlling cost. That is why the Green Book has never been used for this purpose before, and never will. I simply say to the Government that the money side of this has fallen apart again.
I come to the third element. As I said earlier, we have had no real vote or debate on the treaty, as opposed to the Bill. The old CRaG system has been rushed through, without a vote. I have to tell the Minister, for whom I have a huge amount of respect, that that is simply appalling, given that we are dealing with something as strategically important as this treaty.
Clause 5 of the Bill, which is a very flimsy document, is entitled “Further provision: Orders in Council”. Anybody who reads that will have a sudden intake of breath. The whole point of this Bill is negated by clause 5. What is the point of debating the rest of the Bill, given that clause 5 says that at any stage, and under any circumstances, the Government can change it all by Orders in Council? Absolutely everything can be changed by Orders in Council, with no vote and no dispute. If the Government decide to go in a different direction, they do not have to consult Parliament any more.
The sweeping powers in the Bill are ridiculous. When the Minister was in opposition, he used to spend his whole time moaning—quite rightly—about Governments who give themselves such powers. Even by the standards of previous Governments, this Bill is pretty astonishing. It is a massive sweep. This is not really democracy any more; it is monocracy. In other words, we have given up debate and dispute, and we have handed things over to one person—the Prime Minister. I say to the Government that the Bill is appalling, and they really need to rethink it. We simply cannot go through with something as appalling as this. I can remember the Maastricht debates, and various others in which we spent a long time debating clauses on the Floor of the House. That was the right thing to do, because such issues are important. International treaties are vital to our wellbeing, and the Bill simply does not work.
The last thing I want to say is on China. I would say this, because I am sanctioned by China, as are some of my hon. Friends. I suspect that others will be sanctioned as well in due course. If they carry on working with me in the Inter-Parliamentary Alliance on China, they are bound to be sanctioned, and I look forward to their joining us at that table. There is no way on earth that China does not benefit from this Bill. China has its eyes on the very important flow of commercial traffic that runs just below the Chagos islands, which it has always wanted to be able to block, control or interfere with.
The Chinese already have a naval base in Sri Lanka, which they got by default on the back of the belt and road initiative, due to non-payment. For a long time, they have been looking at how, under their arrangements with Mauritius, they will eventually be able to intervene. They are two or three steps further forward as a result of this Bill. It does not secure us against that absolutely, because we gave up absolute security and control when we decided to hand over sovereignty to Mauritius.
Cameron Thomas
I am not yet on the Chinese Communist party’s sanctions list, but perhaps I will be shortly. Does the right hon. Member share my concern about the 99-year lease of the islands, given that some of our adversaries across the world plan and strategise over the very long term, and 99 years is actually a short period of time?
Sir Iain Duncan Smith
The hon. Gentleman is absolutely right that the Chinese Government have a long-term plan. In fact, they are very clear about what they wish to do. If anybody does not think that China poses a threat on all these issues, what were they doing last week when, on our television screens, we saw President Xi, with the North Korean dictator on one side and the Russian dictator on the other, talking about a new world order? That continues to be the Chinese Government’s purpose. They should have been taken into the upper tier of the foreign influence registration scheme. Why are they not there? My suspicion is that this was not done because it might well have ended the whole negotiation on the Chagos islands, as there would have been huge interventions, and we could not possibly have done aught else but stop the negotiation.
In conclusion, I honestly think that the Government need to pause this, go back to the drawing board, and say, “We got it wrong”, but I say this in answer to the endless briefing they have given Labour Members on what the Conservative party did about the Chagos islands in government. I have reached the conclusion that no matter who is in power, I am in opposition, so I can categorically tell the House that, whatever else happened, this was quite rightly ended by Lord Cameron when he became Foreign Secretary. Some of us made it very clear that this should not have gone ahead for many of the reasons that I have laid out. I end by saying to the Minister that it is no good coming back later and saying, “I wish we hadn’t done this.” Now is the time to stand up and say, as the hon. Member for Crawley (Peter Lamb) did, that this does not work, it must stop, and the Government must think again.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
I rise in support of the Diego Garcia Military Base and British Indian Ocean Territory Bill. This Bill is not only timely, but essential for our national security, our international obligations and the strategic future of the United Kingdom.
To be clear, Diego Garcia is not just an isolated atoll in the Indian ocean, but one of the most geopolitically significant military outposts of the 21st century. It serves as a critical base for joint UK-US operations in a region fraught with instability from piracy off the horn of Africa, and given the growing threat of Chinese expansionism in the Indo-Pacific. This Bill secures long-term operational certainty for our armed forces. It ensures our ability to meet NATO commitments, protect trade routes vital to the global economy and respond quickly to humanitarian crises across Asia and Africa. In a time of escalating global tensions everywhere from the South China sea to the Red sea, we cannot afford ambiguity when it comes to our defence infrastructure.
I have listened with concern to the arguments made by Opposition Members, some of whom appear more preoccupied with ideological purity than practical governance. Is it not strange that 85% of the negotiating rounds on the Diego Garcia deal took place under the Conservatives? They had access to the same legal advice, the same security briefings and the same threat assessments as we do. Only after leaving government and with no deal of their own did they begin playing politics with national security. Their sudden opposition is not principled; it is opportunistic and irresponsible. Opposition Members talk about international law and cite advisory opinions from the International Court of Justice as if they were binding judgments. Let us not forget, however, that sovereignty is not a matter of hashtags or press releases; it is a matter of law, treaties and responsibility.
The United Kingdom has administered the British Indian Ocean Territory for more than half a century, and we have done so in close co-ordination with our allies, especially the United States. Simply to walk away, as some have suggested, would be an act of geopolitical negligence. To those who argue that the base should be dismantled or handed over to another power under the banner of anti-colonialism, I say that they should be very careful for what they wish. If Britain and the United States vacate Diego Garcia, we would leave behind not a vacuum, but a prize, a strategic jewel, which would be swiftly eyed by authoritarian regimes that have little regard for human rights, international law or democratic principles.
Our responsibility is not to rewrite history by dismantling today’s defences, but to shape the future by ensuring that they remain strong, legitimate and effective. The Bill provides legal clarity and the operational authority for the continued use of Diego Garcia. It will strengthen the framework for oversight, introduce renewed commitments to environmental stewardship and, importantly, establish a pathway for dialogue with Chagossian representatives about resettlement and heritage—it is important that their voices are head and listened to. This is not a Bill that closes doors, but one that opens them, without compromising national and global security. Opposition for the sake of opposition is not leadership. Would the Opposition have us abandon a key, NATO-aligned military base to prove a point? Would they rather hand strategic influence in the Indian Ocean to those who undermine the international rules-based order?
Let me remind the House of the real threats in our world: cyber-attacks, terrorist attacks and networks, illegal arms trafficking and hostile naval activity. Diego Garcia is not some relic of the cold war; it is a strategic capability that we rely on today.
Several hon. Members rose—
Lillian Jones
I will not give way. The Bill is pragmatic, proportionate, grounded in the national interest and fully compatible with our democratic values. It does not ignore the past; it confronts it, and seeks to chart a responsible path forward. I urge my colleagues across the House, especially those wavering on the fence, to vote not out of ideological purity, but out of practical necessity. The world is watching. Our allies are watching. History, too, will judge what we choose today. Let us choose strength, responsibility, regional and global security, and to back the UK’s national security.
Paul Holmes (Hamble Valley) (Con)
It is a pleasure to see you in the Chair, Madam Deputy Speaker. During an intervention on the Minister for Defence Procurement, I said that he was acting in a “duplicitous” way. I have already been rebuked by Mr Speaker, so you do not have to step in, Madam Deputy Speaker, but I would like to say that I misspoke when I said that the Minister was not being genuine. I apologise to him—I never play the man; I always play the ball. It is a shame that he is not present to hear that apology.
However, I welcome the Minister for Defence Procurement—he is a good friend of mine, and I look forward to him serving in that position—but I will say that that career has not started well. The first moment that he appears before the House in charge of defence procurement in this country, he single-handedly starts by advocating disposing of a vital piece of defence infrastructure, which is not only relevant but essential to the national security of the country. He stood here to try to defend the indefensible. I suggest to the Whips Office that they might want to look at some of his decisions in future, if he is in charge of procuring defence equipment on behalf of this country, because so far he has only been successful at getting rid of vital infrastructure. I hope that he does better.
The first job and the first duty of any Government that serve the great people of this great country is to keep their people and themselves safe. I never thought that I would come to this House on a day like today to see a Government, this Government, creating the biggest act of self-sabotage that I think we have seen in generations of elected Houses in the history of our nation. The Government are harming not only our security, but the strategic interests of our people and the security of this country.
Jacob Collier (Burton and Uttoxeter) (Lab)
If the deal is harming our strategic interests, why is it backed by our allies, the United States and NATO?
Paul Holmes
If the hon. Gentleman had bothered to show up for the entire debate—I think that he has only just arrived in the Chamber—then he would have heard the answer to those questions in excellent speeches given by hon. Members from across the House. In response to his question, why is the deal also backed by so many counties that have malign influences towards the interests of the United Kingdom, such as Russia, China and Iran? If he stays for the rest of the debate, he might hear some answers to those questions too. It is easy for Labour Members to stand in the Chamber and read a Labour party briefing, thinking that if they say things time and again, they must be true, and that people outside the Chamber will expect what they say will be true.
I was the Parliamentary Private Secretary to Lord Cameron of Chipping Norton when he was Foreign Secretary. He said to Foreign Office officials at that time that the negotiations that had started and were being explored went past his red line. My right hon. Friend the Member for Braintree (Sir James Cleverly), who was Foreign Secretary when some of the negotiations happened, said to his Foreign Office officials, “As the democratically elected Foreign Secretary, these recommendations go beyond my red lines.” Those negotiations were then stopped by Lord Cameron—I remember him instructing Foreign Office officials to stop those negotiations—so I say to hon. Members, including the hon. Member for Dunfermline and Dollar (Graeme Downie), that just because negotiations and conversations have started, we do not have to accept a conclusion that we do not want.
Graeme Downie
As we have heard already in the debate, apparently we cannot hear a negotiating position, so will the hon. Gentleman describe in detail exactly what those red lines were?
Paul Holmes
I will tell the hon. Gentleman what one of those red lines was: not paying £35 billion to another country. In case he wants to read his Labour party briefing again, I remind the hon. Gentleman that another red line for the last Foreign Secretary was that he clearly did not accept unilaterally that the sovereignty of the Chagos islands fell with Mauritius. That is a key difference between the last Government and this Government.
This is a bad deal for Britain: it will cost £35 billion, while the Government tax and spend and make people in this country poorer, and in an ever-changing international security situation, this country is unilaterally giving up a strategically important defence base, in an area of the world where we are seeing more geopolitical uncertainty. I cannot put into words how bad this Bill is, except to say that it is an act of self-sabotage that we have not seen in this House by a democratically elected Government for generations.
To reiterate, not only is this a bad deal, but it is backed by every nation that is malign to our national interest, including China, Russia and Iran. Last week, at an international summit, those countries were actively advocating some of the malign influences about which this Government and the last Government spoke about, and they are actively backing this deal. I challenge Labour Members to look Opposition Members or any of their constituents in the eye and say that a deal that is successful for this country should be backed by Iran, China and Russia.
Madam Deputy Speaker, I am trying to work within the confines of parliamentary etiquette, but I have to say that there is something deeply concerning about the way that this Government have chosen to negotiate the terms of the agreement. We have to look at the close links between the key people who negotiated this deal with the Mauritian Government and the links—private links—to the Prime Minister and Ministers in this Government. The Prime Minister of Mauritius has said in the Mauritian Parliament that officials were asked to leave the room while private negotiations were going ahead. I have never known a responsible Government who are trying to hand over sovereignty of a British overseas territory to ask officials, who are there to protect the integrity and the transparency of the of decisions that Ministers take, to leave the room so that a negotiation can go on. Why have the Government hidden the cost of the deal? Why have they refused to give this House a solid and sustainable way to scrutinise the decisions of the Government? They have avoided scrutiny at every turn.
Sir John Hayes
Perhaps I can invite my hon. Friend to be helpful to the Minister. He clearly holds him in some regard, and he is right that he has got himself into something of a mess. By far the best way for the Government to proceed from hereon would be to make much more available either to this House or, as the former Attorney General, my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright) suggested, to the Intelligence and Security Committee. That would clarify the terms of this trade—why it happened and the assessments that were made that led up to it—in a way that the House would be able to either legitimise what the Minister claims or refute it. A lack of transparency is half the Minister’s problem.
Paul Holmes
I agree with my right hon. Friend. I found it quite concerning earlier that the Chairman of the Defence Committee, the hon. Member for Slough (Mr Dhesi), relied on the fact that American counterparts in an Administration that he does not scrutinise backed the deal, so there was no need for the Defence Committee to interrogate Ministers of the Government it is supposed to scrutinise. There have been two offers this afternoon, one by my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), and the other by my right hon. and learned Friend the Member for Kenilworth and Southam, in his expert speech. There is a scrutiny structure in this House called the Intelligence and Security Committee to which the Minister could refer this decision, and he can rest assured in the knowledge that there are expert Members across the whole House who could offer their expert opinion on the deal. The Government have chosen not to do that. That is an indictment of the transparency and the drive the Government have shown in getting the deal very quickly.
Alex Ballinger
The hon. Gentleman will know that the Foreign Affairs Committee had the Minister in front of us to discuss the deal, so there has been parliamentary scrutiny on this, including by other Committees, just not by the Defence Committee. On the costs, as the PPS to Lord Cameron, maybe he can say a little bit about what the cost was of the deal they negotiated at the end of those 11 rounds—whether it was higher or lower than the deal we have reached now.
Paul Holmes
I can tell the hon. Gentleman. Let me say it very clearly and very slowly, because I know that hon. Members have written their speeches before the debate started: zero. Zero is less than the deal the Minister is choosing. Let me repeat it very slowly for the hon. Gentleman and for Members across the House: the deal was ended. There was no deal. The negotiations stopped. There were no negotiations.
Paul Holmes
I will in a second. I just want to emphasise the point so we do not hear it again. There were no negotiations. There was no deal. [Interruption.] The negotiations were stopped. There was no deal on offer, and no money was being offered. I hope that Members will scratch that bit out of their speeches as they go forward.
John Slinger
I thank the hon. Gentleman for giving way. The former Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak), called the Mauritian Prime Minister on 22 February 2024 and reassured him that
“the UK remains committed to a mutually beneficial outcome…and their teams look forward to continuing to work on this.”
Will he comment on that?
Paul Holmes
Yes, I absolutely can. I am not a lawyer, but I would say it is crystal clear in the sentence the hon. Gentleman has just read: “mutually beneficial”. What the democratically elected Government of the day decided, through Lord Cameron of Chipping Norton, who I said—if the hon. Gentleman was in the debate earlier, he would have heard it—[Interruption.] The hon. Gentleman says he has other things to do, Madam Deputy Speaker. I suggest that if he thinks this is very important, he should have been here for the whole debate and not just intervene on a debate that I think is about national security. I repeat the point to him: the Foreign Secretary at the time ended the negotiations because, as the then Prime Minister said, “mutually beneficial” was deemed not to have been the case.
I want to touch briefly on the arguments put forward by the Government about hiding behind international law. I cannot do it justice like my right hon. and learned Friend the Member for Kenilworth and Southam, but it is clear that the Government keep hiding behind judgments that they have to follow. I remind the Minister again that it is not a binding judgment. If the Government had chosen to challenge that non-binding judgment, he would have had the support of those of us on the Opposition Benches. The Government decided not to do that and have accepted a non-binding judgment and fast-tracked the capitulation and surrender of a British overseas territory for the first time in a long time. The Minister could have challenged that decision, because it was non-binding. I shall let the record stand with the speech by my right hon. and learned Friend the Member for Kenilworth and Southam, who went through the numerous international structures that this Government have signed up to and set out how we did not have to follow that.
Lastly, clause 2 is absolutely disastrous. The hon. Member for Crawley (Peter Lamb) spoke of the historical context here. I congratulate and commend the hon. Gentleman for his speech; he is an incredibly brave and principled man who stands up for his constituents. Under clause 2, this Government have decided unilaterally to recognise that Mauritius has sovereignty over the Chagos islands. I remind the House and the Government that Mauritius has never in the historical context of the Chagos islands had sovereignty, and that this Government have chosen to give sovereignty over the islands to a country that has never had it.
Paul Holmes
I will in a second.
Some, including the right hon. Member for Islington North (Jeremy Corbyn), have said that we want to “return” the islands. I say that is impossible, because it is not possible to return sovereignty to a country that never had sovereignty in the first place. This is a decision and a negotiation undertaken by this Government, and they should hang their heads in shame over the way they have done it.
Jeremy Corbyn
The agreement that was reached between the British and Mauritian Governments in 1965 was to separate the Chagos islands from Mauritius. Decolonisation processes of the UN and all others have confirmed that it should never have happened, and that they should never have been separated. If they had never been separated, we would not even be having this debate today.
Paul Holmes
I disagree with the right hon. Gentleman, because it was clear in the negotiations that took place in the ’60s, when the United Kingdom paid Mauritius, that Mauritius actively accepted that it had no sovereignty claim over the islands, and that stands in international agreements from times gone by.
This Bill is a bad deal. It is a bad deal for the United Kingdom and for our constituents; and it is a bad deal because of the money that this Government have decided to spend, and because of their decision to tax people while spending £35 billion overseas. The Government have abandoned the usual norms of the traditional Governments of this country of standing up in a transparent way for the way we act internationally; they have decided to abdicate their responsibility in doing that.
This is a bad deal for this country. It has been welcomed by malign international partners, it has undermined our defence, and it will cost us billions. Above all, with this Bill, the Government have abandoned and avoided every scrutiny mechanism within the House of Commons that would enable hon. Members to challenge them and get the answers that this House quite rightly deserves—[Interruption.] Government Members say that we have the chance today, but I remind them that many, many Members have asked questions of Ministers about the legal position on refusing this, and Ministers have been unable and unwilling to provide answers in the context of the international law that we have spoken about to do that.
This is the day that the Labour Government showed the British people out there, as well as the Chagossians in the Public Gallery today, that they do not stand up for the people of this country. They did not stand up when we saw that international law might go against us. They chose to abandon their responsibilities to protect the people of this country and the military assets that this country has in the overseas territories.
I predict that, in the four years ahead, this £35 billion surrender treaty will come to haunt this Labour Government. I remind Government Members that after they have gone through the Lobby and voted for the Bill tonight—after they have read out their Labour party briefing saying that it is the right thing to do—they will have to knock on doors and explain how they gave £35 billion of taxpayers’ hard-earned money to a country that never had sovereignty over this British overseas territory. They should hang their heads in shame, and I think they will do so.
Madam Deputy Speaker (Caroline Nokes)
Order. Before we move on to the next speaker, I remind right hon. and hon. Members that it is not in order to impute false or unavowed motives to any other individual hon. Members in this place.
Tim Roca (Macclesfield) (Lab)
It has been a long afternoon, but I should say from the start that I genuinely believe that the motivation of all of us is the national interest of the United Kingdom. Whatever differences of opinion there might be, I think it is important that we try to avoid hyperbole in this matter and think coolly and calmly about what is in the UK national interest.
There are tests we need to apply to what we are discussing: first, does it protect UK national security; secondly, do our allies and the professional military and security establishment support it; and thirdly, are the costs and obligations reasonable and proportionate? We also need to have a weather eye to our responsibility to the Chagossians, and I pay tribute to my hon. Friend the Member for Crawley (Peter Lamb) for speaking passionately on behalf of his constituents. I believe the answer to those three tests is yes, and I will address them in turn.
Diego Garcia is not just another overseas facility; it is fundamental to our security. It is where our forces and US forces have launched operations against high-value terrorist groups. It is a communications and logistics hub, and it is where we monitor hostile states and safeguard global trade routes that underpin our economy. Without this treaty, all that is at risk.
Ministers have outlined that international rulings could make the base inoperable. I spoke earlier to Dr Marco Longobardo, a specialist in international law, and it is clear that even the non-binding ICJ judgment is nevertheless a matter of international law and potentially gives hostile countries the opening that they need to contemplate interference in the islands—in the same way that Chinese claims in the South China sea are not recognised by many countries. That is all at risk. Our ability to berth submarines, patrol waters or launch operations would be compromised, and a vacuum would be created.
Tim Roca
I believe that the hon. Member has had quite a lot of turns today, and I have been waiting a long time without intervening, so I will proceed. If we allowed a vacuum to be created, it would be filled by China or others in a region that is vital to our security. I will come back to China in a moment, because what China thinks about this treaty is important as well.
Turning to the first test, the treaty secures 99 years of guaranteed access, with the option to extend it by a further 40 years; 99 years was good enough for Lord Salisbury, so it is good enough for me. It gives us full operational control over installations, logistics, communications and the electromagnetic spectrum. It establishes a 24-nautical-mile buffer zone and bans any foreign military presence on the outer islands. We have talked about how it protects a unique maritime environment and provides tangible support through the trust fund for Chagossian communities. On the first test I am satisfied.
On the second test—whether the agreement commands the backing of allies and experts—other colleagues have spoken powerfully about this, but Lord Goldsmith, a former Attorney General, said it was
“consistent with our national security interests and with our respect for international law”.
The international support is equally strong. Australia’s Kevin Rudd called it a
“good outcome for Mauritius, for Australia, for the UK and for our collective security interests”.
Canada’s foreign ministry said that it ensures
“the long-term, secure and effective operation”
of the joint base, strengthening a free and open Indo-Pacific.
In the United States, where there is not much that gets bipartisan support, it is a bipartisan matter. Antony Blinken said that America “strongly supported” the negotiations. Secretary of State Marco Rubio commended the “leadership and vision” shown. The Democratic former Defence Secretary Lloyd Austin said that the agreement will
“safeguard strategic security interests into the next century.”
I believe an hon. Member has already quoted President Trump, who described it as an amazing deal, a beautiful deal or whatever kind of deal—but a good deal, that is the main point.
The international consensus is clear. Our allies, partners and experts back the deal. I was very taken by the comments of Professor Benjamin Sacks of the RAND school of public policy in the United States. He said:
“I contend that Beijing privately views the agreement, even if modified to ameliorate some Chagossians’ outstanding demands, somewhat as a setback. In practical terms, it gains little if any advantage from it.”
He added:
“The Chagos issue constituted a perennial problem for British foreign policy; one that China could simultaneously exploit to demonstrate its supposed adherence to existing RBOs”—
rule-based orders—
“and undermine the UK’s traditionally important role in maintaining it.”
He also said that the deal deters Port Louis—Mauritius—from becoming an effective client state of Beijing. On the point of whether our allies support it, I believe that the treaty meets the test.
Tim Roca
I will not. I experienced the right hon. Gentleman defending the hereditary principle last week, and I do not think I have the strength in me this week to listen to another argument.
The final test was on costs and obligations. Again, Ministers have talked powerfully about the deal being less than 0.2% of the defence budget. Comparisons have been made with what the French are paying in Djibouti, and I am glad that we are getting a better deal than the French. Of course, Diego Garcia is 15 times larger than those bases and in a more strategic location. The treaty gives us immense operational freedom. It therefore seems to me that this is a modest investment for an irreplaceable asset. The risks from delay or abandonment—in this argument, we have to balance the treaty with the risks of what could happen—are vastly greater.
Dr Pinkerton
The hon. Gentleman describes Diego Garcia as an irreplaceable asset, but the Chagossians sitting in the Gallery do not see it as an asset; they see it as their home. Even though they have been displaced from their home for the best part of 50 years, they tell me that they see the actions in the Chamber as a new round of the same colonial humiliation they experienced in the 1960s and 1970s. What does the hon. Gentleman say to those Chagossians here today?
Tim Roca
I thank the hon. Member for raising that important aspect. We should all be honest that, as was put powerfully by my hon. Friend the Member for Crawley (Peter Lamb), our country’s history with the Chagossians has been very poor—if we look at some of the diplomatic cables from the 1960s, we see that disgraceful language was used—but I was reassured by what Ministers said about the preamble of the treaty and some of the provisions put in place.
It is a matter of fact that the previous Government were in negotiations with Mauritius over this issue. That was the case, and there will have been motivations for their doing that. I am worried about how our other overseas territories are being dragged into this. A couple of months ago, I was in Gibraltar with colleagues who privately told me they were horrified that party politics were being played with their communities. I am glad to see that Gibraltar’s Chief Minister was clear on the record that there was “no possible read across” to Gibraltar, and the Governor of the Falklands said that the
“historical contexts…are very different.”
I am confident that we meet the three tests.
Tim Roca
No, I am afraid that I will not.
In closing, I believe that the three tests have been met: the treaty meets our national security requirements, it has the backing of our allies, and it comes at a reasonable cost. It would be very dangerous for us to dither or delay any longer in view of the potential threat to that base.
Sir John Whittingdale (Maldon) (Con)
It is a pleasure to take part in the debate. The Foreign Affairs Committee, on which I sit—I welcome two of my Labour colleagues from the Committee and my hon. Friend the Member for Chester South and Eddisbury (Aphra Brandreth) to the debate—has had the opportunity to question the Minister, the hon. Member for Cardiff South and Penarth (Stephen Doughty), although I was not entirely persuaded by some of his answers. That is not to say that the Intelligence and Security Committee, which has other powers, is not an appropriate body for looking at some aspects—indeed, the Defence Committee should also do so.
The one thing that I think everybody agrees on is the importance of Diego Garcia and the Chagos islands to the United Kingdom. My right hon. Friend the Member for South West Wiltshire (Dr Murrison) quoted Admiral Lord West, his former boss—he was, of course, a Minister in the last Labour Government and the security adviser to the Prime Minister—who said:
“It is no exaggeration to say that Diego Garcia—the largest of the Chagos Islands—hosts the most strategically important US air and logistics base in the Indian Ocean and is vital to the defence of the UK and our allies.”
I have no doubt that Labour Members share that sentiment, but perhaps not his later comment, which was:
“An agreement with Mauritius to surrender sovereignty over the Chagos Islands threatens to undermine core British security interests, and those of key allies, most notably the United States.”
We do need to listen to the warning he gave.
Sir Julian Lewis
Admiral Lord West has been referred to twice so far in the debate. My right hon. Friend may be unaware that Admiral Lord West had a letter published in the national press on 28 May in which he talked about the
“disgraceful decision to hand over ownership of the Chagos archipelago”.
He added:
“I do not accept that the move is ‘absolutely vital for our defence and intelligence’, as the Prime Minister claims.”
I wonder what Government Back Benchers who have been slavishly reading their scripts make of that from someone of that calibre—a former director of Defence Intelligence.
Sir John Whittingdale
If I might just answer my hon. Friend before doing so. Admiral Lord West has immense experience and knowledge. If the Defence Committee should decide to look at this, it might well ask him to give evidence on the basis of his considerable experience in the area.
Sir John Whittingdale
I will come on to UNCLOS. As the hon. Member knows, it is an organisation that has expressed a view, but not one that is binding on the United Kingdom. My right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), the former Attorney General, set out very clearly the various international opinions that have been expressed but which are not binding or mandatory for the United Kingdom to follow. That is critical to this debate.
Sir John Whittingdale
I cannot answer the hon. Gentleman specifically on that issue, but I can tell him that it has been absolutely clear that whatever the UNCLOS opinion is, it is not binding on this country. We will read with interest its view, but it is not one that we are necessarily required to follow.
The existing position has safeguarded the interests of this country for a very long period, so the first question one is required to ask is: why are we changing a guaranteed security status for this country by handing over the sovereignty of Diego Garcia? As my right hon. and learned Friend the Member for Kenilworth and Southam has said, it is based on opinions that have been expressed but not ones that we are required to follow.
As the hon. Member for Crawley (Peter Lamb) said, I understand that the original linkage of the Chagos islands to Mauritius that took place was regarded as a matter of administrative convenience. However, they are actually 1,250 miles apart. On that basis, when the United Kingdom agreed to the independence of Mauritius, it was separated from the Chagos islands. There was no suggestion at that time that the two should be linked and that the islands be given over to Mauritius, which, despite the linkage, had no claim and no involvement in their running.
Alex Ballinger
Does the right hon. Gentleman, who is my colleague on the Foreign Affairs Committee, acknowledge that by opening negotiations with Mauritius, the last Government conceded that there was a point around sovereignty to be discussed and that, certainly from then onwards, it was difficult for this Government to roll back that point?
Sir John Whittingdale
It had already been rolled back. The hon. Gentleman is right that the last Government began discussions because Mauritius expressed a view. However, that was on the basis that a mutually beneficial arrangement could be reached. It was concluded that such an agreement could not be reached, and on that basis the last Government ceased the negotiations. It is not a question of their being rolled back; it was this Government who chose to reopen negotiations that had been closed down by the previous Government.
I come back to the international judgments. The other one cited by Ministers on the Government Front Bench early on in the discussion, when this issue was first raised, was the risk to access to electromagnetic spectrum as a result of the ITU potentially reaching a judgment that might be based on the non-binding judgment expressed by the ICJ. There is no actual evidence that it was going to do that, but it was possible that it might, and for that reason the Government expressed the view that this was important.
I would point out that the ITU has no ability to determine the use of spectrum. The Minister, in answering a written parliamentary question in February this year, made it clear that the allocation of spectrum was a matter for sovereign states. The ITU is a sort of gentleman’s club where everyone gets together to discuss these matters, but it is not able to hand over the right to the use of spectrum from one country to another. It is also worth noting that the ITU has, over the years, been subject to considerable pressure from China, which had a secretary general of the ITU. I recall from my time dealing with issues around the ITU the real concern about how the Chinese were seeking to use the ITU, so in my view it is a good thing that the ITU does not have the power to allocate spectrum.
There are also serious strategic concerns that the Government have not yet properly addressed. As has already been mentioned, an element of the agreement involves a requirement for us to “expeditiously inform” Mauritius of any armed attack on a third state directly emanating from the base. When the Minister gave evidence to the Committee, I pressed him on whether that would require advance notification—
The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
indicated assent.
Sir John Whittingdale
He is nodding. He gave me a very firm assurance that that was not the case. That is of some reassurance, but it does not go far enough. The fact that we are no longer able to carry out actions from our own base without then having to notify Mauritius, and presumably take note of any objection it has, represents a limitation that could well affect decisions as to where to deploy assets.
Sir John Whittingdale
I shall give way to my right hon. Friend, who is an expert on these matters.
Sir Julian Lewis
If this means that we do not have to inform Mauritius in advance of a direct armed attack from the base, presumably it means that we have to inform it as soon as possible after such an attack. If such an attack were an overt attack, Mauritius would presumably know about it already because everyone would have seen it, so this rather suggests that we might have to inform it if there had been some sort of covert attack that other people had not seen and that it would otherwise not know about. Is that a satisfactory situation?
Sir John Whittingdale
My right hon. Friend makes a fair point. A requirement for us to tell the Mauritians what has been happening from the base is exactly what might influence decisions as to its use for operations of the kind he describes. The Minister gave evidence to the Committee on this point just a few days, I think, after the Americans had launched their attack on Iran, which did not involve Diego Garcia. That was something I raised with the Minister.
Stephen Doughty
I know how seriously the right hon. Gentleman takes these issues, and it is important for the House to understand this. I can confirm what I said to him previously, but also I draw his attention to article 3(2)(b) in the treaty and to annex 1. Article 3(2)(b) sets out clearly that
“the Parties shall not undermine, prejudice or otherwise interfere with the long-term, secure and effective operation of the Base, and shall cooperate to that end; and…the United Kingdom shall have full responsibility for the defence and security of Diego Garcia.”
It sets out clearly our unrestricted ability to conduct the operations, including with the United States. That is very clear; it is in the treaty, and it is important that the House understands that.
Sir John Whittingdale
I understand that that is part of the treaty, but I hope that when the Minister winds up, he will address the point made by my right hon. Friend the Member for New Forest East (Sir Julian Lewis) that the requirement to “expeditiously inform” Mauritius, even after an operation, presumably means that we must do so as soon as possible, and that that will presumably apply to whatever kind of operation has taken place using the base. Perhaps he could tell us whether that might compromise decisions about the use of the base.
The other aspect I raised with the Minister when he was in front of the Committee was Mauritius being a signatory of the Pelindaba treaty. The Pelindaba treaty states that signatories will not have nuclear weapons on their soil. Britain, the UK, is not a signatory of it, but, as I say, Mauritius is. Again, the Minister told the Committee that there was no way in which anything in the agreement would affect the operational use of the base, but he would not go further and comment specifically on the aspects of potentially nuclear weapons on the Diego Garcia base. That is something of real concern, and I hope the Minister might say a little more about that conflict between his assurance and Mauritius’s membership of the Pelindaba treaty, which specifically says that there should not be nuclear weapons held on the sovereign territory of signatories.
I turn to the cost of the treaty to the UK. We are told that there is some disagreement about the precise figure. I have to say that even £3.5 billion seems pretty large to me, let alone £35 billion, which is universally believed on the Opposition side to be a more accurate figure. It has been suggested, nevertheless, that this is a relatively small amount of money and it is a good deal. I recall that when this was first suggested, a different Mauritian Government were in power. The Prime Minister of Mauritius at that time had signed a deal, which the current Prime Minister of Mauritius described as a terrible deal and that as soon as he was elected, he would reopen the whole discussion. It certainly appears that he was successful in doing so: the sum that has now been agreed is, the Mauritian Prime Minister has told us, considerably bigger than his predecessor had originally agreed, and this was a great success of the new Prime Minister of Mauritius that he managed to squeeze even more money out of the British Government. That does beg the question: at what point does it stop being a good deal? The impression given is that the British Government were so keen to sign up to this deal, they basically have signed away to almost any sum advanced by Mauritius. As one or two of my hon. Friends have made clear, that will be a difficult message to sell on the doorstep at a time when the Government are having to make significant savings and to raise taxes.
In particular, I am concerned—the Minister will understand why—about the impact on the Foreign Office budget, because the Foreign Office suffered the biggest cuts of any Whitehall Department in the last spending round. It is already unclear about how those savings will be met, and there is speculation that the budgets of the British Council or the World Service, or our representation in embassies around the world, will be reduced. Despite those pressures and potentially very damaging cuts to Foreign Office expenditure, the Foreign Office appears to be expected to meet part of this bill. The Minister was unable to tell the Committee how the bill would be divided up between the Foreign Office budget and the Ministry of Defence budget. Perhaps that is something else that he might say a little more about when he winds up.
I will also touch on the other aspect of the consequences of this deal: the impact on the environment, which has been referred to by one or two Members. I pay tribute to the Chair of the Foreign Affairs Committee, the right hon. Member for Islington South and Finsbury (Emily Thornberry), who is, I think it fair to say, engaged in other projects at the moment. She was assiduous in raising with the Minister her concern about the treaty’s impact on an incredibly important marine environment—that is recognised around the world. She wrote to the Minister, as he will be aware, and said:
“My principal concern is that there is now no funding mechanism in place to ensure Mauritius will properly resource marine protection in the Chagos Archipelago… Without any dedicated funding mechanism…there is nothing to ensure that this protection will continue other than the on-going willingness of the Mauritian Government to allocate resource”.
As has been observed, the archipelago is 1,250 miles away from Mauritius, and we are not entirely convinced that that willingness in Mauritius, on which the Government appear to be pinning their hopes, exists.
Finally, I wish to acknowledge the presence of the Chagossians in the Public Gallery. They have been very badly treated over years, and it is of concern to me that they appear to have had virtually no input in this agreement, and that there has been no consultation with them. I know that a contact group is being established in the Foreign Office, but there is some scepticism about whether it has ever met, and about how many staff will be allocated to it. Perhaps the Minister might give details in his reply. [Interruption.] I am pleased to hear him say that it met last week.
I am grateful to the Government for answering questions so far, but an awful lot remain, and the answers that I have heard have failed to convince me that this treaty is in the economic, strategic and environmental interests of this country or the Chagos islands.
Phil Brickell (Bolton West) (Lab)
It is a pleasure to speak in support of the Bill, which safeguards our national security and protects our constituents.
Diego Garcia is one of the most important military bases in the world. From that facility, Britain and the United States project stability across the Indian ocean, the Gulf and the wider Indo-Pacific. The base has been vital in the fight against terrorism and piracy for many years. Today, it is indispensable in containing the growing reach of the Chinese Communist party, as others have said. Beijing is building ports, airports and naval outposts right across the region; its so-called “string of pearls” is designed to encircle and dominate. If we are serious about standing up for the values that we hold dear—human rights, democracy and, at its heart, freedom—Diego Garcia must remain secure and undisputed, which can be achieved only through the treaty that the Government have concluded.
Conservative colleagues may huff and puff, as they have been doing ad nauseam over the past few hours, but let us not rewrite history. As has been pointed out, it was not Labour that opened negotiations with Mauritius.
Phil Brickell
I will make some progress, if I may. I wanted to intervene on Opposition Members earlier, but was not allowed to.
It was the Conservatives who rightly described the situation in 2022 as unsustainable, and it was they who held 11 rounds of talks on sovereignty. In 2023, when he was Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak) said that he wanted to conclude a deal soon. At the time, when they were in government, Conservative Members recognised that the base’s legal status was under serious threat, and that an interminable sovereignty dispute risked paralysing operations.
Let me make a quick point about international law. In reflecting on the ICJ advisory opinion, the right hon. Member for Witham (Priti Patel) said that it is an international court that few have heard of. Those kinds of reckless throwaway remarks undermine the United Nations’ highest judicial organ. She mentioned that we are a permanent member of the UN Security Council. There are judges sitting in the ICJ who are elected by members of the General Assembly, and through the Security Council. Although we have had judges sitting in that international court since its inception, we have not since 2018, which is a source of much shame for the country at large. I hope that she will take back those remarks denigrating the international system of law that underpins our international work. Let us not forget, after all, that in the 1940s, the United Kingdom was the first country to submit a case for arbitration by the ICJ. [Interruption.] I ask those Opposition Members who are chuntering: where were you when those 11 rounds of negotiations took place? I know that two years is a long time in politics, but have you already forgotten—
Madam Deputy Speaker (Caroline Nokes)
Order. I wasn’t anywhere, and I have forgotten nothing. Will Members please be careful about the language they use in the Chamber?
Phil Brickell
Thank you, Madam Deputy Speaker.
Labour has finished what the previous Government started—what was left to us after former Prime Minister Liz Truss let the genie out of the bottle in starting negotiations with Mauritius in 2022. That was reported, and much maligned, by Matthew Parris in The Spectator at the time—let us not forget that. This Government have sought to strike a deal in Britain’s best interests, given the legal mess that they inherited. Let us be clear: this agreement secures the future of the Diego Garcia base. Britain retains control of the base, as the Minister confirmed in response to my intervention near the start of the debate. There is a protective buffer zone, and no foreign security forces will be on the outer islands. There will be a robust mechanism to prevent interference, and for the first time, Mauritius has agreed back the base’s operations. That is a huge strategic win.
What about cost? Let us get this clear, because some of the disinformation coming from the Conservative party is concerning; it is unnecessarily setting hares running about the future of other British overseas territories, including the Falkland Islands and Gibraltar. The overall cost has not changed from that negotiated with the former Mauritian Prime Minister, and suggestions to the contrary are simply false. When set against the cost of inaction, the financial component is modest. It is far cheaper than the spiralling costs of legal uncertainty, and far cheaper than the price we would pay if Chinese expansionism went unchecked in the Indian ocean. For a fraction of our defence budget, we will secure a cornerstone of global stability. Let us not forget that the agreement will have an average annual cost that represents 0.008% of total Government spend, according to the Government Actuary’s Department.
Dr Pinkerton
Earlier in his very carefully crafted speech, the hon. Gentleman said that this deal protects freedom. One of the freedoms that citizens of the British overseas territories to which he referred most appreciate is the freedom to determine their own future. Why does he think that Chagossians should be made an exception and denied the right to determine their own future?
Phil Brickell
I am sure that the Minister will come to that in his closing remarks. I have to concur with other Members that the way the Chagossians were treated in the ’60s and ’70s was utterly shameful. I am proud that there will be rights of return, and the ability to visit.
Conservative Members claim to be the champions of defence, but that is not borne out by the facts, which include an 18% cut in defence spending in their first five years in government, and their shrinking the Army to its smallest size since the Napoleonic era. In how many years out of 14 was the target of 2.5% of GDP spent on defence hit? Zero. They should not lecture Labour Members on national security. The Government’s plan is straightforward, transparent and serious. We have the largest increase in the defence budget since the cold war; we are rebuilding alliances that previous Governments wantonly vandalised; we are acting where there was dither; we are governing in the national interest; and, importantly, we are securing the long-term future of the Diego Garcia base.
It is clear that a binding adverse judgment against the UK was inevitable. Since 2015, 28 international judges have expressed views on Chagos sovereignty. That was under the previous Government, and not one of those 28 judges backed Britain’s claim. Without an agreement, our ability to operate the base would have been compromised. Overflight clearances would have been at risk, contractor access would have been uncertain, communications would have degraded, costs would have soared, and investment would have fallen. Who would that benefit? I put that to Conservative Members, but I will give them a clue: it is not Britain, and not Britain’s allies. This deal secures Diego Garcia, cements our role in the Indo-Pacific, strengthens our ability to push back against Chinese influence, and shows that Britain is a dependable ally that takes national security seriously.
I wish to make a closing remark on the reasoned amendment by the Reform party, in the names of the hon. Members for Clacton (Nigel Farage), for Boston and Skegness (Richard Tice), for Runcorn and Helsby (Sarah Pochin) and for Ashfield (Lee Anderson), who seem not to be present. I will read out a part of it that I am gobsmacked nobody has picked up on in this debate:
“because the reason for the UK-Mauritius Treaty and for bringing forward this Bill follows a judgment from the International Criminal Court, from which the UK does not recognise judgments as binding, only advisory”,
they will oppose this Bill. I want Reform to answer: which case before the International Criminal Court is it referring to? Is Reform suggesting that, were it to come to power, it would not recognise the binding judgments of the International Criminal Court? Will it take us out of the ICC? Unfortunately, Reform Members are not here to respond.
The Conservatives opened the door to this treaty. Labour inherited a legal mess, but it has delivered a deal in the long-term national interest. For a small cost, we have achieved a huge strategic win. That is why I am proud to support this Bill, and I will vote with the Government tonight.
Tom Tugendhat (Tonbridge) (Con)
So many Labour Members seem to have forgotten that the reshuffle was a couple of days ago. They will have to wait another few months, possibly years, for their obsequiousness to be rewarded.
May I suggest that we are in a somewhat through-the-looking-glass world? Over the last few hours, we have heard very clear questions from my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), who is no longer in his place. He explained that we are hearing a circular argument about legal intervention to which there is absolutely no response. All we hear from Government Members is ChatGPT-generated press releases—“I rise to speak”, “I rise to speak”, “I rise to speak”. ChatGPT knows you are there. That is an Americanism that we do not use. Still, they should keep using it, because it makes it clear that this place has become absurd.
This building and this Chamber are a complete waste of time when our electors and fellow citizens hear that we have listened to the arguments of Mauritius, China, India and the United States, but are not willing to listen to the arguments of Britain. We are not willing to stand up for the interests of the British people, or to look at the strategic interests of UK defence. Instead, all we hear consistently is that the Americans are for the deal. Of course they are for it; this is a territorial deal, and they have no interest in the territory. All they are interested in is the lease of the base. They are leasing the base off us at the moment, and they will be leasing the base off Mauritius via us into the future, so there is no change for them.
Of course, India is in favour of the deal. By the way, I respect the position of the Indian Government greatly, but do you know what? I am not an Indian MP. I have a different perspective, because my job—and, I thought, the job of Labour Members, but clearly I was wrong—is to stand up for the British people. Instead, all I hear is that Labour Members are standing up for the interests of different foreign powers. That is absolutely fine. They worship international treaties and stand up for so-called international law, but they conveniently forget—[Interruption.] Members should hear the end of the sentence. They forget that international law is conflictual, challenged and regularly, if not almost always, in direct confrontation with itself, because it highlights different interests. At different points, Governments champion different aspects of international law in order to seek different outcomes. That is how it has grown up. It is the job of sovereign Governments to stand up for our interests. I thought that was the job of our Government, but it clearly is not the job of this Government. Instead, this Government do something quite different; the moment that they are challenged, they run away. Brave Sir Keir bravely turned his tail and fled.
Madam Deputy Speaker (Caroline Nokes)
Order. This debate has to be fair on both sides. I will not have Members referring to the Prime Minister by name.
Tom Tugendhat
It could have been any Sir Keir —there are so many of them. I apologise, Madam Deputy Speaker.
This Government have decided that instead of fighting for Britain’s interests, all they will do is turn around and capitulate.
Tom Tugendhat
I will not. The problem is that this case is not just about these islands, or the issues we are debating today; it is about the way in which Governments approach these debates.
Just in case we are in any doubt about the changed nature of the use of law against us, it is worth looking at the timeline of these events—which is completely coincidental. We know, because colleagues have mentioned it, that in the 1960s a deal was done, a payment was made, Mauritius accepted it and we moved on. Just after the Falklands war, a legal action was begun, using Mauritius and extending a claim. Just after the Falklands war, the KGB started to fund the Campaign for Nuclear Disarmament. By the way, it is not me saying this—it is in the Mitrokhin archive; it is all public. Just after the Falklands war, when the Soviets realised that they did not have the military power to defeat NATO, they started experimenting with lawfare, and we have seen them do it again and again. If Members would like to read reports on this issue, Policy Exchange very kindly published a report by me in 2013, and another one in 2015—“Fog of Law” and “Clearing the Fog of Law”, for those who have trouble sleeping.
Since then, we have seen lawfare grow. We have seen states using the power of lawyers against the interests of the British people time and again, and the trouble with the capitulation we are seeing today is that it is not just about Diego Garcia, these islands or this interest; it is about the question of whether or not this Government will stand up for the British people, and for our security and our interests. Let me sketch out a hypothetical situation for you, Madam Deputy Speaker. It is possible, although I hope it is not necessary, that British troops will be asked to do some peacekeeping in somewhere like Ukraine. It is possible that they will have to leave at a moment’s notice with the equipment they have, without the ability to re-equip—simply to go with the best that they have. It is possible that countries like Russia will object.
We know, because we have seen it happen in the late 1990s and all the way through the 2010s and 2020s, that the Russian Government and others have encouraged legal action against our armed forces. To be honest, Governments have been poor on this issue since 1999—Labour Governments initially, and then Conservative Governments—so it was very welcome that Lord Cameron stopped this, recognising that a different position could be taken. Sadly, this Bill reverses that position. It reverses the presumption that our Government, the British Government, will represent the legal interests of the British people and fight these cases. Instead, they will capitulate. The problem is that capitulation is what got us into this problem in the first place. We can look at the Bici case in Kosovo in the late 1990s, where we settled rather than fought, or at cases in Iraq and Afghanistan, where we settled rather than debated—rather than going to court and seeking a judgment. Those cases created precedents, and I am afraid that this Government are creating another precedent.
I know that the Minister will say that the Governments of the Falkland Islands, Gibraltar, and many other places have correctly said that this case has no connection to them. I am delighted that they have said so, and they are right, but they are sadly mistaken in thinking that that means nobody will test that point.
Tom Tugendhat
Had the hon. Gentleman been in the Chamber at the beginning of the debate, he would have been welcome to contribute, but given that he has such a passing interest, I am sure he will not mind if I carry on.
The reality is that it is not up to the person who is pursued by law as to whether they will be challenged; it is up to the aggressor, and we know who the aggressor is. We know who has been using lawfare against us. We have seen it time and again, and I am afraid that the effect of this Bill is to concede that point. I am fascinated that so many Government Members feel that they had no choice but to conclude the negotiation. Admittedly it was begun mistakenly by a Conservative Administration and, yes, I did write to the then Prime Ministers—both of them—complaining about it and pointing out the error of their ways. I was a Minister, and I wrote about it and complained about it, as did Lord Murray of Blidworth—I think that is right. I am going to get his name wrong, forgive me—that is one for Hansard. We both wrote, because we both thought it was wrong at the time.
What can I say? We left office. The civil servants re-presented the same offer and sadly, here we go again. The British people feel so disenchanted at the moment because we see changes of Government and no changes of policy. We simply see a continuation and the Whips’ briefings coming out again. We simply see the pointlessness of democracy in this place, because we might as well not bother being here. The Foreign Office stitched this one up. The Minister cannot even change the judgment, and he has sacrificed everything on the whims of an international process with no regard to the interests of the British people.
Alex Ballinger (Halesowen) (Lab)
I thank the Minister for his speech earlier, although he is no longer in this place. We have heard clearly from those on the Opposition Benches that they are opposed to this deal, so it is first worth outlining what sort of deal they are opposed to. They are opposed to a deal that secures our vital national interest on probably the most important base in the country’s history in the Indian ocean. They are opposed to a deal that is supported by every one of our Five Eyes closest security partners. As we have heard from many of them, they are opposed to a deal that they spent 11 rounds negotiating over two years, and we have not quite heard from them why they started negotiating that deal in the first place. They spent 11 rounds negotiating it, but they have not yet told us—the shadow Minister or otherwise—why they felt it was necessary and why they think this Government might have come to the same conclusion as they did at that time. I believe, as many of us do on the Government Benches, that that dangerous rhetoric puts the security of our base in Diego Garcia at risk. It is playing politics with our national security.
I want to take us back in history for one moment to look at a similar situation. During the second world war, the UK established another airfield in the Indian ocean known as RAF Gan. RAF Gan was the southernmost island in the Maldives, and it was secured in 1942 by the Royal Navy, and then taken over by the Air Force, to secure our operations all across the Indian ocean into the far east, combating the Japanese threat we were facing there. It was such a successful base that the Japanese did not even discover its existence until close to the end of the war, once their expansion plans had ended. Later, in the cold war, it became a vital staging post for the UK and our allies to get our forces across to Singapore and other bases in the far east. In fact, my father served there in 1974, and it was a great shame that two years later we closed that base and handed it over to the Maldivian Government at the same time that we secured our base in Diego Garcia.
I mention that case in particular because it was a vital strategic secure base of ours in a similar situation to Diego Garcia. As soon as the Maldivian Government took possession of that base, the Russians began to exert influence to try to take it over. They were attempting to take over the base that we occupied—that we spent decades developing—and turn it into a secure base for the Soviet Union. They are doing exactly the same thing again on Diego Garcia. They are trying to influence the Mauritian Government to claim the base for their own use.
Dr Evans
Is this not the point that we have heard time and again from Government Members? This deal runs out in 99 years, and at that point Mauritius can simply close the base or hand it on to the biggest offer. We get first rights on it, but if the Chinese decide to invest hundreds of billions, we may not be able to match that. We are over a barrel. In 100 years’ time, people will be in this place having this exact debate saying, “How do we solve this problem?” Is the hon. Member as concerned about that as I am?
Alex Ballinger
I go back to the example of RAF Gan. The Maldivians refused the Soviet Union back in 1976, because the UK had a good reputation with them. We honoured our agreements and respected international law, and they felt that it was inappropriate for them to be seen to be supporting a country that had not done the same.
In the case of Diego Garcia, this is a situation that has been negotiated for many years. The Conservatives recognised that there was a threat to our sovereignty, because they started the negotiations. As we have heard from my hon. Friends, if we are unable to conclude a deal soon, there is a serious risk that our operations at the base would be thwarted. It would not be in 99 or 140 years after the deal; it would be in weeks or months.
Alex Ballinger
I will carry on for a moment, and then I will give way.
Despite the risks, the Conservatives have come out in opposition to this deal. The right hon. Member for Braintree (Sir James Cleverly)—the former Foreign Secretary, who is not in his place—has described the deal as “weak, weak, weak”, but it was he who started the negotiations back in 2023. He pledged that he would complete the deal in the same year, but he was unable to do so. Maybe it was his negotiating tactics that were “weak, weak, weak”, rather than anything else. For all the Conservatives’ complaining about this agreement, they have failed again to offer any insight into why they started the negotiations in the first place.
Sir John Hayes
The hon. Gentleman is right. Questions about why the negotiations started have been raised by my right hon. Friend the Member for Tonbridge (Tom Tugendhat), given that the national interest is the primary concern of all responsible Governments and could easily be compromised by this deal, but will the hon. Gentleman deal with this point? It has been made absolutely crystal clear in this debate that Lord Cameron, when he became Foreign Secretary, ended those negotiations. Lord Cameron is a man of immense experience, who has probably negotiated at a level beyond anyone present in this Chamber. He would have certainly taken legal advice within the Foreign, Commonwealth and Development Office before he closed those negotiations. Why does the hon. Gentleman think that Lord Cameron closed them down, and why does he think that this Government reopened them?
Alex Ballinger
We do not know why Lord Cameron closed them down, because the Conservatives have not released any details of the deal that they negotiated up to that point. Maybe the costs were too high because they had not negotiated a better deal, or maybe things like the 24-mile security zone were not included in the deal, but this Government have secured a better deal. It is important for us to secure our national security.
It is also worth pointing out that Conservative Governments have not looked after our national security over the last 14 years. I have served, and I have seen the damage that was caused by 14 years of under-investment and neglect of our armed forces. Our Army has been reduced to a size that has not been seen since the time of Napoleon. Service accommodation standards are scandalous, which our people do not deserve in the slightest, and the Conservatives cut the defence budget so deep that Russia felt that we were too weak to stop an invasion in Europe. I am pleased to see that this Labour Government are investing again in our armed forces and starting to fix the damage of those 14 years.
Since we are talking about investment, let me touch on the investment value of this deal. Diego Garcia’s location—far from major population centres—makes it the ultimate secure base. It is a deepwater port in a key staging area in the Indian ocean, and is vital for our submarine operations. It contains the longest runway in the entire Indian ocean, putting our aircraft in reach of Africa, the middle east and east Asia. In order to continue the operation of such a base for 99 years, we are looking at an average cost of £101 million a year. That is around 0.2% of our defence budget—less than the cost of a single aircraft carrier. As we heard from my hon. Friends, it is a better deal than the French have achieved in Djibouti for a base that is right next to the Chinese operations, and has a total cost that is less than the amount of money that the last Government wasted on faulty PPE during the pandemic.
Diego Garcia is vital for our national security—I think everybody in this place agrees with that. Two years ago, the Conservatives also agreed on the need for a deal.
Lincoln Jopp
I am grateful to the hon. and gallant Member for giving way. On the pricing, he said that Government Front Benchers are putting it out that this is a good deal. Would it still be a good deal if it was £35 billion or something like that?
Alex Ballinger
As the hon. Member will know, the official Government statistics say the cost is £3.5 billion, which is about 0.2% of our defence budget. I wonder what other assets in the entire world that may be worth 0.2% of our defence budget are quite as effective and important as Diego Garcia.
I will come to my conclusion. The last Government wanted a deal. They started negotiating a deal and conducted 11 rounds of negotiations on a deal. Now, however, because they think that they can score some political points, they are choosing to side with our adversaries. I humbly suggest that if they really had the UK’s national security in mind, they would agree with what the US State Department told the Foreign Affairs Committee on our recent visit to Washington, and some of the Conservative Committee members were in that meeting. The US State Department told us, “Thank you for securing this deal, which we think is vital for both our nations’ security.”
Rebecca Paul (Reigate) (Con)
It is a privilege to speak in this debate, particularly following some of the incredibly insightful speeches, certainly on the Opposition side of the House.
Today is a hugely consequential day. The House is not being asked to debate in abstract, and neither are we considering ordinary legislation that can be repealed should its effect turn out to be unfavourable. We are being asked to endorse the permanent and irrevocable surrender of British sovereign territory. There is no way back from this, and I cannot support such action. My opposition is shared by Members on this side of the House and, I suspect, by more Labour Members than may be prepared to say so publicly.
We have heard the point before, but it bears repeating: the British Indian Ocean Territory is of immense military, security and geopolitical importance, and this Bill will give it away forever. It does so at a time of heightened instability and threat around the world. It does not take an expert on defence or foreign affairs to know that this is a terrible decision. It is one that puts virtue signalling before the national interest, plays into the hands of our enemies and ultimately puts this country and our citizens at risk, which is unforgiveable of any Government.
If what we are presented with today is indeed to be the final settlement of the issue, it is a settlement that satisfies neither the strategic nor the political doubts that have been raised. My first concern is the implications of this handover for our defence and security. For decades, Diego Garcia has played a critical role in the collective security of the United Kingdom, the United States and our broader network of allies in the region. The base serves as a launchpad to defeat our enemies, to prevent threats to our nation and to protect our economic security. It directly contributes to Britain’s strength at home and abroad.
In practice, the facility, known as Naval Support Facility Diego Garcia, fulfils multiple essential military roles. It supports approximately 15 key military tasks, including logistics, communications and intelligence gathering. The base acts as a prepositioning hub, hosting vessels carrying armoured vehicles, munitions, fuel and even mobile field hospitals for rapid deployment to wherever they are needed. It is equipped with a deep-water port capable of docking nuclear submarines and naval vessels, as well as runways accommodating strategic bombers, aerial refuelling operations and pre-launch operations across the Indian ocean.
Diego Garcia remains indispensable, but we are now being asked to jeopardise it. In truth, Parliament has been shown nothing of real substance that addresses the concerns that have been raised by Conservative Members. This House is being asked to vote blindfolded on the future of one of our most strategically important overseas territories.
This matters because, despite what Ministers seem to have convinced themselves to be true, the Republic of Mauritius is far from being a passive actor in the geopolitics of the region. Mauritius has repeatedly aligned itself with states hostile to our own strategic interests. It voted against the UK in the UN General Assembly and the International Court of Justice over the future of the Chagos islands in the first place. It maintains close diplomatic and economic ties with China, and China’s use of slave labour and expansionist agenda against Taiwan are well documented. More to the point, Mauritius has signed up to the global security initiative proposed by Beijing, which has been described by many regional experts as China’s attempt to displace US-led security partnerships. These concerns have repeatedly been brushed aside by Ministers keen to remind us that Mauritius is in fact an ally of New Delhi, not Beijing.
Sir John Hayes
The critical point here is that national security and the national interest are inseparable. Both depend on the sovereignty of this nation and the primacy of this Parliament, so although international treaties and agreements matter, of course, they can never matter more than that primacy. We cannot subcontract the national interest to an overseas place that in years to come might want to defend that interest, or might not, in exactly the way that my hon. Friend is describing.
Rebecca Paul
As always, my right hon. Friend makes his point well, and I completely agree.
The reality is that Mauritius is not a reliable or neutral guarantor of our security interests, and it is staggeringly naive for Ministers to suggest otherwise. To put it plainly, if the transfer proceeds, there can be no guarantee that our interests will be protected. As has already been raised multiple times, what will happen in 99 years is of significant concern.
On top of all that, we are not just giving away one of the centrepieces of our global security posture, but paying extortionately for the privilege. Hard-working taxpayers—my constituents—will be left footing the bill for the next 99 years, paying £35 billion or perhaps £47 billion for the lease that the Government have agreed. In Britian, we have faced cruel cuts, harmful tax rises and economic gloom under this Government. By contrast, the Mauritian Government have now begun celebrating their shrinking national debt and announcing a series of planned tax cuts, all as a result of the billions that we will send them.
Countries have lost wars and gone on to be offered treaties with more generous terms than this one, yet those on the Government Front Bench come to this House and call the deal a triumph. The UK will be weaker and poorer as a result, and it is shameful that the Government have brought such a damaging, insulting and senseless document to this House. By moving forward with this, the Government are failing in their first duty to ensure the safety and security of our citizens and nation. This day will go down in the history books as the day that the United Kingdom was diminished by dangerous fools.
Sarah Smith (Hyndburn) (Lab)
Diego Garcia is not just another military facility; it is the cornerstone of Britain’s national security and our most important contribution to the UK-US security relationship. From tracking terrorist networks to ensuring freedom of navigation and global trade, the base has saved lives and safeguarded our people. Let us be clear, however, that the reason we are here today is the failures of the Conservative Government on defence and foreign policy. For years, they dithered, delayed and mismanaged. They gambled with a capability that no other site on earth can replicate and with our security. Some 85% of the negotiations that delivered the treaty took place under the Conservatives.
The right hon. Member for Braintree (Sir James Cleverly), then Foreign Secretary, launched the process and the right hon. Member for North West Essex (Mrs Badenoch), now the Leader of the Opposition, sat at the Cabinet table, received the same security briefings and never raised objections—not in Parliament, in written questions or on social media. They knew then, as we know now, that without a treaty Diego Garcia was at risk of being made inoperable. They knew the dangers of hostile powers exploiting the vacuum and of our ability to berth submarines and patrol the region being fatally compromised.
Today, however, the Opposition have been unable to answer the basic question of why they started the negotiations. They tried to present the argument that they stopped the negotiations, yet in April 2024 Lord Cameron wrote to the hon. Member for Rutland and Stamford (Alicia Kearns) to say that
“the future administration of the islands”
was
“subject to ongoing bilateral negotiations”.
Shortly following that, there was a general election. In opposition, those same people posture against a deal that they once championed. They offer no alternative—no plan, no strategy; just opportunism. They play politics with the safety of the British people. That is not leadership; it is pure hypocrisy.
By contrast, the Labour Government have delivered a treaty that secures 99 years of guaranteed access, with the option of extending it for another 40 years. We have secured rock-solid safeguards: full UK control over the base, command of the electromagnetic spectrum, a 24-nautical-mile buffer zone to protect operations and a ban on any foreign military presence in the wider archipelago.
Crucially, the treaty is backed by our allies. The United States welcomes it, with President Trump calling it a
“very long term, powerful lease”.
Our Five Eyes partners, as well as India, all back it, because they recognise what the Conservatives once admitted but now deny: it is irreplaceable.
We must also address the position taken by Reform UK, whose Members have all vacated the Chamber for the debate that they proclaim to be so important. The hon. Member for Clacton (Nigel Farage) and his colleagues loudly claimed that the United States would reject the agreement, and they told the British people that President Trump would oppose it outright, but they were embarrassingly wrong. The United States has welcomed the deal and President Trump has said that it is “very strong” and “very long term”. Once again, Reform UK misread our closest ally and talked Britain down. Parading as patriots, their instincts are to undermine alliances and weaken the very partnerships that keep this country safe.
Let us be clear that, when put in context, the costs are modest and represent less than 0.2% of the annual defence budget. To put them into greater context, the cost of the whole deal is less than the cost of the unused PPE in the first year of covid under the Tory Government. The Conservative party had 14 years in Government to get this right, but it instead wasted billions of pounds on defence mismanagement while leaving the future of our most critical base to hang by a thread. This Labour Government have secured it for a century, protected our people, supported the Chagossian community and strengthened Britain’s alliances.
To oppose the Bill is to abandon the base, and to abandon the base is to abandon Britain’s security. I will not do that. I urge all Members to support the Bill and to put the safety of the British people above the short-term games of a divided Opposition and the reckless posturing of Reform UK.
Aphra Brandreth (Chester South and Eddisbury) (Con)
At the start of this Parliament, I could not have imagined that we would be asked to consider a Bill that is so uniquely detrimental to our national security, the British taxpayer, the British Chagossian people and the environment. Not only are we ceding sovereignty of a critical overseas territory, but we are paying a huge financial cost for the privilege of doing so. We have heard much today about the cost of this deal—a cost that the Government claim is £3.4 billion over 99 years, but in reality it is many times greater.
This deal is unique: it will leave the UK strategically weaker in one of the most contested regions of the world, which is likely to shape the future direction of geopolitics, at a time when the world is more volatile than ever, with 2024 seeing the greatest number of conflicts around the globe since the second world war.
Allow me to start with the finances of the deal. It took a freedom of information request for this Government to level with the British people that this deal would in fact cost £35 billion, with some analysis even suggesting it could be as much as £47 billion. It would have been far better for the Government to have come clean over the true cost of the Chagos deal, rather than trying accountancy tricks to pull the wool over our eyes.
I would like to put into context the sheer scale of £35 billion of taxpayers’ money: it could be used to pay for 10 Queen Elizabeth-class aircraft carriers; it is over half the annual schools budget; it is the estimated cost of the entire Hinckley Point C nuclear reactor project; it would pay for 70 hospitals, or a 5% cut on income tax—the list could go on and on. We knew this anyway, but it is worth reiterating that when the Prime Minister negotiates, Britain loses.
The hard-working people of Chester South and Eddisbury deserve a better return for the tax they pay, and they ought not to have to watch as this Government sign away British sovereign territory. Adding to that, the omission from the Bill of a money authorisation clause, removing Parliament’s ability to vote on sending billions of pounds to Mauritius, is completely wrong.
That leads me to the strategic implications of the Bill. The Diego Garcia base is one of seven permanent points of presence within the Indo-Pacific region. Owing to its position in the middle of the Indian ocean and proximity to shipping lanes, it is vital for our national security and regional influence. It is a key base from which our armed forces can protect us from hostile states and non-state actors and activity. From a security standpoint, it is deeply concerning that we are losing sovereignty over this base and the influence that we could exert from it.
According to the treaty, the UK is compelled to notify the Mauritian Government on certain aspects of military activity in and around the base. This does not make us safer. Think back to earlier this year when our American allies conducted strikes against Iran. What if the UK were to support our allies in such action? This deal would require, as we have heard, for us to expeditiously inform the Mauritian Government of our actions. I appreciate that the Minister has clarified that no advanced notification is required, although one might ask why we should have to inform Mauritius at all, expeditiously or not. Perhaps the Minister can clarify whether the provisions under annex 1, paragraph 2 also extend to special forces operations, and, if so, what guarantee there would be that highly sensitive security information would not end up in the hands of our adversaries.
China, Iran and Russia have all welcomed the deal. As the shadow Minister highlighted, the Chinese ambassador to Mauritius congratulated the Government of Mauritius and the Deputy Prime Minister in a press conference following the deal’s announcement, thanking China for its support throughout the process. China does not do geopolitical favours, so its support should cause the Government to pause and reflect. Iran has also welcomed the deal and we know that it is forging closer ties with Russia, so perhaps in his closing remarks the Minister can share with the House how Ministers have somehow come to a different conclusion and deduced instead that all three of those geopolitical threats are opposed to the deal.
But it is not just the huge financial cost or the significant security implications of the deal that are deeply concerning, but that it has ignored the voices of British Chagossians. In June this year, I met people from the Chagossian community who came to Parliament to speak with MPs. Their message was very clear: they feel let down by a lack of transparency and consultation, and are deeply uncertain about their future. It is not surprising that they feel ignored and betrayed, given that the former Foreign Secretary met them only once—once—on a deal that is so significant for them.
The Government must put that right and take the opportunity to implement a recommendation put forward by the House of Lords International Relations and Defence Committee and International Agreements Committee, outlined in the report that looked at the treaty. They urged the Government to
“Enhance Chagossian engagement by establishing a formal consultation mechanism with the Chagossian community to monitor the Agreement’s implementation and ensure their meaningful inclusion in decision-making.”
Will the Minister confirm whether that recommendation has been implemented?
The deal provides British Chagossians with no guaranteed rights of return to their homeland. I therefore ask the Minister to state clearly whether the Government have negotiated an agreement in which British Chagossians’ rights to visit the Chagos islands are left entirely in the hands of Mauritius, and whether it is feasible that they may be refused the right to return or even visit. That would be wholly unacceptable.
Further, the Chagos trust fund, established as part of the UK-Mauritius treaty and financed by the UK, is to be distributed solely under the control of Mauritius, yet the Bill contains no provisions to monitor whether the rights of British Chagossians are upheld or to create any statutory oversight of the trust fund. Have Ministers secured from the Government of Mauritius any firm commitment that British Chagossians will have a formal role in the oversight and decision making regarding the fund? Indeed, why was a model of joint governance not agreed, ensuring that British Chagossians themselves have a voice in how the fund is governed and can benefit directly from it?
Added to all this, the deal currently risks leaving a pristine marine environment unprotected. The waters around the Chagos islands are home to 220 species of coral, 855 species of fish and 355 species of molluscs. These waters have been fully protected since 2010 by the UK Government. Although it is welcome that there is a commitment to continue with a marine protected area, we do not know what levels of support Mauritius will put into the MPA. Indeed, there are real concerns that the Mauritian Government do not have the capabilities to monitor, enforce and protect these waters, with no assurance that there will be no fishing and trawling in them.
From the eye-watering costs to the grave security risks, the betrayal of British Chagossians and the environmental damage this treaty risks unleashing, this is a uniquely bad deal. It asks us to pay more, risk more and gain nothing in return. For the sake of our national interest and our duty to the Chagossian people, I cannot support this Bill.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
I rise today not to upset a Speaker or Deputy Speaker—let us see how this goes, Madam Deputy Speaker.
Mr Bailey
Thank you, Madam Deputy Speaker.
I am proud to speak in favour of the Bill. I do so as a proud former member of our armed forces, having devoted 24 years of my life in uniform to the safety and security of this nation, particularly in intelligence gathering, where UNCLOS is a tool of the trade. That experience shapes my view of the Bill. I find it rich to hear lectures on national security or faux patriotism from the right hon. Member for Witham (Priti Patel), whose party spent 14 years hollowing out our armed forces.
The Bill exemplifies the forward-looking, effective and patriotic approach that this Government have taken to our security and our place in the world. It is a major achievement to be implementing an agreement that will ensure that our base on Diego Garcia can operate securely in conjunction with our allies—notably the US—until at least 2124.
Mr Calvin Bailey
Not yet.
Allied naval, aviation and communications assets will be able to protect UK interests across a vast area of the western Indian ocean and beyond throughout the next century, no matter the change, turmoil or insecurity that the coming decades may bring.
The agreement provides the UK and our allies with the freedom of action necessary to guarantee the security of the base. This is detailed in a great many ways by the treaty, but I will highlight just three. First, we will have joint control over the electromagnetic spectrum communications and electronic systems. Secondly, we will have joint control over whether any security forces—military or civilian—will be permitted, except for our own and those of the United States and Mauritius. Finally, we will have joint control over any land development and any construction of sensors, structures or installations at sea. These are very broad and flexible rights; they apply not just to Diego Garcia, the 12-mile boundary within which territorial sovereignty extends or the 24-mile boundary surrounding it, but to the entire Chagos archipelago of 247,000 square miles.
What the Opposition have missed is that it is not what UNCLOS precludes but what it allows that is the threat. When it comes to the activities of third parties, control will be joint between the UK and Mauritius. This joint control will give us the ability to veto decisions if, after engaging fully with our Mauritian partners through the joint commission, we are ultimately unsatisfied about the security risks in a way that we cannot now. Within 12 miles of Diego Garcia, our control will be unrestricted, not joint; the same will apply to our rights, and those of US forces, to access Diego Garcia by air and sea. This will deliver the control that our armed forces need to keep the base secure over the decades to come.
In achieving the agreement, we have bolstered our relationships with key allies and partners, including India, as I will come to later, but first and foremost with the United States. It is a shame that the right hon. Member for Tonbridge (Tom Tugendhat) has left the Chamber, because I have some questions for him.
We need to be clear about the games that Opposition parties have been playing over this issue. Reform and the Conservatives have attempted to undermine this agreement at every stage, damaging UK interests and trying to drive a wedge between the UK and our allies. We saw the same approach from the hon. Member for Clacton (Nigel Farage) in his anti-UK PR campaign on Capitol Hill last week, and I note that I can see none of the Reform party present.
As I have told this House from personal and professional experience, the United States military and its allies value written agreements and long-term guarantees. Our allies rely on the same kind of lease agreements to underwrite their own bases, so they see that this model can stand the test of time despite huge geopolitical shifts, and all of us can see that too.
The right hon. Member for Tonbridge said that we should save the base for our unilateral action, but he did not once explain how we would pay for operating and maintaining a base unilaterally. Instead of recognising the benefit of these negotiations, as a way to bolster our cross-Atlantic alliances and increase the value of our contribution to Indo-Pacific security, the Conservatives have repeatedly tried to undermine the process that they themselves started. Thankfully, they have failed. Our international partners have welcomed this agreement, and it now falls to us to ensure that the necessary changes are made in law so that the treaty can come into force and we do not let down our allies.
By far the strongest international advocate for this treaty is India. India is, as we know, an utterly indispensable partner in ensuring that the region remains free and open for navigation and UK trade. India is already a geopolitical force to be reckoned with, and her power and importance as a balancer preventing Chinese domination will only grow over the decades to come. The continuation of the UK and US forces on Diego Garcia, while resolving the question of sovereignty, aligns our strategic interest more strongly with India’s and helps to counter anti-UK rhetoric from the likes of Russia, which can still have influence by playing on the legacy of the anti-colonial struggle. The Conservatives conceded that by starting negotiations about sovereignty. I have asked them all repeatedly about that, and not one of you—
Madam Deputy Speaker
Order. You were so close to succeeding. Let us try to get the language right.
Mr Bailey
I did not receive a single response from any of them, Madam Deputy Speaker.
I have mentioned colonial history, which is going to get some Conservative Members very excited and make them want to use patriotic-sounding rhetoric about the concept of sovereignty, which, as I have just explained, they do not themselves understand. I will take the issue head on. The simple fact is that despite its name, the British Indian Ocean Territory has never been British in the way that Gibraltar and the Falkland Islands are. It has never had a resident population who were British and said with one voice that they wanted to remain so. Perhaps the Chagos islanders could have had such a population if history had gone differently, but they were robbed of that opportunity when the territory was created.
I welcome the apology from the Minister earlier, and I was grateful to hear my hon. Friend the Member for Crawley (Peter Lamb) speak so powerfully about this matter. I look forward to hearing the Minister’s response shortly. Sadly, we cannot turn back the clock. What we can do is what we are doing: giving the Chagos islanders a pathway to permanent citizenship and integration here if they choose it, while supporting resettlement options within the agreement reached with Mauritius.
The absurdity of making a big song and dance about sovereignty is reflected in one simple fact. As the explanatory notes to the Bill point out, the UK has always committed to returning the islands to Mauritian sovereignty when they were
“no longer needed for defence purposes.”
That was part and parcel of the decisions made when the British Indian Ocean Territory was created. All that is happening through the treaty and the Bill is the creation of a more secure and durable solution that safeguards those defence purposes; and we are making good on our promise that the UK’s sovereignty would be continued only temporarily, not forever.
When the flag of the British Indian Ocean Territory—the flag of a tarnished endeavour—is lowered on Diego Garcia, the Union flag will be raised in its place: the flag of a modern, forward-looking nation of which Government Members are proud. By passing the Bill, we will not only address the growing vulnerability of a vital military asset, but entrench our alliances and our position in the Indo-Pacific, furthering Britain’s interests across the world.
Jeremy Corbyn (Islington North) (Ind)
I am pleased to be able to say something in the debate. The points made about the history of this really need to be amplified a bit more. It was a disgraceful deal, done in 1965 by the then Labour Government, that created BIOT and led us on the pathway to expelling the Chagos islanders from both Diego Garcia and the wider archipelago. That was done when Mauritius was still a British colony, and the US was putting on a lot of pressure to get a base to fuel the Vietnam war. That was the context in which the deal was done.
The treatment of the Chagos islanders, which has been written about extensively by some brilliant writers, was unbelievably brutal. They were dragged out of their homes, put on boats, and sent to either Seychelles or Mauritius with no rights, no acknowledgment and no real support whatsoever. They lived for a long time in poverty in both those places. Former Members of the House who have sadly passed on did quite a lot to try to support them. The late Tam Dalyell, former MP for Linlithgow, went to Mauritius to meet Len Williams, the new governor-general at the time, and asked why people were sleeping on the streets of Port Louis. He was told, and from that point, he took up the cause of the Chagos islanders, because he thought they had been disgracefully treated. The late Robin Cook also took the matter up, both at the time and much later, when he became Foreign Secretary. We should pay tribute to them for what they tried to do.
The reality is that it was the Chagos islanders themselves who managed to get some decency and recognition. Olivier Bancoult, who has become a great friend of mine, first wrote to me in, I think, 1988. It was a beautiful handwritten letter, saying, “Dear Mr Corbyn, could you do anything to help the Chagos islanders?” We kept in touch. Indeed, I have met him many times since, including recently at the launch of his book.
The Chagos Refugees Group was founded, and it operated from Olivier Bancoult’s house. It made demands on the Mauritian Government, demands on the British Government and enormous demands on somebody who later became the British high commissioner to Mauritius, namely David Snoxell. He and Olivier Bancoult did not always get along. The latter’s pressure on David Snoxell was enormous; he once went to the extent of locking him in his office until they had a proper meeting. Olivier Bancoult is a feisty guy, and the group are feisty people. We should recognise that the group’s determination brought about compensation and a litany of court cases all over the country and the world. I have been to many of the hearings; I have heard arguments made in the decolonisation committee and at the UN Human Rights Council, and at a whole series of court processes in Britain to try to get compensation and recognition of the rights of the Chagos islanders.
Today, we are dealing with the consequences of the unbelievable heroism of the Chagossian people, who have been seeking recognition and justice. I regret that there are now differences within the Chagossian community. Tam Dalyell and I strongly supported the move to get a right to British nationality for Chagos islanders, and to amend the relevant nationality Act. That was eventually achieved, and that is how, I am pleased to say, they now have unfettered access to this country. I am also pleased that the treaty continues to include that unfettered access. I hope that the Minister, when he comes to reply, can explain what discussions he has had with all the elements of the Chagossian community. The last thing we want to see is division in a community that has suffered so much, and deserves so much decency and recognition.
If the Chagos islands in their entirety are not passed over to Mauritius and Mauritian sovereignty, there are two consequences. First, there will be even greater dishonesty than we thought there was in 1975, and secondly, Britain will be in breach of an ICJ judgment. If that is what people want—if that is what Conservative and Reform Members want—so be it, but they would be acting illegally by hanging on to the islands. BIOT will go, and there will be Mauritian sovereignty over the whole area.
I supported the principles behind the marine protection zone, although I did not support the no-take element that was included at the beginning. I wanted Chagos islanders to be able to return to the archipelago, and to undertake sustainable fishing and so on. I am assured that the Mauritian Government support and recognise the need to preserve the pristine beauty of the ocean around there. I am less convinced that the military and the United States forces are equally committed to the preservation of the natural world and the environment. The record is not good—not perfect. I hope that the Minister, when he comes to reply, can assure us that there will be proper inspection, not just of the outer islands, but of the seas and the land of Diego Garcia.
It is wrong that the islanders were removed. It is right that they have an opportunity to return, which is what they have always campaigned for. I find it unfortunate beyond belief that they will only be allowed to visit Diego Garcia. Imagine if we could only visit the home where our parents lived, or the graves where many of our relatives had been buried. There is an emotional relationship there that will be broken by the refusal of the right of abode in future. I understood from previous discussions with the Minister and others that there could be a possibility of the return of a right of abode. I am not sure; maybe he can reply to that.
Am I happy about there being a huge military base on Diego Garcia? No. Am I happy about the rhetoric that has been used in this debate, which seems to be cranking up the idea of yet another cold war, when we should be looking for a world of peace, rather than one of war? I find that depressing, and not really fit for this debate.
There is a right of people who live under colonisation to achieve their independence. That was achieved by Mauritius, but it was thwarted in 1965. By agreeing now to return all the islands and the archipelago to Mauritius, we are completing a process that should have taken place in 1965, prior to Mauritius’s independence in 1968. Had that happened, and had there been no separation and creation of BIOT in 1965, we would not be having this debate today, because the issue would simply not have arisen.
Dr Luke Evans (Hinckley and Bosworth) (Con)
May I say how much of an honour it is to follow the right hon. Member for Islington North (Jeremy Corbyn)? Although we do not necessarily agree on a lot of policy, I am always struck by the fact that he puts people at the heart of his speeches. That has never been the case more than during his long campaign on this issue, on which he spoke eloquently. He is putting Chagossians right at the heart of any decision making. He deserves a lot of acclaim for that. He is right to call out some of the rhetoric in this debate, because, at the end of the day, those people really matter. I thank him for putting his points on the record.
There are three broad areas that I would like to cover: sovereignty, costs and some of the scariest parts of the Bill. I listened to my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), and I must admit that I am not nearly as learned or experienced as him; I bow to his legal analysis. I am a mere doctor, so I look for an evidence base when trying to understand the process. To that end, I thought it would be useful to write to the Foreign, Commonwealth and Development Office, which I duly did. I received a letter on 28 July 2025 from the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty), who I see will kindly respond, and is sat in his place. Much to my surprise and pleasure, a lot of what is in the letter was in the Minister’s speech. This debate allows me to walk through some of the letter and pose the questions that hit me as I looked into this case.
I must admit that when I stepped into this House in 2019, this was not a topic that I knew a huge deal about—I think many Members on both sides would say the same—but it very quickly became a topic that I realised we should look into understanding, especially as it deals with security.
The letter states:
“We had to act now because the base was under threat.”
That implies urgency, but the letter is loose on who was under threat, where and how. There is legal uncertainty but, as we have heard, we do not know which court is involved or why. It goes on to say:
“The courts have already made decisions which undermine our position.”
Courts, plural. We know that the ICJ is involved, but as has been stated, its opinion was non-binding, and there is a carve-out relating to the Commonwealth.
The Minister of State, Ministry of Defence, the hon. Member for Plymouth Sutton and Devonport (Luke Pollard), said, after being pushed to speak on the matter multiple times, that the International Tribunal for the Law of the Sea was the area of concern, but he will know that back in 2015, under annex VII, the tribunal agreed with the UK that sovereignty could not be determined by UNCLOS. This was a marine protection issue. Britons were trying to protect the area, and Mauritius wanted to open it up to farm it, and we were found against, under that treaty, in that court. This raises an important side issue: what protections are there in the Bill for the environment? They seem scant, or just not there.
The letter goes further, stating that
“in 2021…a Special Chamber of the International Tribunal for the Law of the Sea…ruled that Mauritius’ sovereignty was inferred from ICJ”.
So the Government themselves point that out. The letter goes on to say:
“The UK was not party to this case”.
Well, obviously, it would not be, but that means that we have not had our day in court to explain why we do not think that the judgment should apply. Mauritius’ sovereignty was inferred from that non-binding, political judgment.
The letter goes on:
“If Mauritius were to take us to court again, the UK’s longstanding legal view is that we would not have a realistic prospect of successfully defending its legal position on sovereignty in such litigation.”
Well, which court? If this advice is so long-standing, why do we not know about it? How have we got this far, going for year upon year with no agreement, without any urgency? It seems sensible and appropriate to release the advice on this. At the start of that quote, the letter said “If Mauritius”. It states later that it is
“highly likely that further wide-ranging litigation would be brought quickly by Mauritius against the UK.”
What evidence do the Government have to back that up? What is it that they say Mauritius will act so quickly on? We certainly have not seen it, if it was from 2021. The dates 2023 and 2024 have been mentioned, and we are now in 2025. I would be interested to see the Government release the evidence base for their claim about how quickly litigation would come forward, because as they rightly point out, there have been 11 rounds of negotiations, so there has clearly been time to sort things out.
Before someone jumps in and says, “Well, you opened the negotiations”, I would point out that we did that for the Falkland Islands as well. I find it amazing that we have trade unionists who built their whole careers on negotiating suddenly chastising the Conservatives for listening to the other side of a disagreement. That seems bizarre to me, because we want to respect each other and exchange ideas, but not have an agreement. It is rightly pointed out by Conservative Members that the agreement was not there; we did not take it. On the cost of the deal, there is no cost, because we did not have a deal to sign off.
The very next sentence in the letter says:
“This might, for example, include further arbitral proceedings against the UK under Annex VII of the UN Convention on the Law of the Sea. A judgment from such a tribunal would be legally binding on the UK.”
Dr Evans
It is. It is true about the legally binding aspect within the area that the tribunal covers, but that does not cover sovereignty, as we learned in 2015 when the tribunal sided with the British Government. Here we have the farcical situation of a House of policy and law shining light on one side and another, but never on the truth. This is where my right hon. and learned Friend the Member for Kenilworth and Southam is exactly right. If the Government were to come forward and say exactly which court, where and why, they might get more sympathy from Opposition, but we have been through an entire five-hour debate and we still do not have answers to those questions.
Another court that is often cited is the International Telecommunication Union covering spectre, radio and radar. Article 48.1 states
“Member States retain their entire freedom with regard to military radio installations,”
and the Government know that. Even the written answer from the Minister—it has been hinted at before—states:
“Individual countries have the sovereign right to manage and use the radio spectrum, within their borders, the way they wish, subject to not causing interference with other countries. This right is recognised in the Radio Regulations. The Radio Regulations are the international framework for the use of spectrum by radiocommunication services, defined and managed by the International Telecommunications Union (ITU). Individual countries, not the ITU, make their own sovereign spectrum assignments in accordance with the Radio Regulations. The ITU has no legal authority over these assignments regardless of the country’s civilian or military classification of spectrum. The ITU cannot challenge the UK’s use of civilian or military spectrum.”
It is clear here—the Government know it in their own answers—that the ITU has no role in sovereignty. It all boils down to where one believes British overseas territories stand.
Now we must talk about the cost, which has been much debated. There have been three figures in the debate: £3.4 billion, £10 billion and £34 billion. The £3.4 billion is the net present value using social time preference rate. The £10 billion is inflation adjusted, and the £34 billion is the nominal value by the Government Actuary’s Department. The question is, why use net present value? I put it earlier in the debate that there is no other precedent in the world for NPV being used in sovereignty matters. The Minister at the time asked whether the Conservatives want to do away with using NPV—of course not.
Dr Evans
Absolutely, the Minister says it is within the Green Book. Absolutely not, because it has a perfect place in domestic use for commercial practicalities, not for international sovereignty issues. No other country has looked, or would look, at this because it does not make sense.
The House of Commons Library said when asked that
“this methodology is regularly used in government accounting, but its main use is for cost-benefit analyses. It is unusual to see it used in this situation like this, where only the cost is being assessed and it is not being compared to any benefit”.
On that basis, and listening to the House of Commons Library, what cost-benefit analysis has actually been done in this case, and would it be put in front of the House so we might be able to see it?
At the end of the day, NPV is highly political because it assumes a discount rate, and what is the discount rate that one should choose? In the details, it talks about 3.5%, but the US will use 3.5% or 7%, which would vastly differentiate the figures. It goes on further, for the social time preference rate is 3.5%, but for 30 years. This deal is for 99 years, so how can the Government respond in a written parliamentary question that this
“represents good value for UK taxpayers”?
On what basis are they comparing that if there is no international comparison? We are talking only about domestic uses and for an accounting point.
As I come to my conclusions, possibly the scariest thing to me—I have tried to highlight it throughout the debate—which does seem to be falling on deaf ears, is article 13. I believe this treaty is legally bomb-proof. It looks sensible, and I am no legal expert as I have attested to, but it seems to stand the test of time. That means when article 13 says explicitly that in 99 years Mauritius can say no and just take control, that is a big worry. We have heard from many Government MPs how it secures the long-term aspirations of this country for a period of 99 years. When I mentioned that, several Government MPs scoffed. But is it not the duty of this House to provide not only for the next generation, but the rest of time for our country, in the best interests of our country? After listening to all the arguments that have been made about how essential the base is, the very fact that Mauritius could pull the base is a very scary prospect. There is, of course, a caveat: the right of first refusal. But if China decides to do a deal with Mauritius at exorbitant cost, we are over a barrel and the British taxpayer must fork out yet again to guarantee our security. Mauritius has been given a golden ticket, and it knows it.
Beyond the sovereignty and cost, my biggest concern is that we are outsourcing decision -making for our children and our children’s children. That is the modus operandi of this Government—we need only look at the borrowing in the Budget to see how they borrow on the backs of future children. Pushing this decision out for 99 years is not security for now; it will help, but it creates a far bigger problem in 100 years’ time. If the Government want to give away our islands, they should be open and transparent about how and why.
The biggest thing is that we have not even had our day in court. That is what most troubles the British public. I think that the British public would be reasonable if a court found against us—they would happily say, “We follow the rule of law”—but the Government will not even try that. They say that there is a risk. As has been said, this has been going on for years, and still we are looking at a treaty to sign it off.
That inevitably poses final questions about what happens with Gibraltar, the Falklands and Cyprus. The Minister is correct to point out that there are differences, but the biggest fundamental problem that the Government have in arguing to the British people and the people of the Falklands is about understanding. If this House cannot understand the legal concepts of the places where we are likely to fight these causes, how can we expect the public to do so? When it comes to delivering comms to the UK public, that is what they need to understand.
Bradley Thomas (Bromsgrove) (Con)
There have been some fantastic speeches from Opposition Members standing up for British interests, so I will not go on at length, but I wish to make a few points.
This surrender Bill is madness. The Government have decided, against the security and financial interests of the United Kingdom, to surrender territory to which there was no claim to a country that has no historical or cultural connection to it. They are doing so because, in the words of the Prime Minister,
“If Mauritius takes us to court again, the UK’s long-standing legal view is that we would not have a realistic prospect of success.”
Let us be clear: there is no legal or moral obligation to surrender the Chagos islands to Mauritius.
Labour is the worst negotiator, spending tens of billions of pounds of taxpayers’ money to surrender the Chagos islands, bunging billions to its unionised paymasters on day one of forming a Government, and showing a lack of will on tackling welfare dependency. Whatever Labour touches, the costs to the taxpayer go up and the benefits diminish. This spectacularly bad deal will leave Britain less secure while British taxpayers stump up tens of billions of pounds for tax cuts in a foreign country—equivalent to 4% of the Mauritian budget and to £50 million for every constituency represented in this House.
The staggering £35 billion cost is 10 times more than was originally claimed because of the Government’s creative accounting—even the UK Statistics Authority does not endorse the figure. It was arrived at by applying an assumed annual inflation rate of 2.3% over the 99-year lease period, despite inflation running at almost 4%. The total was then lowered again by between 2.5% and 3.5% per year through a Treasury practice called the social time preference rate, which reflects the fact that people value benefits received immediately more highly. It converts future costs and benefits into their present-day value rather than allowing for a more accurate valuation of future costs. The Government are happy to apply that rate in the case of their surrender deal, but will not use the same methodology to cost their affordable homes programme.
What is worse is that the Government have refused to allow Parliament a separate vote on the financial obligations under this terrible deal—they could have done, but chose not to. That £35 billion could have been spent on new hospitals or schools or, in the case of my constituency, on infrastructure to support the thousands of new houses that the Government want to build. It could have been spent on tax cuts to stimulate the economy or even to plug Labour’s own financial black hole. Labour is cutting tax for Mauritians off the back of hard-pressed UK taxpayers.
Then we get to the national security risks. Diego Garcia, located on the Chagos islands, is the UK’s most important military base in the Indian ocean. The geopolitical significance of the base cannot be overstated in a world in which China seeks to undermine us. We know that China thinks in a multigenerational capacity. It is a dictatorship that does not share our values, and this is the blink of an eye in terms of how it plans its future. China has made no secret of its intent to deepen its relationship with Mauritius. It is an increasingly hostile state towards the UK, and it knows too well that Mauritius is key to supporting its long-term strategic goals. Furthermore, Mauritius has signalled that it is working more closely with Russia on research and development, and with Iran on developing closer relations. Mauritius has gone on public record stating that it is grateful to the Chinese for playing a critical role in its pursuit of international recognition of Mauritian sovereignty over these islands.
Bradley Thomas
I will not. While the Government and the Prime Minister are trying to paint this as a good deal, they know that Beijing, Moscow and Tehran have watched closely and have all taken note.
Finally, it is not just this country’s taxpayers who recognise that this is a bad deal. Lord West of Spithead, former First Sea Lord, Chief of the Naval Staff, and Labour Security Minister, said that ceding the Chagos islands to Mauritius would be “irresponsible”, risk our strategic interests, and undermine the fundamental principles of international law. Why do the Government prioritise any interests other than Britain’s, and foreign sovereignty over that of the UK? The Bill will leave Britain poorer, weaker and exposed. It is a betrayal not just of UK interests but also of British Chagossians, and it does not deserve a Second Reading.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I now call Lewis Cocking for the final Back-Bench contribution. Colleagues who have contributed to the debate should be making their way back to the Chamber.
Lewis Cocking (Broxbourne) (Con)
There are no two ways about it: this is a surrender Bill with no benefits to my Broxbourne constituents. Ministers have shamefully attempted to hide the shocking cost of this deal from the British people and the public at large. When the new Labour Government took office, they kept telling us in this Chamber about the pretend £22 billion black hole in the public finances. If the black hole of £22 billion that we are continually told about by the Government did exist, I could solve it overnight—don’t do this deal. This deal is £35 billion to the Mauritian Government. The Labour Government go after British family farms with the family farm tax. They go after our pensioners and take their winter fuel allowance away, and they increase national insurance contributions for businesses, to make it more expensive for them to employ people, but they could just not do this deal. They talk in fiction, and this is an absolute disgrace.
How will Mauritius spend this money? By cutting taxes for its own citizens and paying their debts. Is the Minister proud that the only income tax cuts that this Labour Government will deliver are 6,000 miles away at the expense of the British taxpayer? The last time I checked, this was the British Parliament and we are supposed to stand up for British interests, not the interests of foreign countries or foreign citizens. We should be cutting taxes here and turbocharging the economy, not giving stuff away that we already own. We already have a base, and now we are going to lease it back, as we have heard from a number of colleagues.
Lewis Cocking
No, I will not give way. There have been lots of interventions, and I am fed up with the same interventions coming from the same Labour Members. Quite frankly it does not help the debate—just because they say something several times does not make it true.
The Bill is costing us financially, but it also has security risks. China supports the deal and is welcoming Mauritius into its sphere of influence with open arms. Mauritius is strengthening relations with Iran and Russia. As a Policy Exchange report notes, it is impossible to assert with certainty how much influence China will have over Mauritius in the next five or 10 years, let alone for the 99-year duration of this lease.
We already have British sovereign territory with a base, so I cannot understand why we have done that negotiation, and why we are hurting the British people with tax rises. As I said, we are being cruel to older people by taking away their winter fuel allowance, going after farmers with the family farm tax, and going after British businesses with the increase to national insurance contributions, yet we can find money out of nowhere—£35 billion—to give to Mauritius.
In summary, I gently say to the Government that people out there know that. When we knock on doors, as I am sure we all do across our constituencies, people will say to us, “Hang on a minute. How come we are being punished? How come we have to pay more taxes, but you soon find money when it suits you?” That is why the British public have fallen out of love with this Government already. Hopefully the Government will wake up and start representing the people who they were elected to represent in this Chamber: the British public, not foreign Governments such as that of Mauritius.
Wendy Morton (Aldridge-Brownhills) (Con)
Today’s Second Reading is not only important, but historically significant—sadly, for all the wrong reasons. We are debating a Bill that will leave Britain less secure, undermine our strategic interests and leave British taxpayers out of pocket. The decision by this Labour Government to surrender sovereignty over the Chagos islands to Mauritius and to pay billions of pounds for the privilege, with no checks or balances, is nothing short of a national humiliation. It is a deal that weakens Britain at home and abroad, and one that the official Opposition will oppose every step of the way.
John Slinger
On the point that the right hon. Lady makes about the alleged surrender of sovereignty, which has been made consistently by Conservative Members, does she accept that on 29 April 2024, just weeks before the election, the former Prime Minister—the right hon. Member for Richmond and Northallerton (Rishi Sunak), under whom they all stood for election only a year or so ago—and the Mauritian Prime Minister discussed negotiations on the “exercise of sovereignty” and instructed their teams, no less, to “continue to work at pace”?
Wendy Morton
I remind the hon. Member of two things. First, talking and signing are two very different things. Secondly, some of us on the Conservative Benches remember that no deal is better than a bad deal.
Paul Holmes
The hon. Member for Rugby (John Slinger) has omitted some of the quote, because he was proven wrong before. He has failed to say that the former Prime Minister said “mutually beneficial”. Some of the gain that came out of that discussion was the fact that it was not mutually beneficial for this country, and we stopped the negotiations.
Wendy Morton
My hon. Friend makes a very valid point. If Labour Members had spent a little more time actually listening to some of the contributions from Conservative Members, they would perhaps understand things a little more. I will come back to that point shortly.
Before I turn to the substance, I wish to pay tribute to colleagues on the Conservative Benches who have spoken powerfully about the sheer folly of this deal. They have rightly highlighted its staggering costs, the accounting methods used, the reckless security implications, the lack of transparency and the way in which it sadly sidelines the Chagossian community.
There have been a number of contributions, but I very briefly pay tribute to my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), the former Attorney General. He has not just demonstrated his extensive legal knowledge and expertise in this area, but questioned the legal uncertainty that Ministers are relying on. He has taken the time to explain and to remind this place of the issues relating to article 298 of UNCLOS, which is very relevant to today’s debate. He highlighted some key unanswered questions. Quite frankly, I urge every Member of this House to have a read of Hansard before they go into the voting Lobby this evening.
Similarly, my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) highlighted and reinforced the important point about article 298 of UNCLOS. My hon. Friend the Member for Hamble Valley (Paul Holmes) reminded Labour Members of the red lines put in place by Lord Cameron, who stopped negotiations—it quite clearly seems that they needed to be reminded that talking and signing are two very different things. My right hon. Friends the Members for Maldon (Sir John Whittingdale) and for Tonbridge (Tom Tugendhat) talked about strategic issues and the costs of the deal. There were valuable contributions from my hon. Friends the Members for Reigate (Rebecca Paul), for Chester South and Eddisbury (Aphra Brandreth), for Bromsgrove (Bradley Thomas), for Broxbourne (Lewis Cocking) and for Hinckley and Bosworth (Dr Evans).
One thing that is very obvious is that we need clarity. To give just one example, the Government claim that we may have problems with spectrum if we do not agree a deal, but other parts of the Government have indicated that the International Telecommunication Union has no power to veto the use of military spectrum. [Interruption.] Government Members do not want to intervene now. These are not passing political points; they are hard truths about the dangers that this deal poses to Britain’s security and standing. Before I move on, though, I wish to pay tribute to the hon. Member for Crawley (Peter Lamb) for his wise and brave words today, and for standing firm as a constituency MP and standing up for members of his community.
Turning to the Liberal Democrats, I have to say that I struggle a little to understand their position. They say that they oppose the Bill, but they did not vote against the treaty in the House of Lords—in fact, they chose to prop up Labour, rather than defend Britain and the rights of the British Chagossians.
Calum Miller
I am grateful to the right hon. Lady for allowing me to clarify. As she well knows, their lordships in the House of Lords invited the Government to provide a statement on the rights of the Chagossians, and the Government agreed that they would not ratify the treaty until such a statement had been laid before both Houses, allowing for a debate in both. As I made clear in my speech, I look forward to that opportunity, and I very much hope that the Minister will confirm when that statement will be laid before this House.
Wendy Morton
I am grateful for that intervention—let us wait and see whether the Minister does confirm that date. However, the fact of the matter remains that the Liberal Democrats did not vote against the treaty.
Turning to costs and taxpayers, the financial costs of the deal alone should be a cause of shame for this Government. Thanks to Conservative FOI requests, we now know that the true bill for this surrender is not £3.4 billion, as Ministers have claimed, but closer to £35 billion—a sum that is 10 times higher than originally admitted, and one that will fall squarely on the shoulders of British taxpayers. Let us be clear what those billions will fund. They will not fund better schools or hospitals here at home, or defence capabilities to protect our citizens; they will fund tax cuts in Mauritius. At the very moment when this Labour Government are hiking taxes on family farms, education and businesses, they are content to bankroll over 4% of another nation’s budget. To Conservative Members, that is indefensible.
However, the risks to Britain’s security are even greater. Diego Garcia is our most strategic and important base in the Indian ocean, critical to our partnership with the United States and vital to our ability to project influence in the Indo-Pacific, yet this Bill leaves huge questions unanswered. What guarantees are there that the UK can extend the lease over Diego Garcia unilaterally when the Mauritian Prime Minister has said otherwise? What safeguards will prevent hostile powers such as China, Russia or Iran from seeking a foothold in the archipelago once Britain steps back? We know that Beijing already describes Mauritius as a partner with “strategic advantages”, while Port Louis boasts of advancing co-operation with Moscow. Does the Minister really believe that this makes Britain more secure?
We also cannot ignore the issue of nuclear deterrence. Mauritius is a signatory to the Pelindaba treaty, which prohibits the stationing and storage of nuclear weapons, yet Ministers have failed to explain what that will mean in practice once sovereignty is transferred. Will it constrain our closest ally, the United States? Will it put limits on what we can do on Diego Garcia in future? These are not trivial questions, because they go to the heart of our security posture in the Indo-Pacific, yet we still have no clear answers. Even Lord West, a former Labour Security Minister, has warned that ceding the Chagos islands is “irresponsible” and dangerous, yet this Government press on regardless, blind to the risks and deaf to the warnings.
Let us not forget the Chagossians themselves. For years, Labour politicians claimed a fundamental moral responsibility towards this community, but in government they have abandoned them, offering only token consultation and denying them a real say in decisions that affect their homeland. Once again they are being sidelined. This is about the Chagossians and their future, and that of future generations.
We are told that millions will be channelled into a so-called trust for the Chagossian people, but under this deal Britain will have no meaningful role in determining how those funds are used. Decisions will sit entirely with Mauritius, with no mechanism for proper oversight by Parliament and no guarantee that the Chagossians themselves will see the benefit. There is no accountability to them, no accountability to us, and no accountability for how British money is spent. There are many questions about the fund, not least what guarantees and safeguards exist to ensure that it reaches all the Chagossians, given that so many of their communities are spread around the world.
Time and again, Ministers have refused to come clean with Parliament about the terms of this deal. We have had contradictory accounts from the Mauritians and from Whitehall, confusion about the sums involved and secrecy so deep that even officials were asked to leave the room during negotiations. If Ministers cannot be open with Parliament, they have no business asking Parliament to support this Bill.
Before I conclude, I will touch briefly on the other overseas territories. Let me be clear: we are debating and discussing the Chagos islands, and at no stage have those on this Front Bench ever conflated surrendering the sovereignty of the Chagos islands with that of the other overseas territories. It is clear that when Labour negotiates, Britain loses. That is the story of this deal. This is not a settlement forced on us by law. The Government have chosen to hide behind advisory opinions, rather than to stand firm, defend our sovereignty and protect our national interests. It is simply the behaviour of this unpatriotic Labour Government. We on the Opposition Benches could not be clearer: Britain should not surrender the Chagos islands and we will fight this Bill every step of the way.
I will conclude, but I had hoped that the new Foreign Secretary would be here today. Where is she? She has chosen to be elsewhere, rather than answer to the Chagossian people. I will end with a plea to the Minister, for whom I have the highest personal respect. We have often been in opposite positions across the Dispatch Box, but I ask him please to step back, pause and reflect. Britain does not need to surrender the Chagos islands. Do the right thing by our country, by our taxpayers and by the Chagossian people. Stand firm and keep the Chagos islands British.
The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
What a debate. I genuinely think there were some thoughtful contributions from all parts of the House, but some were simply rhetoric and, frankly, a lot of nonsense. I single out the Chair of the Defence Committee, my hon. Friend the Member for Slough (Mr Dhesi), and my hon. Friend the Member for Crawley (Peter Lamb). Although I disagree with him, I thought he made passionate points of conviction on behalf of his constituents. There were also thoughtful contributions from my hon. Friends the Members for Dunfermline and Dollar (Graeme Downie), for Kilmarnock and Loudoun (Lillian Jones), for Macclesfield (Tim Roca), for Bolton West (Phil Brickell), for Halesowen (Alex Ballinger), for Hyndburn (Sarah Smith) and for Leyton and Wanstead (Mr Bailey).
On the other side there were particularly thoughtful contributions—which I might not have agreed with—from the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), the right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright), who is a former Attorney General, and the right hon. Members for Maldon (Sir John Whittingdale) and for Islington North (Jeremy Corbyn). There was a thoughtful contribution from the hon. Member for Hinckley and Bosworth (Dr Evans), until he got on to the overseas territories at the end. I was pleased to hear that commitment from my opposite number, the right hon. Member for Aldridge-Brownhills (Wendy Morton), although she may want to check the Conservative Twitter feed for what it was putting out about the overseas territories, which I thought was deeply shameful and damaging.
I want to be clear about the purpose of this Bill and the decisions we have taken, which are about defending this country and our national security. That is the first duty of this Government. It is the first priority of our Prime Minister, our Foreign Secretary, our Defence Secretary and the entire ministerial team. I am afraid that whatever exhortations to the contrary we hear from the Opposition Benches, we will not take risks with our national security or engage in gambles in courts or anywhere else. That is not the action of a responsible Government, and we are not prepared to take those risks.
That is why this Bill will ensure that we ratify the treaty with Mauritius, resolve the legal status of this vital base and, crucially, protect its operations, which is the most fundamental aspect of what we are discussing today. It will ensure that we retain the critical security capabilities that support key operations around the world. Those are capabilities not only for ourselves, but for our allies. Fundamentally, those capabilities keep the people of this country safe on our streets, they keep our armed forces safe, and they keep our allies safe. We will not scrimp on national security or take gambles with it, which is essentially the argument that we have heard from the Opposition today.
I will start with the reasoned amendment, because it is full of so many holes and so many wrongs, including claims about the costs. It says that the treaty
“does not secure the base on Diego Garcia”.
That is wrong. It says that we do not have the “right to extend” the lease. That is wrong. It says that
“the measures in the Treaty leave the base vulnerable”.
That is wrong. It says that the treaty does not
“protect the rights of the Chagossian people”.
That is wrong. And it say that the treaty does not protect
“the future of the Marine Protected Area”.
That is wrong. I urge the House to reject the reasoned amendment today.
This all comes back to a fundamental question: if there was not a problem, why did the previous Government start negotiating? Why did they continue negotiating until just weeks before the general election? It is simply not correct to claim that the negotiations were stopped. We have heard what the official readout of the meeting with the former Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak), said and it was very, very clear: he instructed the teams to act at pace in order to make the agreement. The evidence is there, and claims to the contrary are simply wrong.
A number of important points have been made today, but I will start with those about operations, because some very sensible questions have been raised. It is the operations of the base that are currently under threat from the legal uncertainty. That is why we have taken steps to secure it, and why our allies and Five Eyes partners—the United States and others—back this deal. In the future, those operations will now be secure. The Bill ensures that we can exercise all rights and authorities granted through the treaty. We will retain full operational control over Diego Garcia, which we have continued to have for the last 50 years—the Bill secures that.
I want to reiterate our commitment to expeditiously inform Mauritius of military action. Let me repeat for the record: we are not obliged to give Mauritius advance notice of any action under the treaty. No sensitive intelligence will be shared, nor operations put at risk—it is there on the face of the treaty. Our allies, especially the United States under two Administrations, have gone through it with a fine-toothed comb. They would not be supporting this deal and signing off on it if that operational autonomy was not protected.
I turn to Members’ points about the law. Many reasonable questions have been raised, and we have heard some historical revisionism at different points. The right hon. Member for Tonbridge (Tom Tugendhat) expressed worries about lawfare, but we have acted precisely because of the threats of action that could impede the operations in the short, medium and, indeed, long term. It is totally wrong to say that Mauritius had no claim; decades ago, we agreed that sovereignty would ultimately revert to Mauritius. The Government’s legal case has been published—it was there for all to see on the day of treaty signature. In summary, Mauritius would have secured a binding judgment that would have harmed the operation of the base. That has been the consistent position of the Government. We have set it out on a number of occasions, and our position is that the UK would not have a realistic prospect of successfully defending its legal position on sovereignty in such litigation.
The right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright), who is a former Attorney General, and others have reflected on a number of issues. I will not go into all of them but, for the record, let me refer to the comprehensive rejection of our arguments by 13 judges to one at the ICJ in 2019; the loss in the UN General Assembly vote by a margin of 116 to six; the maritime delimitation judgment that is binding on Mauritius and the Maldives, which was handed down in 2021 by the special chamber of ITLOS; the obligations placed on the BIOT Administration by UN bodies to cease specific activities; and a series of complications and blockages at international organisations, including the Comprehensive Nuclear Test Ban Treaty Organisation. We have also set out where future risks are likely to take place, and we are not willing to gamble with that. Those are the fundamental facts here, and that is why it is necessary to do this deal.
Questions were raised about the extension. It is very clear that we have the right of first refusal, and that we might extend the lease for a further 40 years.
Sir Jeremy Wright
The point I made in my contribution was that I relied entirely on what Ministers had said to this place about the Government’s legal justification for their actions. That chain starts with the former Foreign Secretary saying that, in the Government’s view, a binding legal judgment was inevitable. The Minister has just given us a list of a variety of opinions and clear opposition —it is true—to the UK’s position from a variety of different organisations. As far as I can tell, he has not told us from which court a binding judgment might come. We have said that it cannot be the ICJ. Which court could give a binding judgment against the UK in this matter?
Stephen Doughty
First, the right hon. and learned Gentleman knows that I am not going to disclose the full privileged legal advice to the Government, which the previous Government received, for very good reasons. We have set out very clearly that provisional measures could be brought forward that would immediately affect operations—within six to eight weeks—and the conditions in chapter 7 of ITLOS. In a number of areas, there were very significant risks. I will not, and he understands why I will not, go into the details of that, but it is simply not a risk that this Government are willing to take or, as he knows, that the previous Government were willing to take, which is ultimately why they started the negotiations.
I am conscious of the time, and I have explained the extension, but I want to talk a little about our allies and opponents. The shadow Foreign Secretary said that people have not said publicly what they feel about the deal, but that is not the case. We have heard from President Trump and US Defence Secretary Hegseth. US Secretary of State Rubio said:
“The U.S. welcomes the historic agreement between the UK and Mauritius on the future of the Chagos Archipelago. This agreement secures the long-term, stable, and effective operation of the joint U.S.-UK military facility at Diego Garcia, which is critical to regional and global security.”
Our Five Eyes allies support it, with Canada’s Foreign Ministry saying that it welcomes the signing, and Australian Foreign Minister Penny Wong saying that Australia welcomes the signing, while Australia’s ambassador to the US said that it was great to see a resolution to this important issue. New Zealand’s Foreign Minister and India’s Ministry of External Affairs have said the same. Japan has commended the efforts of the Governments to reach agreement, and the Republic of Korea similarly welcomed its signing. In addition, the Chief Minister of Gibraltar and others have welcomed the deal.
It is, therefore, clear that the Government are on the side of the United States, our Five Eyes partners and other allies around the world, and we are protecting our operations and national security. Given the US bipartisan support, what is not good enough for the Opposition? Our key security partners back the deal, and that is why they have agreed to it.
Quite frankly, we have heard some outrageous claims about the costs. We have been very clear about them, and the £34 billion figure is absurdly misleading and inaccurate. It ignores inflation and the changing value of money over 99 years—£1 today will not be worth the same in 99 years’ time—and the £101 million annual average cost compares favourably with other countries’ bases. Our accurate figures reflect how the Government account for long-term project spend. Funnily enough, when we add a sum each year, which is entirely reasonable, over a 99-year period, it adds up to a larger sum. This is equivalent to the spending on the NHS for a few hours, and a tiny proportion of our defence budget. It compares very favourably with what France has paid for its base in Djibouti. This base is 15 times larger, while France’s base is next to a Chinese facility, and ours has unique security provisions in place.
Quite frankly, it shows some brass neck for the Opposition to be making claims about defence and security when they presided over the hollowing out of our armed forces, appalling accommodation and decline. That is changing under this Government. We are spending on our national defence, our NATO commitments and our security relationships with the United States, and we will absolutely not apologise for that or scrimp on our national security. One final point is that a financial element was always key to the deal, as the Conservatives conceded in their engagements under multiple Prime Ministers.
Important points were made about the environment and the marine protected area. Fundamentally, Mauritius will determine the area’s future, but Prime Minister Ramgoolam recently reaffirmed to the former Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Streatham and Croydon North (Steve Reed), his country’s commitment to protecting that unique ecosystem. We are engaged in active discussions with the Mauritians about that, and I will keep right hon. and hon. Members updated.
I conclude as the Minister of State, Ministry of Defence, my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard) started, by paying tribute to the Chagossians who have joined us here today. Both in opposition and in government, I have repeatedly met a range of Chagossian communities with a range of views, and I have a deep respect for their dignity and their different views. There will be people who fundamentally disagree with this treaty, but there are many who fundamentally agree with it, as we have heard in this debate.
The Government deeply regret how Chagossians were removed from the islands. We have heard concerns about the impact on them and their ability to access British nationality. The Bill will ensure that Chagossians have no adverse effects on their nationality rights—no Chagossians will lose their existing rights to hold or claim British citizenship. It will be for Mauritius to set the terms of and manage any future resettlement. Reasonable questions have been asked about why people cannot resettle on Diego Garcia, but it is an active military base with security restrictions so that is not realistic, but we will restart the heritage visits.
Stephen Doughty
To anticipate what the Liberal Democrat spokesperson might be about to ask me, I confirm to him that before ratification, there will be a ministerial statement. I will not give him the exact date, because I do not set the dates of business, but it will provide a factual update on resettlement eligibility and how the trust fund will work. I am engaged actively in those discussions, and that will enable further discussion in a proper manner.
Calum Miller
Will the Minister please confirm, as Lord Collins did in the other place, that time will be set aside in both Houses for a debate on the statement?
Stephen Doughty
Absolutely. I confirm that we are happy to discuss that further. Such decisions are not for me, but for the usual channels and the leaders in both Houses. However, I want to confirm the commitment that was made previously.
This comes down to one fundamental question: why did the Opposition start the negotiations if there was not a problem? Why did they continue the negotiations until just weeks before the general election? It was because fundamental national security interests and the protection of the British people were at risk. This Government recognise that, our allies recognise that and we have acted to secure a deal to protect Diego Garcia and its operations well into the next century. While Reform and the Conservatives speak of national security but fail to do anything to secure it, this Labour Government negotiate and deliver. We deliver deals—with the United States, with India, with the European Union and on new frigates—and, fundamentally, we deliver national security by securing this base on Diego Garcia. I commend the Bill to the House.
Question put, That the amendment be made.
Business without Debate
Madam Deputy Speaker (Ms Nusrat Ghani)
With the leave of the House, we will take motions 3 and 4 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Financial Services and Markets
That the draft Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025, which were laid before this House on 3 July, be approved.
That the draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025, which were laid before this House on 9 June, be approved.—(Gen Kitchen.)
Question agreed to.
Developments near Lutterworth and its Surrounding Villages
Alberto Costa (South Leicestershire) (Con)
I rise to present a petition from 241 residents of South Leicestershire who share my concern about the threat of gross overdevelopment in Lutterworth and its surrounding villages. I declare from the outset, as a proud constituency-based MP, that I live in the affected area.
The petition highlights proposals such as the proposed Tarmac quarry near Misterton, which is not in the county council’s mineral plan; plans for large-scale warehousing at Lutterworth East and Gibbet Hill, which is not in Harborough district council’s local plan; a proposed giant battery storage site between Lutterworth and South Kilworth; and the reduction of affordable housing in Lutterworth East. A minimum of 40% the housing was to have been affordable, but that is now changed to a minimum of just 10%. That will deprive hundreds of families of much-needed affordable homes. Those proposals threaten the character of our historic Lutterworth market town and our wonderful Leicestershire villages.
Following is the full text of the petition:
[The petition of residents of the constituency of South Leicestershire:
Declares that current proposals such as Tarmac’s proposed sand and gravel quarry near Misterton, which is not an allocated site in Leicestershire County Council’s mineral extraction plan, large-scale warehousing developments at Lutterworth East and near Gibbet Hill, which are not compliant with Harborough District Council’s Local Plan, and the proposed giant battery storage and electrical substation between Lutterworth and South Kilworth, which raises health, safety, and noise concerns, and the reduction of affordable housing at Lutterworth East from a promised minimum of 40% to a minimum of 10%, denying families access to affordable homes, threaten the character of our historic market town and villages.
The petitioners therefore request that the House of Commons urge the Government to intervene if necessary to ensure that relevant county and local planning policies are applied in respect of Tarmac’s proposed sand and gravel quarry near Misterton, the warehousing developments at Lutterworth East and near Gibbet Hill Roundabout, and the proposed giant battery storage and electrical substation between Lutterworth and South Kilworth, and to the proportion of affordable housing in new developments.
And the petitioners remain, etc.]
[P003109]
Accessibility of Railway Stations: Dulwich and West Norwood
(1 day, 13 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Helen Hayes (Dulwich and West Norwood) (Lab)
I am grateful for the opportunity to bring before the House the significant issues that affect my constituents across Dulwich and West Norwood because of the lack of accessibility at our local railway stations.
The Dulwich and West Norwood constituency covers part of Lambeth and part of Southwark. Unlike much of the north of those boroughs, we are poorly served by the London underground network; there is only Brixton tube station, just inside a corner of my constituency. Instead, my constituents rely on rail and buses to get to central and outer London, as well as for more local journeys. We have many stations—10 to be precise, with an 11th just outside the boundary. The stations in my constituency are Brixton, East Dulwich, Gipsy Hill, Herne Hill, Loughborough Junction, North Dulwich, Sydenham Hill, Tulse Hill, West Dulwich and West Norwood. Only three—Herne Hill, East Dulwich and West Norwood—are accessible, and only Herne Hill meets up-to-date standards of accessibility and has lifts to all platforms. The ramps at East Dulwich station are too steep, and West Norwood ticket office is not step-free, although the platforms are accessible from the street.
The lack of step-free access at our local railway stations causes major problems for many of my constituents. Wheelchair users are effectively locked out of rail travel entirely at inaccessible stations. Parents and carers for small children may or may not manage to carry or drag their buggy up and down flights of stairs at their station. Even if they can, it is neither safe nor comfortable. Frail and elderly passengers are confronted with impossibly difficult climbs; there are really long flights of stairs at several stations. Loughborough Junction and West Dulwich in particular have long, steep flights of stairs that can be difficult and daunting for many passengers.
The lack of accessibility at our local stations is counter to two of the Government’s strategic objectives. Inaccessible stations are a significant barrier to work for many physically disabled people, who cannot easily access employment in the wider London economy because they cannot get to work from Dulwich and West Norwood. Further, many people will not make the modal shift from private cars to public transport, as the Government want them to, while our stations remain inhospitable and inaccessible because the only way to access the platforms is via a steep flight of stairs.
During every round of Access for All funding since I was first elected more than a decade ago, I have pressed for stations in my constituency to be granted funding to increase the number of step-free stations, but the previous Government failed to prioritise investment in my constituency. Herne Hill was upgraded with the installation of lifts under the Access for All programme in 2013. That is more than a decade with no further advancement in the accessibility of local rail travel.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I welcome and support my hon. Friend’s campaign. As the chair of the all-party parliamentary group for wheelchair users, I campaign a lot on these issues. Transport for London has an excellent app that shows which stations are wheelchair accessible and which have lift access, and I believe we should introduce that nationally. We should also introduce a campaign for accessible toilets, as well as for lifts and wheelchair access. Would my hon. Friend welcome expanding the app nationally, as it is currently available only in London?
Helen Hayes
I thank my hon. Friend for his intervention and for all his work on this important set of issues. He is absolutely right to say that full accessibility is about more than simply level access, and also that information about accessibility at different rail stations is vital to whether travellers will be able to travel, particularly if they are visiting somewhere outside their home area. I support his campaign for better information.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Mr Jim Shannon to speak on the accessibility of railway stations in the Dulwich and West Norwood constituency.
Jim Shannon
The hon. Member for Dulwich and West Norwood (Helen Hayes) is right to bring this topic forward; I spoke to her beforehand. I believe that the Government need to provide what she is trying to achieve for her constituency in every constituency, as the chair of the all-party parliamentary group, the hon. Member for Bexleyheath and Crayford (Daniel Francis), clearly outlined. There is something wrong when rail staff cannot be in place to help with accessibility without people having to ring 24 hours ahead. Does the hon. Lady further agree that this has to form part of our rail obligations, wherever that may be in the United Kingdom? What is right for her constituents in Dulwich and West Norwood is right for everywhere else, including my constituency. Does she agree that the Government must focus on a strategy that gives equality to those who are disabled in our communities?
Helen Hayes
I am honoured to be intervened on in an Adjournment debate by the hon. Member for Strangford (Jim Shannon), and I thank him for his intervention. He is right that adequate staffing at railway stations is a really important part of making stations accessible. All too often, disabled passengers have to endure unacceptably long waits when there is a failure in communication. The railway operating companies need to continue to improve their service so that not only the stations but rail travel itself is fully accessible and disabled passengers can get the support to which they are entitled.
All our stations should be accessible, and it is therefore important that the Government work to increase the funding available and make changes to the criteria for Access for All funding. Currently, the Access for All programme prioritises stations with high levels of footfall and the availability of third-party funding—usually through local development—as well as proximity to a hospital or major interchange and non-specific rail industry priorities. The majority of the 10 stations in my constituency are busy but would not rank among the highest footfall locations in the country. They do not have significant development sites in close proximity or other third-party sources of funding available. They are not next to a hospital and we cannot account for non-specific rail industry priorities.
Valerie Vaz (Walsall and Bloxwich) (Lab)
My hon. Friend mentioned stations in her constituency, and I would like to mention Bescot Stadium station in my constituency. Does she agree that if a station is inaccessible, the figures that are quoted for its footfall will be much lower?
Helen Hayes
My hon. Friend is absolutely right to say that the figures cannot account for passengers who cannot access a station, and I welcome her campaign for the station in her constituency. This is a national issue. The high number of stations in Dulwich and West Norwood makes it an acute issue in my constituency, but this is a problem everywhere.
When I have inquired about how best to make the case for stations in my constituency, I am told to make representations to the Government and through the Access for All process. I have done so, but there is no process outside of public pressure and political lobbying prior to Access for All applications being submitted to support local communities with a more strategic approach. We need an approach that enables us to join up community views and aspirations with transport feasibility work to understand how to prioritise in a realistic way which of our stations are most likely to secure funding because of their footfall.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
If one of my hon. Friend’s constituents in Dulwich or West Norwood were to get a train to my constituency in Longton—there is a tenuous connection—they would also find that station to be entirely inaccessible. Unlike her case, funding was allocated to Longton train station through the transforming cities fund, but the local authority then decided to reallocate that funding to block paving outside one of the town halls for public realm improvements. Perhaps when she is successful in getting the funding that her station deserves, she will support a campaign to ringfence that funding and protect it so that it cannot be siphoned off for other local projects that often do not support the accessibility for which the funding was designed.
Helen Hayes
I thank my hon. Friend for his intervention, and I will come on to some of the points about the better co-ordination needed to solve some of these problems.
We need an approach that enables us to join things up to understand which of our stations are most likely to secure funding because of their footfall, because they link up with particular bus routes or because they are relatively lower cost and therefore easier to deliver. The process, as it stands, is not transparent, and there is no support available for communities to prepare for it. As an example, I have been approached by residents in Dulwich in recent weeks who would like my support in moving forward a proposal for step-free access at North Dulwich station. A feasibility study would be helpful so we can all understand where lifts could be installed and the broad costs of doing so. But Southwark council has no land interest in North Dulwich station, and there are no major development sites in the local area. At a time when local authority funding is constrained, it would be helpful to have the Minister’s advice on how to move such a proposal forward.
Another example of the urgent need for more joined-up preparatory support is Loughborough Junction station, currently being supported by a local community campaign called “Lift Up Loughborough Junction”. A tiny station occupying just half a railway arch, Loughborough Junction has a particularly long, steep flight of stairs up to its two platforms. It has seen an increase in passenger use compared with pre-covid levels, likely as a consequence of new nearby housing development. Through that development, some funding has been allocated towards improvements at the station, but there is at present no mechanism to decide how that is to be spent or to deliver the improvements.
Delivering step-free access at Loughborough Junction station is complicated. It cannot be done within the current station’s curtilage due to insufficient space, so the station would need to expand either into adjacent arches or on to a site to the rear of the current station. The ownership of those sites is complex, with the Arch Company responsible for neighbouring arches, Network Rail responsible for the structural integrity of the arches, the train operating company Southern responsible for the station, and private land ownership to the rear. If we are to solve the problem of accessibility at the station, there must be a way of joining up those interests, undertaking feasibility work, creating partnerships that can bid for funding together and moving the project forward. As residential development in the area continues to expand, a station that already feels unsafe at peak times due to the large number of passengers will become more and more dangerously overcrowded, and disabled residents, families with young children, and frail and elderly people will continue to be locked out of rail travel.
In 2018, the then Government’s inclusive transport strategy set out the aim of achieving equal access to the rail network by 2030. That is just a few years away, and we are very far away from realising that goal. In the meantime, Government policy has continued, quite rightly, to seek to deliver continued modal shift from private cars to public transport where possible, but modal shift does not happen by encouragement alone. It requires meaningful levels of Government investment to make public transport an accessible, convenient and attractive option, and accessibility is the basic minimum requirement. The Government can encourage people all they like, but if they are literally locked out of using public transport, it will not make a difference for residents with disabilities, parents who need to travel with young children, the less mobile and the elderly.
I secured this debate to seek help from my hon. Friend the Minister. Is he considering the criteria for future rounds of Access for All funding so that areas such as mine, with many inaccessible stations, will not continue to be overlooked by that funding stream because we do not have the highest levels of footfall, major transport interchanges or nearby development sites. What representations is he making to the Chancellor in relation to the Budget about the overall quantum of Access for All funding, so that future rounds of the scheme can start to deliver the step change in railway station accessibility that is needed across the whole country? Is he underlining to the Chancellor that Access for All funding should be part of the strategy to support disabled people who want to work to get to work?
Will the Minister consider a better approach to pre-bidding support for Access for All, on a locality basis, to help local communities and councils to understand how best to prioritise their stations for Access for All bids, and to create strong local partnerships in which multiple agencies need to be involved? May I ask for his support in relation specifically to the complex situation at Loughborough Junction station, and to the need for a feasibility study for North Dulwich station and feasibility work at Gipsy Hill station, which requires accessibility works to one platform only? Finally, can he tell disabled people in Dulwich and West Norwood, and across the country, when they can expect the equal access to the rail network that is their right?
Madam Deputy Speaker (Ms Nusrat Ghani)
This is a very important debate. Minister, you may wish to take this opportunity to reflect on the accessibility funding application of Wadhurst station in my constituency of Sussex Weald.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
Thank you, Madam Deputy Speaker—I have made a note of that particular station and will be speaking to the Rail Minister about it as a priority, as I am sure Members will understand.
I begin by congratulating my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) on securing the debate. She is right to raise the important topic of accessibility at stations in her constituency. I assure her and all Members of this House that the Government understand the enormous emotional, social and economic benefits that accessible transport delivers not just for the 16 million disabled people in the UK, but for families, communities and our economy as a whole.
A railway that works for everyone is not a luxury, but a necessity. Whether someone is using a wheelchair or has a visual impairment, or is pushing a pram, carrying heavy luggage or recovering from injury, their needs matter. That is why the Access for All programme is such a vital part of our strategy for improving accessibility. Since its launch in 2006, that programme has made tangible improvements to accessibility at stations across the country, and I am pleased to report that progress continues.
To date, we have delivered step-free access at over 260 stations across Great Britain. That means properly installed lifts, ramps, tactile paving, improved signage and wayfinding changes that make a real difference to the everyday lives of passengers. In addition to those major upgrades, we have completed over 1,500 smaller-scale improvements, which include everything from accessible ticket machines and better lighting to handrails and help points. Those might seem like small things, but for someone with limited mobility or visual impairments, they can make all the difference between a journey that is possible and one that previously has not been.
Although I am pleased with that progress, it is not just about numbers; it is also about impact. Behind every accessible station there is a person who can now get to work, visit friends and family, attend school or simply enjoy a day out without relying on others or facing barriers that others do not even have to think about. However, we know that this work is not finished; we know that we must go further and that the pace of change is not always fast enough.
Earlier this year Network Rail completed feasibility work on 50 stations identified as strong candidates for future Access for All investment. Those stations were chosen carefully, based on criteria that reflect demand, need and opportunity for improvement. My hon. Friend raised the issue of criteria. As she mentioned, stations are nominated by the industry in consultation with local authorities and others, including TFL, to ensure that the funding benefits as many passengers as possible. Stations are then assessed by annual footfall, and weighted by the incidence of disability in the area, using census data. Local factors, including, as she said, whether a station is near a hospital, the availability of third-party funding and the deliverability of the station, are also considered. Additionally, we aim to ensure a fair geographical spread of projects across the country.
I would be happy to facilitate a sit-down meeting with the Rail Minister, so that my hon. Friend can discuss the issues in her constituency, and the opportunities for future rounds of Access for All funding.
Gareth Snell
While the Minister has his diary out, I wonder whether he could facilitate a similar meeting for me with the Rail Minister regarding Longton train station.
Simon Lightwood
I particularly enjoy offering meetings to my colleagues, and I am sure that the Rail Minister will have heard that request. We will soon be announcing which of those 50 stations will move into the next design phase. That is a sign of our ongoing commitment to make the railway more accessible, more inclusive and more modern.
Accessibility is, rightly, a “golden thread” embedded in everything the Department does, and that extends to how we design, build and maintain our railways. Every time we install, renew or upgrade station infrastructure, whether that is a new platform, a concourse, a footbridge or a ticketing system, those works must meet modern accessibility standards. Infrastructure managers, station operators and service providers are legally required to ensure that those facilities comply with accessibility requirements, as laid out in the relevant legislation and guidance. Where those obligations are not met, enforcement action can be taken by the Office of Rail and Road, the independent regulator.
That approach is absolutely right, because although progress is encouraging, it must be sustained and consistent. Accessibility standards across the rail network cannot depend on geography or luck. Whether someone lives in a city centre or a rural town, and whether their station is a major interchange or a small local stop, the right to access the railway should be universal. That does not stop at stations, of course; it includes improvements to rolling stock, including audio and visual announcements, priority seating, wheelchair spaces and on-board assistance. It also includes training staff to help change cultures and to provide appropriate support to disabled passengers, and not just in terms of procedures but also with empathy, understanding and respect.
I would like to touch on the Government’s wider commitment to deliver an accessibility charter, recognising the importance of consistency across all modes of transport. The charter will bring together in one place the guiding principles that underpin the rights and responsibilities of disabled passengers, regulators, enforcement bodies and operators. Research suggests that disabled people are less confident travelling across modes than non-disabled people. We are determined, working together with stakeholders, to change that. We want to empower disabled people to travel easily, confidently and with dignity for their entire journey. A truly accessible transport system cannot rely on a single mode being accessible; it must be focused on the entire journey. That is why later this year we will be setting out our plans to improve accessible travel across all modes, as part of our integrated national transport strategy.
Although we have made progress, we know that for too many people travel on our public transport system and our railways is still not as easy or reliable as it should be. A broken lift, an unexpected platform change or a lack of staff support can turn what should be a straightforward journey into an ordeal. For some, the barriers remain so great that they do not even try. I want to make it clear that that is not acceptable. That is why the Department for Transport will continue to seek every opportunity—through targeted investment, improved infrastructure, policy reform, and partnership with industry and communities—to improve access across the network. Whether it is through the Access for All programme, major station redevelopments or ongoing commitments to accessibility compliance, we will not stop pushing for railways that are fully inclusive.
Valerie Vaz
I would be grateful if the Minister could say how disabled people are counted in the footfall count.
Simon Lightwood
Perhaps I could come back to my right hon. Friend on that—I will consult the Rail Minister and ensure that I get her an accurate answer.
Our vision is clear: a railway that works for everyone; a railway where no one is left waiting on the platform; a railway where opportunity, independence and mobility are not privileges, but rights.
Question put and agreed to.
Draft Data Protection Act 2018 (Qualifying Competent Authorities) Regulations 2025
(1 day, 13 hours ago)
General CommitteesRead Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Department (Sarah Jones)
I beg to move,
That the Committee has considered the draft Data Protection Act 2018 (Qualifying Competent Authorities) Regulations 2025.
It is a pleasure to serve under your chairmanship, Sir Jeremy. This instrument, which was laid before the House on 7 July, specifies the qualifying competent authorities that will be able to apply for a designation notice under section 89 of the Data (Use and Access) Act 2025. Section 89, when commenced, will insert sections 82A to 82E into the Data Protection Act 2018. Although those provisions have already been debated and passed by Parliament, during the passage of the parent Act, in order to place the regulations in context I will briefly summarise their purpose.
Under the 2018 Act, authorities processing for law enforcement purposes and intelligence services are subject to two separate legislative data processing regimes for processing personal data. This precludes a joint controllership between the two entities and makes working together more difficult, especially in the context of public safety and national security. For example, an intelligence service and a police force working together on a joint investigation could not work from a single shared dataset setting out individuals of interest and related intelligence. Instead, each must have their own copy of the data, sharing data back and forth between one another and across data protection regimes to allow each to update their intelligence. This obviously decreases efficiency and reduces joint working capabilities.
There is a clear public interest in enabling closer joint working between law enforcement bodies and the intelligence services in matters of national security, as highlighted by reports into the Fishmongers’ Hall and Manchester Arena terrorist attacks. Once the provisions are in force, qualifying competent authority will, together with at least one intelligence service, be able to apply for what is called a designation notice from the Secretary of State under section 82A of the 2018 Act, where it is required for the purposes of safeguarding national security. This designation notice will allow the intelligence service and qualifying competent authority in question to form a joint controllership for that processing activity.
This change will align the legislation with the position under the Data Protection Act 1998, before the adoption of the GDPR. Under the 1998 Act, joint controllerships between the two organisations were permitted. The Data (Use and Access) Act 2025 inserts section 82(2A) in the 2018 Act, which introduces a power to make regulations specifying which competent authorities are able to apply for a designation notice alongside an intelligence service. Competent authorities are defined in section 30(1) of the 2018 Act as
“a person specified or described in Schedule 7”
to the Act, or “any other person” who has a statutory function for a law enforcement purpose and is therefore capable of processing data under the law enforcement regime.
The Home Secretary is exercising that power by introducing the draft Data Protection Act 2018 (Qualifying Competent Authorities) Regulations 2025, which specify 23 qualifying competent authorities. The regulations have been drafted in consultation with the partners operating in the area of national security. The regulations include competent authorities involved in areas where national security is a consideration. Given the sensitivities involved, the Government cannot go into detail publicly on the rationale behind the inclusion of individual authorities in the list. However, the authorities that have been included are those where there is reasonable potential for a joint controllership to be formed for the purpose of safeguarding national security. The list includes UK police forces—both territorial forces and other branches such as counter-terrorism police and military police—prison and probation services, and other bodies involved in law enforcement and offender management. The Information Commissioner’s Office was consulted on the proposed qualified competent authorities, and confirmed that it was content with those included.
As the threat to the UK’s national security evolves and changes, competent authorities may be added or removed from the regulations. The legislation requires amending regulations to be subject to the affirmative procedure. The UK and its citizens continue to face a wide array of threats from a diverse range of actors. The provisions within this instrument will strengthen the ability of our law enforcement and intelligence services to work more closely to protect our national security. I therefore commend the draft regulations to the Committee.
Matt Vickers (Stockton West) (Con)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I congratulate the Minister on her new role in what I am sure will be the first of many encounters. In what can be a divisive Department, I am pleased to begin with an issue on which we can agree.
The Data Protection and Digital Information Bill, put forward by the previous Government during the last Parliament, sought to enable joint processing between qualifying competent authorities and intelligence services under part 4 of the Data Protection Act 2018. As the Minister summarised, it was rightly recognised that there was an increasing expectation that law enforcement and the intelligence services would work jointly in operational partnerships, particularly in response to lessons learned from the tragic terrorist incidents at the Manchester Arena and Fishmongers’ Hall.
Under the existing regime, it is understandable that sharing data across Data Protection Act regimes proves cumbersome, making the necessary decision making in our national security infrastructure more challenging. Removing those obstacles and allowing partnerships to process data under a single regime is a step to be welcomed. Any measure that enables more effective and efficient use of data to enhance our national security is to the benefit of us all. Indeed, it is essential that we learn from the events of the past. We owe it to the victims of these abhorrent acts of terrorism. As such, we should welcome the change in the Government’s Data (Use and Access) Act 2025 and the regulations debated today.
Regarding joint processing, it has been noted previously that the controls and safeguards under part 4 of the 2018 Act will apply. Although I am aware that each body has expertise to manage the use of data, the creation of a single regime can pose specific challenges. Therefore, considering that some of the data used in such cases may be particularly sensitive, have Ministers engaged sufficiently with the relevant agencies and competent authorities to ensure that they are prepared to use the new rules effectively and without incident? In addition, although the use of designation notices by the Home Secretary is an integral part of the new regime, I must ask Ministers whether they are satisfied that the process for providing notices for joint controllership of specific processing will be effective.
Although I appreciate that, for security reasons, the Minister will not be able to provide details as to why one competent authority has been included, it will be useful to receive assurances that robust systems are in place to ensure that such processes include appropriate safeguards and that the data being used is in line with the notice. These safeguards are critical, as we all recognise the public’s desire for their data to be protected while ensuring that national security is maintained. I therefore welcome the draft regulations and hope they are implemented effectively.
Victoria Collins (Harpenden and Berkhamsted) (LD)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I also congratulate the Minister on her new appointment. The importance of public safety and security is clear. National security is, of course, paramount, which is why we will wholeheartedly support this statutory instrument. That said, data privacy is rightly an ongoing concern for many of our constituents. What mechanism, such as reporting or available statistics, would there be for Parliament to scrutinise the use of these powers to help provide reassurance that the designated notices are being used proportionally and in the public interest?
Sadik Al-Hassan (North Somerset) (Lab)
It is a pleasure to serve under your chairmanship, Sir Jeremy, and I congratulate the Minister on her appointment. The regulations are pivotal to ensuring that our data protection framework continues to meet the needs of public authorities and citizens alike. By designating certain bodies as qualifying competent authorities, we strengthen the capacity to manage and share data responsibly and securely in line with the principles of the 2018 Act.
In today’s digital age, Government bodies need absolute clarity about their roles, especially when processing personal data for law enforcement purposes. The regulations provide precise definitions that maintain our high data protection standards while ensuring compliance with UK GDPR. The regulations strike the right balance between enabling our public authorities to perform effectively, safeguarding citizens’ fundamental rights and protecting our wider national security against threats such as terrorism.
Kit Malthouse (North West Hampshire) (Con)
It is a pleasure to see your wisdom in the Chair, Sir Jeremy. Although I understand the impetus behind the change, I want to ask the Minister one or two questions about it. She and I have traded blows over this agenda in the past. She was my shadow for two years, so I congratulate her on her new position. I am sure she will do a fantastic job.
In considering this change, we have to ask ourselves why sharing was made so difficult in the first place. We have to trust that those who came before us, who put this legislation in place, considered that issue. The shadow Minister, my hon. Friend the Member for Stockton West, said that subsequent events have illustrated the need for agencies to work together more closely on the analysis of data for the prevention of the sorts of incidents he mentioned. Despite that, I think we have to come with a bit of scepticism about what the result of these regulations might be, and what liberties we might be trampling over. My questions are framed in that regard.
I was slightly alarmed by what the Minister said and the contents of the explanatory memorandum, and I was thinking about raising a point of order about the fact that the Government cannot really tell us why the competent authorities have been included in the list. It raises the question of why we are all here. We might as well have had a list that said, “Whoever we decide. Don’t ask questions.” It does seem a bit odd that we are passing regulations, but we are hampered in our scrutiny in asking questions about particular organisations. Nevertheless, I will ask the questions that I have about them and see what the Minister has to say.
First, I wanted to ask about the provosts. The list includes the provost marshals of the Royal Navy Police, of the Royal Military Police and of the Royal Air Force Police, and “The Provost Marshal for serious crime.” I had never heard of that person before, so perhaps the Minister could start by telling us who the provost marshal for serious crime is.
I understand that all the other organisations—certainly the police and chief constables—have very strong and automated controls on the data that they use, not least to the extent, for example, that every access that any individual makes to the police computing system is logged and maintained, and people are very often convicted for irregularly accessing material. However, given that these individuals are military and that we are living with the consequences of a major military data breach that has cost us many billions of pounds and put quite a lot of lives at risk, can the Minister reassure us that the processing of data between civil and military organisations will be done to the same standard, and that it therefore will be safe from leakage?
Regulation 2(o) states that,
“a body established in accordance with a collaboration agreement under section 22A of the Police Act 1996(9)”
can be classed as a qualifying competent authority. What type of body might that be? If we were to have an example of such an organisation, we might be able to form a view on whether it is appropriate for it to be on the list.
I have a question about the inclusion of Revenue and Customs. As the Minister may know, in the old days when Inland Revenue and Customs and Excise were two separate organisations, they had very different cultures. The culture at Customs and Excise was of kicking the door down. They were kind of “Moonfleet”, Daphne du Maurier-type anti-smuggling hard men and women, whereas at the Inland Revenue they were a little more intellectual and professional. In one, they wore suits; in the other, they wore flak jackets. When Gordon Brown amalgamated the two, unfortunately the muscular culture at Customs and Excise was translated and taken over at the Revenue, to the extent that they now both have more kick-in-the-door characters. So I am concerned about the amount of sensitive personal data that Revenue and Customs control at the moment; about the culture of that organisation and its increasing aggression over the last 20 years or so; and what implication that is going to have for the rest of us.
I understand that the Minister cannot tell us why this is being introduced, but is she able to tell us whether Customs and Excise will, as a result, be asked to routinely scan millions and millions of datapoints and people’s personal financial data to look for patterns of movement and transactions, for example? Or is this for use in relation to specific investigations? My general view is that, as with most things, the British people will accept a specific investigatory sharing regime, but may not accept a general fishing regime.
The same is true of the Land Registry, which is on the list. I understand that in the search for illicit funds or activity, specific inquiries and the processing of data is required, but on general scanning, particularly as the Land Registry becomes more and more digital and automated, I am nervous about us moving to a kind of American-style National Security Agency approach, where billions if not trillions of datapoints are collected on a regular basis and analysed by computers—artificial intelligence or whatever it might be—to look for patterns of behaviour. That may well be the way that we are going, but if we are going there, we should be transparent with the public about what we are doing, notwithstanding that the Minister cannot tell us why or what today.
I have two further questions. On supervision, what will the supervision over this necessarily covert process be? Does the ICO, which I presume will be the supervisory body, have the right security clearance at the right level that will allow it to access this operation of data sharing to the extent that it can satisfy itself that the statement that the Minister has made—that we are in compliance with all our human rights obligations and in compliance with the law—will be looked at? Within the Department, similarly, what will supervision of the effect of this data sharing be?
Thirdly, given that this will be new, is it likely to be brought to the Intelligence and Security Committee for review of its operation? That would be at least three layers of supervision over what is quite a large step up in capability—it is not unwelcome, but it is a large step up—by the Security Services and others.
Finally, I want to ask about risk assessment. The sharing of data between organisations could present a greater risk of leakage, or alternatively it could mean, if only one of them is maintaining the data to which the other has access, that there is less likelihood of leakage. We have talked about efficacy. The Minister did not say anything about the risks and benefits from a data security point of view.
As we have learned to our cost recently with the military, the transfer of data between organisations, whether sharing or otherwise, does run the risk of it falling into hands that it should not. Will these organisations therefore have to subscribe to a tighter data control regime than they would have done, to make sure that the possibility of that leakage is minimised?
Martin Wrigley (Newton Abbot) (LD)
It is a pleasure to serve under your chairship, Sir Jeremy. I also congratulate the Minister on her new appointment. I thank her for explaining what is going on in this secondary legislation, because I read it a number of times and did not really get it until I listened to her explanation. It raises a number of questions. The answers may be specified elsewhere; if so, I apologise for asking obvious questions.
On the designation notice that these organisations can now ask for, is there a stipulation on the number of agencies in the list that can come together for a single designation notice with an intelligence agency? Is it just one, is it many or is it all of them?
Is there a duration on the designation notice? Is this something that can be applied for for a week, for a year or forever? Clearly, if it is forever, and all of them, we have a very interesting situation here.
Will the data used in this way be allowed to be analysed in the new Government data-mining AI systems, such as the Palantir systems? There is clearly a danger of leakage into the health systems, in which they are also used. That brings extra concern about crossover of data between those, especially under AI data mining. What reassurances can we give our constituents that that will not happen?
Sarah Jones
I thank hon. Members and hon. Friends for a detailed inspection of this SI. It is right and proper that that inspection should happen; that is the point of democracy and I welcome the questions. To start with, I want to set out the principles to respond to some of the broad themes. First, there is a national conversation about data. We all worry about what happens to our data, where it goes and how it is held. There are three vehicles through which data flows that we are looking at. One is GDPR, which we all know and talk about often; one is part 3 of the DPA 2018, which applies to the police, the CPS and the courts; and one is part 4 of the DPA, which applies to GCHQ, MI5 and MI6. We are enabling sharing between the latter two.
The principle I want to stress is that it is not the case that somebody will ask for this data sharing and it will be given randomly. They will have to make the case and demonstrate that they need continued real-time data sharing. At the moment, one authority can ask the other for data, and they might need that data as a one-off. This instrument is designed to be used for continued real-time access to data where that data needs to be shared. It has come from what we learned from incidents such as Manchester Arena and Fishmongers’ Hall, where real-time sharing of data is needed. That is the principle.
I want to reassure colleagues that much consideration has been given to how this will operate and to make sure that data sharing is done correctly. As I said in my opening remarks, the Government consulted the Information Commissioner, which has confirmed that it is content with what we are laying out today. I hope that gives reassurance.
The right hon. Member for North West Hampshire asked whether this instrument will come to the Intelligence and Security Committee and about being satisfied that the Department was overseeing in an appropriate way. I am happy to write to him with more information. He will appreciate that a detailed debate on this took place prior to my arrival, but I have studied and talked with officials at length on the premise of this piece of legislation and I am very satisfied that the checks and balances are there.
I was asked whether there was a consultation with the bodies listed; there was. There was a question about what the provost marshal is. He—I say “he”, although I do not know whether it is a “he” or a “she”; I suspect it may be a “he”—is the head of the military police for each service. That is from the Police Act 1997. Again, I am happy to share more information on that with the right hon. Gentleman.
Another thing that might be reassuring to Members is that the notices will be made public. It is not that there will be no controls once the data is shared—the ICO oversight remains, so there will be a regime within which that data is controlled. Members should be reassured about that.
On the question why some of the bodies are on the list and others are not, as I said in my opening remarks we cannot comment on the rationale behind each individual authority included on the list, but I hope that my explanation of the premise from which we have approached this satisfies hon. Members. However, of course there is no restriction—this being a democracy—on Members’ continuing to ask these kinds of questions and making sure that we are doing everything that we need to do.
Kit Malthouse
The Minister said that these notices will be published; will these bodies be general powers or specific powers? Will the Government say, “We’re going to grant a notice on this for six months for a specific purpose,” or will it be just, “We’re going to let the Army share it with whoever, in perpetuity”? So, are the powers time limited?
Secondly, while I understand that the Minister cannot explain to us why, who or what regarding these organisations, as the hon. Member for Newton Abbot said, all of these organisations will be processing that data on third-party software, much of which will be owned by private corporations, many from overseas. Does this power extend to them, by proxy, because they are contractors to the primary organisation—which is, necessarily, by its nature, public sector—or will there be firewalls and controls therein as well?
Sarah Jones
I thank the right hon. Member for that intervention. As a couple of Members have asked about it, I was just coming to the point about the duration of time that these powers are given for. The duration lasts for up to five years, but it is subject to annual review by the Secretary of State.
The right hon. Member asked about the number of organisations under a notice. There is no specification on the number; it simply must be at least one competent authority and one intelligence service wanting to share the data. I should have said that the Intelligence and Security Committee is able to request information from the intelligence services under its purview, so these arrangements would not be excluded from that. I hope that is reassuring to the Committee.
To re-emphasise, there is a process here: the ICO will remain with the oversight and have the relevant security clearance, and it already oversees UK intelligence agencies. I can reassure Members that the right checks are there to ensure that this data is not given more widely than it should be.
I hope that that reassures hon. Members that these regulations are needed, and that they respond to our need to be able to act in real time in moving situations to protect the public, which is the fundamental principle behind our doing this. I hope that Members will understand that. I commend the regulations to the Committee.
Question put and agreed to.
Adults at risk due to gambling addiction
Pension Schemes Bill (Fifth sitting)
Tuesday 9th September 2025
(1 day, 13 hours ago)
Public Bill CommitteesPension Schemes Bill 2024-26 View all Pension Schemes Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 9 September 2025 - (9 Sep 2025)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Chair
We are now sitting in public and the proceedings are being broadcast. Before we begin, I remind hon. Members to switch electronic devices to silent. Tea and coffee are not allowed during sittings.
Ordered,
That the Order of the Committee of Tuesday 2 September be varied, after paragraph 1(d),
by inserting—
“(da) at 9.25 am and 2.00 pm on Tuesday 16 September;”.—(Taiwo Owatemi.)
Clause 27
Authorisation of consolidator schemes etc by the Pensions Regulator
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
It is a pleasure to serve under you today, Ms McVey. We recommence our consideration of the small pots part of the Bill. I thank all Members for their engagement during the sittings last week.
Clause 27 is fundamental. It allows regulations to be made to create an authorisation and supervisory framework for pension schemes to become authorised consolidators. This framework will allow master trusts to apply to the Pensions Regulator to become authorised, on the basis that they meet certain conditions and standards, including the value for money test we discussed at length last Thursday.
The clause also ensures ongoing oversight. If a scheme no longer meets the standards, regulations can enable the Pensions Regulator to step in to require the trustees to take prescribed steps and, ultimately, to withdraw authorisation if necessary. That ensures better outcomes, not just fewer pension pots. The clause represents a vital safeguard in the small pots framework.
Clause 28 provides a definition of a “consolidator scheme” and “consolidator arrangement”. A “consolidator scheme” can either be an authorised master trust or a Financial Conduct Authority-regulated pension scheme that appears on a designated list published by the FCA. A “consolidator arrangement” refers to a specific part of the scheme that is intended to receive small pots.
This reflects the structure of pension providers that operate in the UK. Some pension providers offer multiple arrangements within their scheme whereas others may have a single arrangement or offering. The clause caters for both scenarios to ensure that regulators can focus on the particular arrangements that will require authorisation.
To simplify: in practice, all schemes will be authorised by specific arrangement, but there will be some occasions where schemes may only have a single arrangement so the whole scheme will be authorised. By having at least one authorised arrangement, schemes or providers will be authorised consolidators.
Mark Garnier (Wyre Forest) (Con)
This is a very uncontentious and highly technical part of the Bill. We have no objections to any of these provisions and so will be supporting them.
Steve Darling (Torbay) (LD)
As the Liberal Democrat spokesperson, I echo that this is a direction of travel that we welcome. The vast majority of the proposals that are before us today are uncontentious. They follow the correct direction of travel in growth and change that we want to see in our pensions system in the United Kingdom.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28 ordered to stand part of the Bill.
Clause 29
Further provision about contents of small pots regulations
Torsten Bell
I beg to move amendment 36, in clause 29, page 27, leave out lines 14 and 15.
This amendment clarifies that small pots regulations may confer rights of appeal more broadly than just in relation to the refusal of an application for authorisation.
The Chair
With this it will be convenient to discuss the following:
Government amendments 37 to 40.
Clause stand part.
Torsten Bell
Clause 29 will make the small pot consolidation framework work in practice, through allowing the small pots regulations to cover a range of operational, administrative, data protection and consumer protection matters. It enables the Pensions Regulator to charge a fee for authorisation and gives applicants the right to appeal if their application is refused. Regulations will be able to require trustees and scheme managers to maintain and improve records, and they will protect members from high transfer fees. The clause enables the delegation of functions and powers to the Pensions Regulator, the FCA and the small pots data platform operator. It ensures that data protection and privacy obligations are respected, while allowing necessary data processing to support the scheme’s efficient operation.
The clause will allow the Government to amend existing legislation to support the small pots consolidation framework. Examples of uses of the power include giving the Pensions Ombudsman new powers to investigate member complaints, and ensuring that the small pots data platform is properly funded through the general levy. Pensions law is complex and technical, and needs to evolve with time, so the Government need the flexibility to respond to those changes and regulators’ operational experience without having to table a new Bill every time.
The Bill clearly sets out the multiple default consolidator framework. With targeted amendments, the clause will allow us to fine-tune the framework over time, ensuring operational effectiveness. Any use of so-called Henry VIII powers will be subject to the affirmative procedure. The clause is essential for the practicality, reliability and integrity of the small pots consolidation framework to ensure it is fit for purpose now and for the future.
The Government amendments to the clause are purely technical drafting improvements. Amendment 36 clarifies that appeal rights for schemes are not limited solely to decisions regarding an application for authorisation, so one could appeal on other grounds. Amendment 37 provides further clarity on the liability framework that will be established to ensure that members are protected. It makes it clear that the small pots data platform operator or the trustees or managers of a relevant pension scheme can be made responsible for paying compensation to an individual who has suffered a loss as a result of a breach of the small pots regulations. Amendments 38 to 40 take account of the Data (Use and Access) Act 2025, which was passed by Parliament subsequent to the introduction of this Bill. The amendments do not alter the policy, and I ask the Committee to support them.
Mark Garnier
Perhaps it is exciting for those who enjoy dry reading. We in the Opposition have no objections.
Amendment 36 agreed to.
Amendments made: 37, in clause 29, page 27, line 30, leave out—
“a relevant person, other than the FCA,”
and insert—
“the small pots data platform operator or the trustees or managers of a relevant pension scheme”.
This amendment ensures that the FCA cannot be required to pay compensation under small pots regulations.
Amendment 38, in clause 29, page 27, line 39, leave out “Subject to subsection (4),”.
This amendment is consequential on Amendment 39.
Amendment 39, in clause 29, page 28, line 3, leave out subsection (4).
This amendment removes provision that is no longer needed because of the general data protection override in section 183A of the Data Protection Act 2018, which was inserted by section 106(2) of the Data (Use and Access) Act 2025 and came into force on 20 August 2025.
Amendment 40, in clause 29, page 28, leave out lines 8 and 9.—(Torsten Bell.)
This amendment is consequential on Amendment 39.
Clause 29, as amended, ordered to stand part of the Bill.
Clause 30
Enforcement by the Pensions Regulator
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendment 41.
Clause 31 stand part.
Government amendment 42.
Torsten Bell
Clause 30 seeks to ensure that the rules and conditions set by the regulations are, in practice, followed. These regulations can allow the Pensions Regulator to issue three types of notices: a compliance notice, requiring a person to take specific steps to comply; a third-party compliance notice, directing someone to ensure another party’s compliance; and a penalty notice, imposing a financial penalty for non-compliance or a breach of the regulations. If a scheme fails to comply with the regulations or with a notice issued under them, the Pensions Regulator can impose a financial penalty capped at £10,000 for individuals and £100,000 in other cases. The clause also enables regulations to provide for appeals to the first-tier or upper tribunal, ensuring procedural fairness and accountability. All those are standard approaches to pensions legislation.
Clause 31 gives the Treasury the power to make regulations to enable the FCA to monitor and enforce compliance with the small pots consolidation framework for contract-based schemes. It ensures that the FCA can act decisively to protect consumers and uphold the integrity of the system. Clauses 30 and 31 ensure consistent standards across the pensions market as we look to enforce these measures. Any regulations made under clause 31 must go through the affirmative procedure, ensuring parliamentary oversight.
Amendments 41 and 42 seek to clarify the definition of the term “FCA regulated” when referring to an authorised person in the context of the legislation. The amendments seek to provide greater clarity by ensuring harmony and removing any ambiguity between clause 30(1) and clauses 31 and 34. They ensure that the Pensions Regulator is not inadvertently prevented from regulating a trustee of a pension scheme solely because that trustee is also regulated by the Financial Conduct Authority in a separate capacity. The amendments are purely technical clarifications, and I ask the Committee to support them. I commend the clauses to the Committee.
Mark Garnier
Again, I have no real comments, apart from to ask the Minister, perhaps when winding up, if he could explain how the Government came to the penalty levels of £10,000 for individuals and £100,000 for others. It would be useful to understand what the thinking was behind that.
Kirsty Blackman (Aberdeen North) (SNP)
My question was not dissimilar to the shadow Minister’s question on the amounts of the penalties—£10,000 for an individual and £100,000 in any other case. There is no delegated authority to raise it beyond those levels. There is an ability to set the amounts, provided they do not go above those. Would the process have to be in primary legislation should the Government wish to raise it above those levels? I am not generally in favour of a level of delegated authority, but if we end up in a situation where inflation is out of control, £10,000 may not seem a significant amount for an individual and £100,000 may not seem significant for a larger organisation. They may not be enough to prevent people or create the level of disincentive we wish to see. Have the Government looked at whether £10,000 and £100,000 are the right amounts?
On the clarification about FCA regulation, and the fact that if somebody is FCA regulated in another capacity, it may stop them from being subject to this, it is absolutely sensible that the Government have tabled the amendments. I am happy to support the changes and the clauses.
Torsten Bell
I thank the hon. Members for Wyre Forest and for Aberdeen North. The main question raised is about the level of the fines. To provide some context, the answer is yes—that would need to be amended by further primary legislation; there is not a power in the Bill to change that. It is an increase on previous levels of fines for individuals and organisations—from £5,000 to £10,000 for individuals, reflecting the high inflation we have seen in recent years. On that basis, it gives us certainty that we have seen a substantial increase, and we would not need to change it in the near future, but I take the point that in the longer term, we always need to keep the levels of fines under review, and we will need to do that in this case. I hope that provides the answers to hon. Members’ questions.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Enforcement by the FCA
Amendment made: 41, in clause 31, page 29, line 38, leave out subsection (4) and insert—
“(4) For the purposes of this Chapter a person is ‘FCA-regulated’ if they are an authorised person (within the meaning of the Financial Services and Markets Act 2000) in relation to the operation of a pension scheme.”—(Torsten Bell.)
This amendment clarifies that the definition of “FCA-regulated”, in relation to a person, refers to the person being FCA-regulated in respect of the operation of a pension scheme (as opposed to in a capacity unrelated to small pots regulations).
Clause 31, as amended, ordered to stand part of the Bill.
Clause 32
Power to alter definition of “small”
John Milne (Horsham) (LD)
I beg to move amendment 4, in clause 32, page 30, line 12, at end insert—
“(4) The Secretary of State must, at least once every three years, review the amount for the time being specified in section 20(2) to consider whether that amount should be increased, having regard to—
(a) the effectiveness, and
(b) the benefit to members
of the consolidation of small dormant pension pots.”
This amendment would require the Secretary of State to review and consider increasing the level of small pension pot consolidation every three years.
The purpose of the amendment is to require the Secretary of State to review at least once every three years the threshold for small dormant pension pot consolidation. It aims to ensure that the level set in clause 20(2) remains effective and relevant over time. The Minister will be aware that we have already considered the right level at which to set the consolidation; we tabled amendment 262 as a probing amendment, which would have changed the small pot consolidation limit from £1,000 to £2,000. As we have discussed, industry has a very wide range of views on what would be the best figure.
However, this amendment asks for a review, not a particular figure. As before, we do not intend to push it to a vote. To us, a formal review process seems sensible, but whether it should be set at three-year intervals or any other figure is open to question. Given the lack of certainty about what figure industry would like, it seems a good idea to review the threshold after we have seen the measure working in practice.
The pensions landscape evolves quickly, with more job changes and rising numbers of small inactive pots. Therefore, a static threshold risks becoming out of date and undermining the policy’s effectiveness, whereas a regular review keeps the system responsive to members’ needs. It would consider effectiveness—whether consolidation is working to reduce fragmentation and improve efficiency, and the benefit to members, so whether savers are seeing clearer statements, reduced charges and better value for money. It would also simplify retirement saving by reducing the number of scattered small pots, would help members to keep track of their savings and avoid losing pensions altogether, and would improve efficiency for providers, which could reduce costs for savers.
I stress that the amendment does not dictate that there should be an automatic increase. It simply requires the Secretary of State to consider whether the amount is still appropriate. Therefore, in our view, it strikes the right balance between flexibility and accountability. To summarise, this measure would keep consolidation policy up to date, effective and beneficial for pension savers. A regular, three-year review is a simple, proportionate step to ensure that the system works as intended.
Kirsty Blackman
I am happy to support the Liberal Democrat amendment. I have already mentioned the Regulatory Policy Committee’s impact assessment—it considers the monitoring and evaluation plan to be weak, saying:
“The policies are all due to be reviewed in 2030. More detailed plans are needed, outlining success metrics, reporting requirements, and methodologies, across the policies.”
The amendment fits quite neatly into what the RPC said, which looks for an understanding and acceptance that there needs to be regular reviews, given that the Government have not committed to a three-year—or shorter—time period on this issue.
There seems to be widespread support for the small pots consolidation across the House. This amount has been picked, and as I said in a previous sitting, there is not necessarily a perfect answer. It could be that change is required, or that all the companies and organisations that are consolidating small pots immediately manage to do it amazingly. It could happen as smoothly as possible, as a result of which the Government could decide to increase the threshold.
I think that compelling the Secretary of State to look at this is completely reasonable to ensure that they are doing it on a relatively regular basis, so that the threshold can be changed if necessary. There is potentially widespread support across the House for ensuring that there is a requirement to monitor the threshold on an ongoing basis. It is not that we do not trust, agree with or appreciate the Secretary of State’s work, but it would give us a level of comfort that it would be done regularly should the Minister accept that, consider something similar on Report or, at the very least, make a commitment from the Dispatch Box that a written statement will be made to Parliament on a fairly regular basis explaining the reasons for keeping or changing the level.
Torsten Bell
I thank the hon. Member for Torbay for tabling the amendment. The Government share his commitment to ensuring that the pot limit remains appropriate. As we have just heard, it is a matter of consensus, and it is good to debate how we best do that. The Government’s view is that the amendment is not necessary at this stage. Clause 32 already enables the Government to undertake a review at any time. That is a deliberately flexible approach that allows us to respond to developments in the market—not least reflecting on the question from the hon. Member for Aberdeen North about inflation—but also to any other material changes, and it empowers the Government to act when needed.
The amendment risks creating unintended consequences with a rigid cycle of Government reviews, which might mean that reviews do not happen when there is a good reason for looking at the matter, and that the Secretary of State is forced to carry them out when there is no rationale for doing so. We favour a more flexible approach. I take seriously the request for clarity that there will be regular reviews, and I can give that clarity. That is the intention.
A wider question has been raised about the success of the policy and its monitoring, which is separate from the level of the threshold. Changes to the threshold might be one response to success metrics, but others might be about the operation of the consolidation process more generally. I commit to actively monitoring those—not least what is happening to people’s pots as they are moved, how people are responding to that and levels of awareness. That is exactly what we need to be doing, irrespective of what happens on the scale of the threshold over time. There is cross-party consensus on the objective here. We have taken a slightly different view on the flexibility of that review and how often it happens, but I give all hon. Members a commitment that that will happen.
Kirsty Blackman
I have just one more brief comment. It drives me completely mad that whoever is standing at that Dispatch Box seems to believe that they will be in government in perpetuity. Given that this is the second colour of Government I have faced across the Committee floor, it may be that the Minister and his Secretary of State—who has changed, by the way—are very keen on doing a regular review, and I appreciate the Minister committing to it. However, it is not that easy for him to commit a Secretary of State of a different political stripe. Therefore, to give us all certainty, it would be great if the Minister went away and considered the possibility of including a more regular review on Report, so that a Secretary of State of any party is required to conduct one more regularly.
Torsten Bell
I thank the hon. Member for that comment. The nature of every piece of legislation means that a future Government can take a different decision. Thanks for the reminder of the nature of British politics—that is how it operates. I am slightly more relaxed than she is, because there will be significant pressure from the industry, and from everybody, to keep this under review. That is not a matter of controversy. It is conceivable that there may be a Government who are steadfastly against ever again looking at the small pots threshold, but having lived through the last 15 years, I would put that low down the list of uncertainties in British politics. However, I take the intention behind the hon. Lady’s point, and I promise never to assume that Labour will win every election from now until eternity.
John Milne
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 33 to 36 stand part.
Government amendment 43.
Clause 37 stand part.
New Clause 36—Automatically amalgamated pension pots—
“(1) The Secretary of State must by regulations provide for the establishment of a scheme to ensure that an individual’s pension pot is linked to the person and upon a person’s change in employment the pension pot automatically moves into the pension scheme of the new workplace.
(2) All employees in the UK will be automatically enrolled into the scheme defined in subsection (1) upon its establishment but must be given the option of opting out.
(3) Where a person opts out, they are able to nominate their qualifying scheme of choice for pensions contributions.”
This new clause allows pension pots automatically to follow members from job to job, consolidating with each new workplace scheme rather than relying on a single lifetime provider.
Torsten Bell
The clause provides the flexibility, as I have just said, to increase or decrease the threshold without requiring new primary legislation, enabling the Government to move quickly and efficiently as developments—whether it be wage growth or changes in contribution patterns—change our pensions landscape. Under the clause, any change to the pot limit must always be approved by Parliament through the affirmative procedure, something that we also discussed last week.
The Government are committed to engaging with industry and consumer groups to ensure any adjustments are evidence-based and informed by the relevant data at the time, enabling us to consider wider impacts such as market competition. Under clause 32, the Secretary of State must undertake public consultation, publish details of the proposed amendments and the reasons for making the proposal, and consider any representations made—putting flesh on the bones on the kind of review that would take place, as we have just discussed.
New clause 36 seeks to introduce a new provision to the Bill, which would establish a “pot follows member” model for pension consolidation. The new clause proposes that, on changing employment, an individual’s pension pot would automatically transfer into their new workplace’s pension scheme. This proposal is not aligned with the Government’s established policy direction, and it would present significant practical and operational challenges, although I recognise that that approach has been discussed extensively over the last 20 years. The approach taken in the Bill has been shaped through extensive engagement and formal consultation with industry, regulators and consumer groups. As part of that policy development work, largely under the last Government, they and we carefully considered the “pot follows member” approach, including its potential benefits and risks. Our impact assessment shows that the multiple default consolidator solution in the Bill is projected to deliver greater net benefits. The evidence in the impact assessment supports our view that that route offers the best value for savers and for the system as a whole.
New clause 36 would require a fundamental overhaul of the current framework that the Bill seeks to introduce. It is not consistent with the rest of the Bill. It would introduce a parallel mechanism that risks duplicating effort, creating confusion and undermining the coherence of the consolidation system. Two of its main downsides are significant administrative barriers for employers, if employees choose to opt out, and the risk that pots are transferred into schemes that offer poor value for money—or, at least, poorer value for money than the ones they are sitting in before they move between employers. For those reasons, I ask the hon. Member for Wyre Forest not to press new clause 36.
Clause 33 makes it clear that the small dormant pots consolidation measures in this chapter apply equally to pension schemes run by or on behalf of the Crown and to Crown employees, as we have discussed previously. Clause 34 provides clear definitions for key terms used throughout the small pots legislation to ensure clarity and consistency of interpretation, and clause 35 provides a definition of what constitutes a pension pot. That might be thought to be straightforward, but for the purposes of small pots consolidation we want to provide clarity on the accurate identification and treatment of individual pension pots. To provide an example, if someone is enrolled into the same pension scheme through more than one job and the scheme keeps the accounts separate, each is treated as a separate pension pot so that they can be consolidated together.
As Members will be aware, the Pensions Regulator oversees the trust-based schemes and the Financial Conduct Authority oversees contract-based schemes. Clause 36 amends the Financial Services and Markets Act 2000 to ensure that the FCA has the powers required to support the small pots consolidation framework through the existing financial regulatory system. This is a vital enabling provision to provide the FCA with the necessary statutory powers to regulate contract-based schemes that wish to act as authorised consolidators in the years ahead. It allows the FCA to make rules requiring pension providers to notify them if they intend to act as a consolidator pension scheme, and it allows the FCA to maintain a list of consolidator schemes and to apply appropriate regulatory standards to them.
More broadly, clause 36 ensures that members of FCA-regulated pension schemes benefit from the same level of protection, transparency and accountability as those in the trust-based system, while also avoiding regulatory gaps and ensuring that all consolidator schemes, regardless of their structure or legal framework, are subject to robust oversight.
Consistent with my arguments on clause 36, clause 37 repeals unused provisions of the Pensions Act 2014 related to automatic transfers, also known as “pot follows member”. This is tidying up the statute book. It was the previous Government who initially legislated for “pot follows member”, but they then decided that that was not the policy they wished to pursue and moved away from it between 2014 and 2024. The amendment recognises that and makes sure we do not have powers on the statute book that confuse the situation.
Finally, Government amendment 43 is a minor and technical amendment necessitated by the repeal of schedule 17 to the Pensions Act 2014 by clause 37(1)(b) of the Bill. The amendment is necessary to update the statute book and clarify a reference in section 256 of the Pensions Act 2004, which otherwise would have been unclear and was making hon. Members nervous. The amendment does not alter policy, and I ask the Committee to support it. I commend clauses 32 to 37 to the Committee.
Mark Garnier
I will speak to our new clause 36. I am grateful to the Minister for his comments; I will come to those in a minute. The Government dropped plans for the lifetime provider or “pot for life” model, which would have allowed individuals to direct all workplace pension contributions into a single, personally chosen pension pot throughout their career. That was first proposed by the Conservative Government. Although we appreciate that the initial lifetime pot model has not had support from the current Government or, to be fair, from the industry, we believe there is much merit in exploring a model that would allow for pensions to follow individuals between jobs. The new clause would ensure that fragmented small pots are not left as workers move between jobs. By changing our current proposals from a lifetime pot to a magnetic pot proposal where the pot follows the individual, we hope we can bring down some of the administrative costs of the initial lifetime pot proposal.
Our new clause 36 will provide for a pension pot that would follow members from job to job, consolidating with each new workplace scheme rather than relying on a single lifetime provider. This approach could reduce fragmentation while retaining the advantages of employer oversight and collective governance. This would have similarities with the Australian system, where a person can staple to their first chosen pension provider so that it follows them from job to job. That helps to reduce the administrative burden on individuals and the number of small pots, and that can reduce costs for consumers and help the overall consolidation of the market. These changes have been backed by some in the industry, including Hargreaves Lansdown, which has said that having a single pot would simplify someone’s pension investment, bringing transparency and clarity. It has said that for those who move jobs frequently, a single pension pot would be invaluable.
The Minister made a couple of points. The first was about the substantial overhaul of the system to be able to deliver reform. Although I appreciate that this may be outside the scope of the Bill, we should not worry about substantial overhauls to make things better for people who are saving for their retirement. It is incredibly important that we get this right. Just because it is a lot of work does not necessarily mean it is a bad thing to do, so I urge him to think about it.
The Minister made a very important point: somebody could move from one job to another and find that their pension moves from a fund that offers good value for money and is performing well to a fund that is performing worse. But exactly the opposite is also the case. If somebody frequently changes jobs, the law of averages and statistics means that over their lifetime they will get the average rate, which means they do not get stuck in one or the other. One would cancel the other out—it is a maths problem.
The Minister has made his points. This is not something we want to press, but we feel very strongly that the Treasury and Treasury Ministers should think very carefully about it, because, as I say, hard work is not a reason not to do the right thing. There is much more support from the industry for the magnetic pot rather than the lifetime pot, which stays with one provider.
Mr Peter Bedford (Mid Leicestershire) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. As a proud Englishman, it is not often that I admit the Australians are better than us at something. I am talking not about cricket, but about the immensely important issue of pensions adequacy. The Australians do it better, and what underpins their success is the super stapling model, a system that fundamentally changes how savers interact with their pensions. That is why our new clause 36 seeks to follow in Australian footsteps by establishing a model that would automatically amalgamate pension pots through an individual’s working life. Although I recognise and commend the Government’s work on small pot consolidation, I believe that real engagement and adequacy benefit lies in moving towards a lifetime pension pot model. It is a bolder, more engaging and more adequate model that would benefit pension funds and savers alike.
Steve Darling
As Liberal Democrats, one of the key lenses through which we look at the legislation is: how does it simplify the world for those who are not the most financially literate savers into their pensions? As Liberal Democrats, we strongly support the “pot follows member” approach, as it would simplify matters for people. It would ensure a clearer mechanism for savers to be aware of the level of their pension as their life moves on, and allow investments to be drawn together more easily. It would be interesting to hear the Minister’s reflections on that, and on why the Australian model is unsuitable for the United Kingdom.
Rebecca Smith (South West Devon) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. I want to add a few things to what my hon. Friends have said, and to reflect on the Minister’s rejection of our new clause as a significant administrative burden. I think we are talking about two sides of the same coin, because to have to keep hunting out small pension pots is a little like looking for things in the dark.
First, we are effectively advocating for a “Who Wants to be a Millionaire?” approach, where someone banks at each stage. I have done that while moving jobs over my lifetime, but I am fairly financially literate. It would be helpful if there were a box to tick on a form when changing job to say, “Yes, I want to move it to this company,” a bit like we do with our P45—we are quite capable of taking our tax with us from job to job. If there were a way of taking our pension with us as well, that would be helpful.
As my hon. Friend the Member for Mid Leicestershire said, that approach would put ownership in the hands of the employee, and it would mean that they did not have a niggling feeling in the back of their mind that they had missed a pot that they had forgotten about. Anything to enable people to have ownership of that pot, rather than be constantly on the back foot trying to hunt it down, would make significant sense. Allowing people to choose rather than having to accept what is offered to them would be incredibly helpful. Ultimately, it is up to them to do what they wish, but they would at least have the choice.
We heard a lot in the evidence sessions about the challenge of communication. We have seen that with Equitable Life and all sorts of other things to do with pensions. When someone changes employer, if there were a simple way to say, “I wish to take the pension with me to the new job,” that would reduce, not increase, the administrative burden. I appreciate what the Minister said, but although we are not looking to push our new clause to a vote, it is an incredibly pragmatic suggestion that warrants further reflection.
Torsten Bell
I thank hon. Members for their reflections. I agree with the sentiment of what everybody has put forward, including the hon. Member for Mid Leicestershire—apart from his worryingly weak patriotism.
Torsten Bell
It was self-professed weak patriotism. But the hon. Gentleman is completely right to raise the adequacy issue, which is obviously the role of the Pensions Commission, launched in July, to take forward. He and several others are also right to say that making things easier for savers is a really important objective. That is what the pensions dashboard aims to do in the coming years as well.
Let me make a set of reflections directly on the question being raised. To be clear, the policy in 2014 was “pot follows member”. That is also the policy within new clause 36. The policy being more supported here is a lifetime pot, which is a different policy. The “pot follows member” is still that the employer chooses the pension scheme and the pot moves to the new employer’s scheme as the employee goes, so it is still an employer-to-a-single-scheme model. The lifetime provider model, also advocated by many in the industry but never part of Government policy—it was not in the 2014 Act—is that each individual holds a pension pot, and, on joining an employer, provides the details of that scheme to the employer, and the employer then pays to multiple pension schemes whenever it does its PAYE.
The comments I made refer to the “pot follows member” approach. There is a consensus across the industry that that is not the right way to go; I totally hear the points made in favour of a lifetime provider model. That is not the approach being taken forward by this Bill, but it needs to be kept under review in the longer term. I give hon. Members the reassurance that I will continue to do that.
Mark Garnier
I think the Minister has got this the wrong way round. It was the lifetime pot, which was being paid into as people went around, that the industry did not like, because that was administratively quite difficult. The stapled pot—stapled to the lapel, or whatever, to be dragged around like the Australian one—is what we are proposing this time round, which is the new version that the industry does agree with. I think the Minister might have got his notes upside down.
Torsten Bell
Never! No. We should clarify what we mean by “industry”: in a lifetime provider model, employers take on a significantly greater administrative burden, because they have to engage with potentially every pension scheme in the country. Admittedly, we are limiting the number of those in future, but still, that is what employers find burdensome about a lifetime provider model. That was the preferred model of the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) when he was Chancellor, but it was never actioned as Government policy.
As I said before, the 2014 Act was about “pot follows member”—for good reason, to try to address the small pots worry. I hope that that at least reassures the hon. Gentleman that my notes were the right way up.
Kirsty Blackman
I am now entirely confused. Can the Minister please clarify for all of us what the Bill actually does in terms of the consolidation?
Torsten Bell
I am glad we are all thoroughly confused. Three broad approaches have been set out to this small pots problem. The first is the one that the Bill takes forward, which is the multiple default consolidation solution—the automatic sweeping up of small pots into consolidated schemes to make everyone’s lives easier. Members would have one large scheme, or several larger schemes, but no really small schemes that they had to consolidate themselves. They could then choose to consolidate those larger schemes as they wished; there is a debate to be had about the size of the threshold in future. That is an automated approach.
One thing that is really important, about the point on average returns made by the hon. Member for Wyre Forest earlier, is that this is not about average. A scheme can only be a consolidator if it offers good value, so a pot cannot be swept into one that does not.
There has been much debate about other approaches over the years, and I have tried to distinguish between two of them. They aim to provide more of what has been debated here, which is slightly more ownership of one pot by the individual. However, “pot follows member” is, in practice, still maintaining the relationship between an employer and a single provider. It is not the individual but the employer who chooses the scheme. That is the approach we are rejecting today.
There is then a longer-term discussion about whether there are attractions to a lifetime provider. That is the case in some of the countries that have been mentioned—the “stapled to your lapel” model—where it is the individual who chooses their provider; obviously to some degree individuals can opt out now if their employer is happy. That is not on the table here. It needs to be considered, but it is a much more fundamental change to the relationship between the employers and the pension schemes.
Kirsty Blackman
I thank the Minister for that clarification. These are almost two different stages in the same process: we need to do the consolidation of the small pots right now, and then look at what we are going to do so that small pots will not ever exist and nobody will end up with a small pot, because we do one of the two options or some other option presented for the next step.
My understanding is that if we were to move to what the Conservatives have proposed in new clause 36, that would solve future problems but probably not deal with the situation where somebody has five small pots already. It does not schoomp them all together—I do not know how you are going to write that, Hansard; I am really sorry.
I appreciate what the Minister says about ensuring that the next step is kept under review and not automatically ruling out some of the options presented for the future. I tend to agree that we need to get this bit done—get rid of all those tiny pots that are dormant right now—and then move on to having that discussion, perhaps as part of the sufficiency and adequacy discussions, so that we have a pensions system that ensures that people are as well off as they possibly can be in late life.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
Clause 34
Interpretation of Chapter
Amendment made: 42, in clause 34, page 31, line 1, leave out
“No. 42, ‘FCA-regulated person’”
and insert
“‘FCA-regulated’, in relation to a person,”—(Torsten Bell.)
This amendment is consequential on Amendment 41.
Clause 34, as amended, ordered to stand part of the Bill.
Clauses 35 and 36 ordered to stand part of the Bill.
Clause 37
Repeal of existing powers
Amendment made: 43, in clause 37, page 34, line 20, at end insert—
“(3) In consequence of subsection (1)(b), in section 256 of the Pensions Act 2004 (no indemnification for fines or civil penalties), in subsection (1)(b), for ‘that Act’ substitute ‘the Pensions Act 2014’.”—(Torsten Bell.)
This amendment amends section 256(1)(b) of the Pensions Act 2004 in consequence of the repeal of Schedule 17 to the Pensions Act 2014 by clause 37(1)(b) of the Bill, including uncommenced amendments of section 256(1)(b) on which the reference to “that Act” in section 256(1)(b) relies.
Clause 37, as amended, ordered to stand part of the Bill.
Clause 38
Certain schemes providing money purchase benefits: scale and asset allocation
Torsten Bell
I beg to move amendment 44, in clause 38, page 34, line 27, leave out
“‘other than an authorised Master Trust scheme’”
and insert
“‘that is not a relevant Master Trust and’”.
This amendment clarifies a verbal ambiguity in the amendment of section 20(1) of the Pensions Act 2008.
The Chair
With this it will be convenient to discuss Government amendments 45, 46, 50, 52, 56, 60, 65, 67, 73, 76, 77, 79, 81, 82, 86 to 89, 110 and 111.
Torsten Bell
We now come to the sections of the Bill that bring in the pensions investment review measures, particularly those on setting minimum scale levels required by schemes.
Before I briefly describe these amendments, I remind the Committee of the purpose of clause 38, which we will probably be discussing for a substantial period. The clause will insert new scale requirements, which we do intend to use, and asset allocation conditions, which we do not, into the Pensions Act 2008. Specifically, it inserts them into section 20, which deals with the quality requirements in UK money purchase schemes for master trusts, and section 26, which provides equivalent requirements for group personal pension schemes.
Mark Garnier
I would like to speak to the wider clause before coming to our amendments. It is important to get on the record that this is a very bad clause. The Minister mentioned asset allocation, and this measure, which is known as mandation, has gone down incredibly badly with the pensions industry.
Mandation risks undermining the core obligation of trustees, which is to act in the best interests of savers. Pension savings reflect decades of work and are not an abstract figure on a balance sheet—they are the hope of a secure future for millions of people. Trustees and fund managers bear a legal responsibility to protect and grow these savings, investing wisely where the best opportunities may be found. Their role is not to follow political direction but to uphold the trust placed in them and the fiduciary duty they owe, which is the foundation of confidence in the pension system.
As has been said in multiple responses to the Bill, clause 38 as currently written undermines the UK’s reputation as a predictable and rules-based investment environment. When trustees select investments, they must find the safest and strongest options for beneficiaries. Can we even be confident that the Government will be able to provide a pipeline of investment opportunities? Pension funds could end up being forced to fight against each other for a selection of low-performing assets. If these powers are used, it changes accountability. If mandated investments fail, is it the trustees or the Government who should answer for those losses? Savers deserve clarity about who ultimately protects their hard-earned pension pots.
It has been said that this merely provides the powers to do mandation and does not necessarily force firms to do this, but I will come to that later. Our amendment 275 highlights the fact that there is a political party, whose Members are not in attendance here, which has already said that if it gets into government—and, let’s face it, it has a fighting chance—it will mandate pension funds to invest in the UK water industry in order to support the Government renationalising the UK water industry.
I would like to highlight some of the issues that have been raised. The Pensions Management Institute has said:
“this provision sets a dangerous precedence for Government interference in the fiduciary duty of trustees to act in members’ best financial interests.”
Pensions UK has said:
“this ambition is subject to fiduciary duties and is dependent on supporting actions by Government, namely that there will need to be a strong pipeline of investable UK assets. Without this, schemes will be competing against each other for the same assets, which risks asset bubbles and poor value for money.”
The Investment Association has said:
“It comes with significant risks for members in the form of capital being poorly allocated if political preferences take priority over member needs. Any resulting poor investment outcomes will be borne by the member. By creating the risk of political interference in capital allocation, the power undermines the UK’s global reputation as a predictable and rules-based investment environment”.
Which? has said that this measure
“may result in schemes making worse or riskier investment decisions that may not be in the best long-term financial interests of savers.”
Aviva has said:
“as currently drafted in Section 28C, the power in the Bill goes far beyond this policy intent and the scope of the Accord, with very limited constraints on how, and under what circumstances, the requirements could be introduced.”
The Institute and Faculty of Actuaries has said:
“We are concerned about the introduction of investment mandation powers, and potential interference of those powers—or their threatened use—with trustees’ fiduciary duties.”
Unison has said:
“We have significant concerns about these clauses. Fiduciaries are best placed to set the correct balance between asset classes, and equities have liquidity, governance, transparency of pricing, equality of treatment between investors, and other advantages for pension funds.”
Finally, the Association of British Insurers said:
“A mandation reserve power would undermine trust in the pension system and create a risk of political interference in capital allocation, which would undermine the UK’s reputation as a predictable and rules-based investment environment.”
I understand that this is a reserve power of mandation, but it sets a very bad precedent, so we will oppose the clause.
Mark Garnier
We have no objection to the technical amendments, but we will oppose the whole clause.
Steve Darling
We have no issue with the technical amendments. However, for us the crucial issue in the Bill is driving an environment of positive investment, and a system in the United Kingdom that individual investors—as in, would-be pensioners—can believe in.
The mandation element causes concern. As has been alluded to, there are assumptions that Ministers are reasonable people; however, we do not have to look that far across the Atlantic ocean to see politicians behaving unreasonably. It concerns us as Liberal Democrats that giving powers in the Bill without clear management of them is potentially a step too far. While the Minister, and other Ministers in the current Government, may be reasonable, who knows what is coming down the line in a very turbulent political system?
We therefore continue to have grave concerns around mandation, and look forward to hearing what assurances the Minister is able to give. The key outcome for us is making sure that there is a stable pensions system in which people can have confidence, because confidence is crucial for driving the positive investment that I am sure everybody in this room wants to see.
The Chair
I remind all Members that we are talking about the technical amendments. There will be a chance to talk about the clause later.
Kirsty Blackman
Thank you, Ms McVey—I was about to start by saying that I will not talk about clause 38; I will just talk about the technical amendments.
I have made the point before about the significant number of amendments. I do not know why the Government chose to table this number of amendments rather than submit a new clause that would replace the entirety of clause 38 and make all the changes that they wanted to make. I appreciate that the Government got in touch with us with some briefing information in relation to the changes to this clause, but we had that information very recently rather than significantly in advance. Given the huge number of technical amendments, it is very difficult to picture what the clause will look like with them all. Would the Minister agree that there could have been a better way to approach amending clause 38?
Torsten Bell
Let me first respond to the thrust of the comments from the Opposition; I will then come directly to that question. I am conscious that, having sat through Second Reading, most hon. Members have heard my views, and the Government’s views, on this, but let us set out the facts. It is the industry itself that set out the case for change. That is what the Mansion House accord does: it says that a different set of asset allocations is the right way to go in the longer term.
I support the industry’s judgment. The previous Conservative Pensions Minister has welcomed its judgment. I think it is the view of every senior Conservative ex-Minister sitting on the Opposition Back Benches that that change needs to come. [Interruption.] I am not speaking for the Opposition Front Bench; the hon. Member for Wyre Forest has just spoken eloquently for himself. I am speaking for former Conservative Ministers, including former Chancellors. If anything, they accuse me of being too timid—I am not sure what the characterisation of their current Front Bench would be in that regard. That is the status of the debate on this.
Why is there consensus? Leaving aside some of the points that have been raised, it is because this is in savers’ best interests. That is the motivation and the goal. It is also wrong to set out the conflict in terms as broad as the hon. Member for Wyre Forest has just used, because there is a clear savers’ interest test within the Bill that enables trustees or scheme managers to say that proceeding in a certain way would not be in the interests of their savers, and the asset allocation requirements would not bite.
Turning directly to the question about unreasonable Ministers—I have heard rumours of such things. They can exist, and there are protections against them: there are the usual judicial review protections, but in the Bill there are specific requirements to provide a report justifying any use of the reserve power and how it would play out. There are significant limits on the assets—it is broad asset classes—that can be set out in an asset allocation and there are limits to which assets can be covered.
There is the savers’ interest test, and importantly, there is a sunset clause for exactly the reason that we cannot predict what 2040 looks like today. I recognise that hon. Members will not support that part of the clause, but I hope they recognise that the goal is the same, which is that a change in investment behaviour is in savers’ interests. That is what the industry is telling us. As I said last Tuesday, the danger of a collective action problem—the problem that saw commitments made by the industry and the previous Conservative Government not delivered—is partly what this reserve power helps to overcome.
I have absolutely heard the points made about the volume of amendments. They are on the record, as will be all the points made during this process. To answer the question directly, the reason there are so many is that we had lots of useful feedback from industry over the summer, and I wanted to provide more clarity through the clause and make sure that we had the best version of it. We did not want to leave it until Report, so people have had a chance to see it as we go through Committee. I absolutely recognise the points made, and the specific point about the drafting choice of a large number of amendments versus an additional clause. I am sure the drafters will have heard that comment.
Amendment 44 agreed to.
Amendments made: 45, in clause 38, page 34, line 32, leave out “Conditions 1 and” and insert “Condition 1 and Condition”.
This amendment makes a minor verbal change to facilitate differential commencement of the scale and asset allocation conditions.
Amendment 46, in clause 38, page 34, line 37, leave out “of that scheme”.—(Torsten Bell.)
This amendment reflects the fact that a main scale default arrangement may be used by multiple schemes.
Torsten Bell
I beg to move amendment 47, in clause 38, page 35, line 1, at end insert—
“(ba) has previously been approved under section 28D (transition pathway relief) and is to be treated in accordance with regulations as if it had approval under section 28A,”.
This amendment allows for relevant Master Trusts that have previously received transition pathway relief to be treated as if they had scale approval.
The Chair
With this it will be convenient to discuss Government amendments 48, 49, 51, 54, 55, 57 to 59, 62, 130 and 132.
Torsten Bell
This group amends sections 20 and 26 of the Pensions Act 2008, which deal with the quality requirements that a master trust and a group personal pension scheme must satisfy. The amendments will improve the operability of the new sections. In particular they will allow, via regulations, relevant master trusts and GPP schemes that have previously received transition pathway relief—the relief that allows schemes that do not reach the £25 billion threshold in 2030, but are on course to do so soon—afterwards to be treated as if they had scale approval on a temporary basis once the pathway ends.
The amendments will also allow the Pensions Regulator to determine that a relevant master trust may be treated as meeting condition 2 of new section 20(1A) of the 2008 Act without a direct application from the master trust concerned. The effect of that is to allow the regulator to delay the impact of not meeting the scale or asset allocation requirements and to enable steps to be taken to protect members and support employers. A similar requirement for GPPs will be inserted into section 26.
Government amendments 130 and 132 amend the provision in the 2008 Act that deals with the parliamentary scrutiny process relevant to regulations made under the Act. These amendments make sure that all significant powers to make regulations as part of the scale and asset allocation measures are subject to the affirmative procedure.
Amendment 47 agreed to.
Amendments made: 48, in clause 38, page 35, line 16, leave out from “determine” to “Master Trust is” in line 17 and insert “that a relevant”
This amendment means the Regulatory Authority can determine that a relevant Master Trust is to be treated as meeting Condition 1 of subsection (1A) without an application from the Trust.
Amendment 49, in clause 38, page 35, line 18, after “1” insert “or Condition 2”
This amendment means that regulations can allow the Regulatory Authority to determine that a relevant Master Trust is to be treated for a period as meeting Condition 2 (the asset allocation requirement) as well as Condition 1 (the scale requirement).
Amendment 50, in clause 38, page 35, line 20, leave out from “Authority” to end of line 21
This amendment removes some unnecessary wording for consistency with the corresponding amendments to section 26 of the 2008 Act.
Amendment 51, in clause 38, page 35, line 28, at end insert—
“(c) make provision about the Regulatory Authority requiring the trustees or managers of a relevant Master Trust to give the Regulatory Authority a plan showing how they propose to meet or continue to meet the scale requirement under section 28A or the conditions for approval under section 28C.”
This paragraph allows regulations to give the Regulatory Authority a power to require the trustees or managers of a relevant Master Trust to give the Regulatory Authority a plan showing how they propose to meet or continue to meet the scale requirement.
Amendment 52, in clause 38, page 35, line 32, leave out “28A(1)” and insert “28A(12)”.—(Torsten Bell.)
This amendment updates a cross-reference.
Torsten Bell
I beg to move amendment 53, in clause 38, page 35, leave out lines 35 and 36.
This amendment is consequential on Amendment 129.
The Chair
With this it will be convenient to discuss Government amendments 61, 106, 116, 125 and 129.
Torsten Bell
The Committee is being very patient so I shall speak briefly to this group. This group is centred around amendment 129, which sets out the interpretation of a number of terms used throughout the clause and consolidates them in new subsection (14). Key among these is the interpretation of “group personal pension scheme”, which is amended after discussion with the Financial Conduct Authority to ensure that only schemes where all members select their investment approach are excluded from the application of clause 38, to ensure that the vast majority of workplace schemes are covered by the clause. The remaining amendments in this group are consequential to amendment 129.
Amendment 53 agreed to.
Amendments made: 54, in clause 38, page 36, leave out line 12 and insert—
“(a) has previously been approved under section 28D (transition pathway relief) and is to be treated in accordance with regulations as if it had approval under section 28B,”
This amendment allows for group personal pension schemes that have previously received transition pathway relief to be treated as if they had scale approval.
Amendment 55, in clause 38, page 36, line 15, leave out “(7C)(a)” and insert “(7A) or (7B)”
This amendment ensures that new subsection (7D) applies both to exemptions from the scale requirement and to exemptions from the asset allocation requirement.
Amendment 56, in clause 38, page 36, line 20, leave out “authorise” and insert “permit”
This amendment ensures consistency with the equivalent language used for Master Trusts.
Amendment 57, in clause 38, page 36, line 20, leave out “, on an application by the scheme concerned,”
This amendment means the Regulatory Authority can determine that a group personal pension scheme is to be treated as meeting the scale or asset allocation requirement without an application from the scheme.
Amendment 58, in clause 38, page 36, line 22, leave out “and sixth conditions” and insert “or sixth condition”
This amendment allows for a determination by the Regulatory Authority under subsection (7E) to be made in relation to one or other of the scale and asset allocation requirements (rather than only in relation to both).
Amendment 59, in clause 38, page 36, line 31, at end insert—
“(c) make provision about the Regulatory Authority requiring the provider of a group personal pension scheme to give the Regulatory Authority a plan showing how they propose to meet or continue to meet the scale requirement under section 28B or the conditions for approval under section 28C.”
This paragraph allows regulations to give the Regulatory Authority a power to require the provider of a group personal pension scheme to give the Regulatory Authority a plan showing how they propose to meet or continue to meet the scale requirement.
Amendment 60, in clause 38, page 36, line 35, leave out “28A(1)” and insert “28B(12)”
This amendment updates a cross-reference.
Amendment 61, in clause 38, page 36, leave out lines 36 and 37
This amendment is consequential on Amendment 129.
Amendment 62, in clause 38, page 37, line 4, at end insert—
“(c) in paragraph (c), at the end insert “, except so far as those requirements relate to Condition 1 or 2 in section 20(1A)””.—(Torsten Bell.)
This amendment ensures that the requirements mentioned in section 28(3)(c) of the Pensions Act 2008, so far as they relate to the new scale and asset requirements, are not a “relevant quality requirement” for the purposes of that section.
Torsten Bell
I beg to move amendment 63, in clause 38, page 37, line 11, after “requirement” insert
“by reference to the main scale default arrangement”
This amendment clarifies how the concept of a main scale default arrangement fits into the approval framework under section 28A.
The Chair
With this it will be convenient to discuss Government amendments 64, 66, 68, 69, 71, 72, 74, 75, 78, 80, 83, 85, 90 and 91.
Torsten Bell
I offer reassurance, as we will shortly come to the end of the amendments for substantive debate.
This group of amendments deals with the main scale default arrangement, along with the scale test and penalties. The MSDA is the pool of investments against which scale will be assessed. As I mentioned, the definition of that is obviously central to the effective enforcement of the scale requirements.
Key among these amendments are Government amendments 72 and 91, which set out some of the details of the MSDA for master trusts and group personal pensions, including that it can be used for the purposes of one or more pension schemes, and that the assets held within it are those of members who have not chosen how they are invested. Regulations will be made that cover other matters, including the meaning of “common investment strategy”. The details we set out in these amendments reflect the invaluable input we received from pension providers and regulatory bodies.
The remaining amendments in the group relating to the MSDA largely clarify how it fits into the wider approval requirements in the new sections 28A and 28B.
Moving on to scale, Government amendments 69 and 85 clarify the circumstances in which assets held by connected master trusts and group personal pension schemes, or where the same provider runs a GPP and master trust, can count towards the scale test. This is to ensure that, where appropriate, assets managed under a common investment strategy where there is a family connection between the master trust and GPP scheme, and where they are used for the same purpose, can be added together to achieve the £25 billion requirement.
Government amendment 71 ensures that the provisions governing penalties are consistent between the TPR and the FCA. Government amendment 90 ensures that regulations can provide for appeals to the tribunal in respect of penalties under regulations under new section 28C(9)(c).
Amendment 63 agreed to.
Mark Garnier
I beg to move amendment 250, in clause 38, page 37, line 12, at end insert
“or
(c) the relevant Master Trust meets the innovation exemption requirement.”
The Chair
With this it will be convenient to discuss the following:
Amendment 251, in clause 38, page 37, line 16, at end insert—
“(3A) A relevant Master Trust meets the innovation exemption requirement if the Trust can demonstrate that it provides specialist or innovative services.
(3B) The Secretary of State may by regulations provide for a definition of ‘specialist or innovative services’ for the purposes of this section.”
Amendment 252, in clause 38, page 39, line 11, at end insert
“or
(c) the relevant GPP meets the innovation exemption requirement.”
Amendment 253, in clause 38, page 39, line 15, at end insert—
“(3A) A relevant GPP meets the innovation exemption requirement if the Trust can demonstrate that it provides specialist or innovative services.
(3B) The Secretary of State may by regulations provide for a definition of ‘specialist or innovative services’ for the purposes of this section.”
Amendments 250, 251, 252 and 253 create an innovation exemption for pension funds that provide specialist or innovative services, as part of the new entrants clause.
Mark Garnier
The Bill sets a minimum asset threshold of £25 billion for workplace pension schemes to operate as megafunds by 2030. This is not, in itself, particularly controversial, and we are all fully aware of the arguments about scale being effective when running pension funds. The requirement is intended to drive consolidation, improve economies of scale and boost investment in UK assets, but there is concern that such a high threshold could disadvantage boutique or niche funds or new entrants into the market that provide specialist services to cater for financially literate members who prefer a more tailored approach to their pension management. For example, Hargreaves Lansdown has highlighted that its £5 billion fund serves members who value investment autonomy and expertise. The risk is that the policy could reduce competition, limit consumer choice and stifle innovation by making it harder for smaller, specialist providers to operate or enter the market
Clause 38 provides little detail of the meaning of the “ability to innovate” and how “strong potential for growth” will be measured, but it is essential that the Bill provides a credible route to support innovation. If we tie the pensions market up by restricting it to a handful of large providers focused on back-book integration and building scale, there will be less space for innovation aimed at pension member engagement. The benefit of the existing market is that its diversity provides choice and creates competition, and competition is an important part of this. Smaller schemes are chosen by employers for specific reasons. If we lose that diversity and essentially create a handful of the same scheme propositions, employers and members will lose out on this benefit.
Realistically, it will be extremely challenging for new entrants to the market to have a chance of building the required scale. Our amendments create an innovation exemption for pension funds that provide specialist or innovative services as part of the new entrants clause. This will allow boutique or niche providers to continue operating if they demonstrate diversity in the market or serve a specific member need, even if they do not meet the £25 billion threshold.
Kirsty Blackman
Amendments 250 to 253, as well as Government amendment 113, which we will discuss later, clarify the word “innovation” and look at how best to define it. There are two different approaches from the Government and the Opposition to what innovation means. I raised the issue of defining innovation on Second Reading, so I am glad that both parties are trying to clarify it here, but I am not entirely happy with the way in which the Government have chosen to do so.
When we come to Government amendment 113, I do not feel that the chosen definition of “innovative products” is necessarily right. There could be a way of working that is innovative not in the product but in the way people access the product. For example, some of the challenger banks that we have had coming up are not necessarily providing innovative products, but they provide innovative ways to access those products, and in some cases, their pitch is that they provide a better interface for people to use. I think there is potentially a niche in the market for innovative services rather than innovative products. Government amendment 113 perhaps ties too much to products, although it depends on what the definition of “products” is.
Obviously regulations will come in behind this that define “innovative”, but I think the pitch made by the Opposition for the addition of “or specialist” is helpful. “Innovative” suggests that it may be something new, whereas there could be specialist services that are not of that size but are specific to certain groups of people who value the service they are receiving, one that is very specific to their circumstances, and who would prefer that operation to keep running and to keep having access to it because of the specialist service that is provided.
I am concerned about Government amendment 113. My views are perhaps closer to the Conservatives’ amendment, but thinking particularly about services rather than the products, and the way in which the services are provided to people and the fact that there could be innovation in that respect. Also, as the hon. Member for Wyre Forest said, there could be particular niche areas that do not need to be that size in order to provide a truly excellent service to perhaps a small group of people. It depends on how the Government define “innovative” and what the regulations may look like this, but I am inclined to support the Conservatives’ amendment.
Torsten Bell
I thank the hon. Member for Wyre Forest for tabling these amendments. We all recognise the importance of innovation in the pension landscape, but I respectfully oppose the inclusion of the amendments in the Bill.
One point that is at risk of being lost from the discussion so far is the central insight that is the motivation for this clause, which is that scale really is important. Scale really does matter. It has the potential to unlock a wide range of benefits, from better governance to lower costs, to access to a wider range of assets. All of those are integral to improving member outcomes, and if we provide many carve-outs, every scheme will say it is a specialist provider that should not be covered because its members value its inherent difference from every other, and we risk undermining the premise that I think has cross-party agreement, which is that we need to move to a regime of bigger schemes.
One of our aims in this Bill, which is relevant to the asset allocation discussion we just had, is to provide clarity that the change will happen, people will not duck and dive around for years attempting to litigate what is and is not a specialist provider and so on. Innovation is really important, as is competition in the market, but we need to do this in a way that does not undermine the purpose of the scale requirements, which I think is a matter of cross-party consensus.
Having said that, while innovation in the market is important, the Government’s view is that it is not an alternative to achieving scale. That is why we have provided for a new market entrants pathway. There, the innovation grants a temporary exemption from scale requirements, not a permanent exemption as the amendments would enable. That is because scale is very important indeed. Applicants to the pathway will be able to enter the market if they can demonstrate they have strong potential to grow to scale, and if they have some kind of innovative design. That is not a permanent exemption from scale requirements, and there should be cross-party consensus on avoiding that.
To provide reassurance on some of the points that have been raised, I emphasise that the scale requirements apply only to providers’ default offers. Providers of specialist offers and the rest, and self-invested personal pensions, are all able to continue to offer those specialist services, but the main offer in the workplace market does need to meet scale requirements. I hope with that explanation, hon. Members will not press the amendments.
Mark Garnier
I am not entirely happy with the Minister’s comments. I am slightly surprised, and I thought he might have listened a bit more carefully. We absolutely understand the economies of scale. A large, £25 billion pension fund can do amazing things. We are 100% behind that. We have not disagreed with that at all. However, I somehow feel myself listening to the Minister and hearing the reverse of the arguments we were making as we tried to allow new-entrant banks into the market after the financial crisis.
Those of a certain age—and the Minister turned 43 the other day, so he will remember the financial crisis—know that the problem was that a few very big banks were spreading the contagion. I remember being on the Treasury Committee and the Parliamentary Commission on Banking Standards after the financial crisis, when we were trying to sort out Labour’s previous mess, and not a single ab initio banking licence had been issued for 100 years. The only way that companies could get into the banking market—as Virgin and Metro were doing—was by buying dormant banking licences. I remember having long conversations—successfully, as it turned out—in order to try to allow companies such as Starling into the market. I think that Starling received the first ab initio banking licence for 100 years.
Having learned over the past 10 or 15 years about the effects of having large scale only, we are now having an argument about potentially stifling the pensions equivalent of companies such as Starling, Metro, Revolut and other innovators coming into the pensions market. I was hoping that from debating the amendments I could be convinced that the Minister would take away the thinking behind what we have come up with: that innovation should be good, and that there should permanently be new, fresh blood coming through. However, I do not think that he has got it. I was not going to push the amendments to a vote, but I now feel motivated to do so.
Kirsty Blackman
I want to make a brief comment about the definition of “specialist”. I appreciate the Minister’s clarification about the default products provided, but there could be a sensible definition of “specialist” that included, for example, that if providers can demonstrate that over 75% of their members engage in the management of their pension fund every year, that would be a very specialist and well-liked service. I understand that the scale is incredibly important. However, if a provider can demonstrate that level of engagement in its pension scheme, because of its innovative product or service, I think it would be sensible to look at the scale requirements, even if that provider does not yet meet them.
The Opposition have kindly left it up to the Minister and the Government to define what “specialist” would be, so I will support the Opposition amendments on that matter. However, when we come to Government amendment 113, I will require some clarification from the Minister about the definition of “products”.
Torsten Bell
I am reassured that our agreement that scale is the desirable outcome is clear. It is great to have that on the record. I also put on the record that there is agreement about the value of innovation and about new entrants. I think that the only distinction is between a new entrant that then grows and a new entrant that does not. Our approach is to allow new entrants, but they need to be ones with a plausible sense that they can get to scale. Inherent to most of the innovation in the market—for example, in collective defined-contribution schemes—is that they would have to operate at scale to be effective. I think that the banking analogy is actually quite apt.
Steve Darling
Would the Minister be kind enough to reflect on a situation currently at play in the market, whereby Phoenix Group is withdrawing the management of billions of pounds from Aberdeen Group? These master products offer opportunities that could significantly impact on viability. Could the Minister reflect on that?
Torsten Bell
Let me just finish the point about the financial crisis, then I will come to the hon. Member’s question. The lesson from the financial crisis was that banks were too big, and the lesson that we all agree about is that pension schemes are too small. That is the distinction—that is why we are doing this Bill now and why the previous Conservative Government introduced different changes after the financial crisis. We are in a very different situation. That said, we need to prepare for the future and, when there are bigger pension schemes, we want a world where new entrants can come into them. I hear what has been said. I want to reassure the hon. Gentleman that we want to see new entrants offering innovative products. I take the point about services, which we will come back to when we come to amendment 113, but that needs to be a pathway, not a permanent carve-out that risks undermining the scale requirements.
Question put, That the amendment be made.
Mark Garnier
On a point of order, Ms McVey. Might it be easier, for brevity, if we vote on amendments 251 to 253 together?
The Chair
The amendments are consequential on amendment 250, so I cannot do that. I will now suspend the sitting while we consider how and whether to meet the hon. Gentleman’s request.
Torsten Bell
I beg to move amendment 70, in clause 38, page 37, leave out lines 39 and 40 and insert—
“(b) what it means for assets of a pension scheme to be managed under a "common investment strategy" (including in particular provision defining that expression by reference to whether or how far the assets relating to each member of the scheme are allocated in the same proportion to the same investments).”
This amendment provides more detail as to how the power to define “common investment strategy” may be used.
Torsten Bell
I will be brief. The link between the definition of a main scale default arrangement and the common investment strategy is key to ensuring that the scale requirements apply to the correct elements of a pension scheme. Amendments 70 and 84 provide more detail on how the power to define a common investment strategy may be used to provide further information on the Government’s meaning when referring to that term.
Amendment 97 removes the “common investment strategy” element from the definition of default funds to avoid confusion with how that term is used in the main scale default arrangement approval in new sections 28A and 28B. I commend the amendments to the Committee.
Amendment 70 agreed to.
Amendments made: 71 in clause 38, page 38, leave out lines 32 to 38 and insert—
“(d) permitting the Authority to impose, on a person who fails to comply with a requirement under paragraph (c), a penalty determined in accordance with the regulations that does not exceed £100,000;”.
This amendment ensures that the penalties language used in section 28A is consistent with that used in new section 28B.
Amendment 72, in clause 38, page 39, leave out lines 1 to 4 and insert—
“(12) In this section ‘main scale default arrangement’ means an arrangement—
(a) that is used for the purposes of one or more pension schemes, and
(b) subject to which assets of any one of those schemes must under the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held.”
This amendment defines “main scale default arrangement” for the purposes of new section 28A.
Amendment 73, in clause 38, page 39, line 7, leave out “relevant”.
This amendment removes an unnecessary tag.
Amendment 74, in clause 38, page 39, line 10, after “requirement” insert—
“by reference to the main scale default arrangement”.
This amendment clarifies how the concept of a main scale default arrangement fits into the approval framework under section 28B.
Amendment 75, in clause 38, page 39, line 12, after “requirement” insert—
“by reference to a main scale default arrangement”.
This amendment clarifies how the concept of a main scale default arrangement fits into the approval framework under section 28B.
Amendment 76, in clause 38, page 39, line 16, leave out “subsection (6)” and insert “subsections (5) and (6)”.
This amendment adds a further cross reference to new section 28B(4).
Amendment 77, in clause 38, page 39, line 17, leave out “held in funds”.
This amendment removes some unnecessary wording for the sake of consistency.
Amendment 78, in clause 38, page 39, line 18, at end insert—
“(ia) are held subject to the main scale default arrangement, and”.
This amendment clarifies how the concept of a main scale default arrangement fits into the approval framework under section 28B.
Amendment 79, in clause 38, page 39, line 20, leave out “held in funds”.
This amendment removes some unnecessary wording for the sake of consistency.
Amendment 80, in clause 38, page 39, line 24, at end insert—
“(ia) are held subject to the main scale default arrangement, and”.
This amendment clarifies how the concept of a main scale default arrangement fits into the approval framework under section 28B.
Amendment 81, in clause 38, page 39, line 27, leave out “held in funds”.
This amendment removes some unnecessary wording for the sake of consistency.
Amendment 82, in clause 38, page 39, line 27, leave out—
“one (and only one) relevant”
and insert “a qualifying relevant”.
This amendment corrects a reference to a relevant Master Trust in new section 28B(4)(c) to take account of new section 28B(8).
Amendment 83, in clause 38, page 39, line 30, at end insert—
“(ia) are held subject to the main scale default arrangement, and”.
This amendment clarifies how the concept of a main scale default arrangement fits into the approval framework under section 28B.
Amendment 84, in clause 38, page 39, leave out lines 38 and 39 and insert—
“(b) what it means for assets of a pension scheme to be managed under a ‘common investment strategy’ (including in particular provision defining that expression by reference to whether or how far the assets relating to each member of the scheme are allocated in the same proportion to the same investments).”
This amendment provides more detail as to how the power to define “common investment strategy” may be used.
Amendment 85, in clause 38, page 40, line 3, leave out from “(4)” to end of line 6 and insert—
“(a) a group personal pension scheme is ‘qualifying’ in relation to the GPP if the provider of the GPP is also the provider of the group personal pension scheme;
(b) a relevant Master Trust is ‘qualifying’ in relation to the GPP if the provider of the GPP is also the scheme funder or the scheme strategist in relation to the relevant Master Trust (within the meaning of Part 1 of the Pension Schemes Act 2017).”
This amendment clarifies the circumstances in which assets held by connected Master Trusts and group personal pension schemes can be counted for the purposes of the application of the scale test to a group personal pension scheme.
Amendment 86, in clause 38, page 40, line 19, leave out “relevant Master Trust or”.
This amendment removes an unnecessary reference to a relevant Master Trust.
Amendment 87, in clause 38, page 40, line 25, leave out—
“managers of the GPP that their”
and insert—
“provider of the GPP that its”.
This amendment replaces a reference to the “managers” of a GPP with “provider” (reflecting normal usage in relation to personal pension schemes).
Amendment 88, in clause 38, page 40, line 27, leave out “the managers” and insert “the provider”.
This amendment replaces a reference to the “managers” of a GPP with “provider” (reflecting normal usage in relation to personal pension schemes).
Amendment 89, in clause 38, page 40, line 35, leave out—
“considered by the Authority to have failed”
and insert “who fails”.
This amendment ensures consistency with the new language in section 28A.
Amendment 90, in clause 38, page 40, line 38, at end insert—
“(e) providing for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty.”
This amendment ensures that regulations can make provision for appeals to the Tribunal in respect of penalties under regulations under new section 28C(9)(c).
Amendment 91, in clause 38, page 40, line 42, leave out from beginning to end of line 3 on page 41 and insert—
“(12) In this section ‘main scale default arrangement’ means an arrangement—
(a) that is used for the purposes of one or more pension schemes, and
(b) subject to which assets of any one of those schemes must under the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held.” —(Torsten Bell.)
This amendment defines “main scale default arrangement” for the purposes of new section 28B.
Mark Garnier
I beg to move amendment 248, in clause 38, page 41, line 4, leave out from beginning to end of line 9 on page 43.
This amendment would remove the ability of the Government to set mandatory asset allocation targets for certain pension schemes, specifically requiring investments in UK productive assets such as private equity, private debt, and real estate.
The Chair
With this it will be convenient to discuss the following:
Amendment 275, in clause 38, page 41, line 31, at end insert—
“(5A) A description of asset prescribed under subsection (4) may not be securities in any UK water company.”
This amendment would ensure that the prescribed percentage of asset allocation would not include assets in the water sector and fund trustees will not be compelled to allocate scheme assets to the water sector.
Amendment 249, in clause 38, page 45, line 3, leave out from beginning to end of line 27 on page 46.
This amendment is consequential on Amendment 248.
New clause 4—Establishment of targeted investment vehicles for pension funds—
“(1) The Secretary of State may by regulations make provision for the establishment or facilitation of one or more investment vehicles through which pension schemes may invest for targeted social or economic benefit.
(2) Regulations under subsection (1) must specify the descriptions of targeted social or economic benefit to which the investment vehicles are to contribute, which may include, but are not limited to, investment in—
(a) projects that revitalise high street areas;
(b) initiatives demonstrating social benefit;
(c) affordable or social housing development.
(3) The regulations must make provision for—
(a) the types of pension schemes eligible to participate in such investment vehicles;
(b) the governance, oversight, and reporting requirements for the investment vehicles and participating pension schemes;
(c) the means by which the contribution of such investments to targeted social or economic benefit is measured and reported;
(d) the roles and responsibilities of statutory bodies, including the Pensions Regulator and the Financial Conduct Authority, in authorising, regulating, or supervising such investment vehicles and the participation of pension schemes within them.
(4) The regulations may—
(a) make different provision for different descriptions of pension schemes, investment vehicles, or targeted social or economic benefits;
(b) provide for the pooling of assets from multiple pension schemes within such vehicles;
(c) require pension scheme trustees or managers to have regard to the availability and suitability of investment vehicles when formulating investment strategies, where consistent with—
(i) their fiduciary duties, and
(ii) the long-term value for money for members.
(5) In this Chapter, ‘pension scheme’ has the same meaning as in section 1(5) of the Pension Schemes Act 1993.”
This new clause would allow the Secretary of State to establish investment funds to encourage investment in areas such as high streets, social housing and investments with clear social benefits.
Mark Garnier
Amendments 248 and 249 talk about removing mandation—something I spoke about when we debated clause 38, so I will not cover those amendments other than to say that it is something we feel strongly about. Amendment 275 concerns mandation with regard to the water industry. It comes as a result of an announcement from the leader of Reform about potentially using pension fund money to invest in Thames Water, and part of Reform’s manifesto talked about nationalising the water industry, but using pension fund money to own 50% of those holdings. To a certain extent, that is performative because we are talking about a specific sector. This amendment specifically talks about the water companies, but it could be carried forward to any other potentially nationalised sector.
John Milne
I will speak to new clause 4 on targeted investment vehicles. Its purpose is to empower the Secretary of State to establish or facilitate targeted investment vehicles for pension funds. Overall, the pensions industry is supportive of the Bill, as are the Liberal Democrats, but some sections have expressed concern that a requirement to invest in UK infrastructure and assets could lead to excess demand for a limited stock of investment, especially in the early days when the economy is adjusting. In a worst-case scenario, it could lead to overpaying for investments or difficulty in reaching Government targets. Government assistance to ensure a healthy flow of investment vehicles would therefore serve to prevent that from happening.
Furthermore, there is a unique opportunity to create vehicles that would allow schemes to invest in projects with clear social and economic benefits. It could include many different types of investments. For example, the Government could support the development of investment vehicles designed to revitalise high streets and local communities, provide affordable and social housing development, provide care home accommodation or support other projects that deliver long-term value while strengthening society.
The new clause sets out regulations that would set clear rules on which schemes can participate. Different provision could be made for different schemes and types of investment vehicles. The Pensions Regulator and the Financial Conduct Authority would be given defined responsibilities in authorising, supervising and regulating these vehicles. To be clear, trustees would only be expected to consider the investments where consistent with their fiduciary duties and long-term value for money for members. Pension funds are among the largest sources of long-term capital in the UK, so harnessing even a small proportion for socially beneficial investment could deliver real economic and community impact. Pooling of assets would also facilitate open access for smaller schemes. Done properly, that could align members’ retirement interests with a wider public good.
To summarise, the new clause is designed to ensure a constant supply of suitable investment vehicles so that pension funds can invest at scale in areas that are currently not receiving sufficient attention. At the same time, it would create a framework where pensions could be a force for social renewal and financial security. The clause ensures opportunities with safeguards in place for schemes to contribute to national priorities, while still securing value for members.
Kirsty Blackman
Although I am delighted by the intention of the hon. Member for Wyre Forest to get one over Reform with amendment 275, and I am quite happy to back that notion, I am also pretty happy with nationalised water in Scotland. Scottish Water is significantly better performing than the other water companies, so I would not automatically say that nationalised water is a bad thing, given that our water is lovely in Scotland. However, we could do with a little more rain on the north-east coast, given that we have had the driest spring and summer for 40 years, which is not ideal. I gently disagree with the hon. Member because the amendment does not take into account the Scottish context. I would love to see more investment in Scottish Water from pension funds or from Government-led investment vehicles or decision making.
On amendments 248 and 249, I am much more relaxed about mandation than the Conservatives are, as Members might expect given my ideological position. I have much less of an issue with going in that direction. I have heard all the Government have said about not planning to use those powers. It is reasonable for the Government to direct the economy in certain directions—that is what tax and Government spend are for. A good chunk of that is about ensuring that we make interventions so that the economy grows in the way that we want it to.
In many cases, Governments have historically refrained from picking winners when a decision to do so could have grown the economy faster. For example, historically, the Government could have given more backing to certain ports to ensure that they could grow, particularly through renewable energy or by building offshore wind farms, because we could do with more local capacity throughout the UK. Had Governments of all colours been clearer about which areas and regions they were backing, that understanding could have enabled those areas to win more contracts.
On new clause 4, the options for how mandation could work and the investment vehicles that are in place, I have talked about affordable and social housing development. The biggest thing the Government could do to encourage social housing, in particular, is to cancel the right to buy, which would allow local authorities to build significant levels of social housing. That is how we are managing to increase our housing stock in Scotland. We are not there yet—nobody says that we are—but we are able to build new social housing in Scotland at a scale that most local authorities south of the border are not, because cancelling the right to buy has made it affordable. I would love to see more investment in social housing.
I would have liked renewable energy to be included in the Lib Dems’ new clause 4. I appreciate that we cannot include everything, but it would have been nice, particularly when it comes to smaller renewable energy projects and in combined heat and power initiatives. Large-scale CHP makes a really positive difference in Aberdeen city. We have a large combined heat and power network, which heats a significant number of our multi-storey blocks at far lower prices. They are still seeing an increase in prices, absolutely, but they do not need to worry about putting money in the meter, because they know they will have hot water and heating for a fixed monthly fee, rather than paying more in winter and less in summer.
Lastly, harking back to the Future Generations Commissioner for Wales, it would be interesting for the Government to consider whether any potential mandation benefits future generations, given the intergenerational gap and given that people my age and younger are increasingly of the view that we will never get a state pension, because it will simply not exist by the time we reach retirement age—I am sorry if not everybody is at that level of cynicism, but most people my age and younger are. Looking at where our private pensions are invested and at the Government’s direction of travel, it would at least be an interesting thought exercise, in advance of any Government decision on mandation, to consider whether that money would benefit future generations or make things worse for them. In Wales, decisions can be called in for judicial review, should a public authority act against the wellbeing of future generations.
Looking at whether investments that could be directed by the Government would benefit or have a detrimental impact on future generations would be an interesting way to tie the Government’s hands. That way, we could see investment not simply in massive motorways, High Speed 2 or dual carriageways, but in things that have a demonstrable benefit, or at least no adverse impact, on the wellbeing of future generations. Surely that should be a positive thing for us all, given our huge responsibilities for the future of the planet and to those who will be living on these islands. Requiring that to be considered when the Government look at mandation could be a great way to do it.
I am not sure what I will do when we come to new clause 4—it will be voted on at the very end because it is a new clause. I like the idea, but I am not convinced that I would go down that exact route. I will not be supporting the Conservative amendments in this group, which I understand the shadow Minister is terribly shocked about, but there are places where we can have significant ideological disagreements, and this is definitely one of them.
Mr Bedford
I refer the Committee to my entry in the Register of Members’ Financial Interests, having worked in the water sector before being elected to Parliament. I will be speaking predominantly to amendment 248. The Committee heard evidence from industry experts who expressed concerns about the Bill’s mandation power. They were consistent and clear in raising concerns about the reserve powers in the Bill. I would like to reiterate some of those concerns raised by the industry, which I believe hon. Members should support today.
At the heart of clause 38 is its impact on the fiduciary duty of trustees—not just a mere technicality, but a duty that has been at the heart of trust-based governance for centuries. Trustees have a legal duty to act solely in the best interests of their members. However, the Government believe it is acceptable to tear up that duty through a ministerial power grab. If the Bill is passed in its current form, Ministers will have the power to override the judgment of trustees, which I do not believe is appropriate. That is not to guide or support, but to mandate them—to potentially force them to act against what are arguably the best interests and returns for their members.
That leads me to the potential impact on pensions adequacy in the UK. We are facing a pensions adequacy crisis, as I and other members of this Committee have said before. The majority of people are not saving anywhere near enough for retirement, and the cost to the state pension will only continue to rise, yet we have seen that the Government are willing to take investment decisions out of the hands of pension fund trustees.
David Pinto-Duschinsky (Hendon) (Lab)
As the Minister has previously said, there will be a savers’ interest test. There will be a series of safeguards, including the fact that if the Government want to exercise the power, they will have to file a report. This is a power ringfenced with safeguards. What Opposition Members have not said is what they would do instead to raise the returns of the pension market, because that is the issue. The hon. Member for Mid Leicestershire is exactly right that there is not enough pension saving, but that is exactly because we are not seeing those returns. If not this power, what would the Opposition do instead to raise investment levels?
Mr Bedford
I will come on to some of those points later, so I will address them then.
Mark Garnier
This is rather strange, because I wanted to intervene on the intervention, but I hope that my hon. Friend will come on to the various other things that we have proposed. For example, we have proposed looking at the Maxwell rules, which are driving the incentive of pension fund trustees to invest in gilts because of the implications of volatile markets for balance sheets. We are trying to look at the wider regulation that is driving certain behaviour, and I hope that my hon. Friend will raise that in due course. We are 100% behind the Bill—not every single part of it, although the thrust is very good—but, as my hon. Friend will mention, there are areas that could be changed to achieve its aims.
Mr Bedford
I hope to address some of those points.
The Government are willing to take investment decisions out of the hands of pension fund trustees to force investments into projects that may be politically convenient for them, but may potentially lead to financial loss for members. They are directing investment on the backs of ordinary UK savers. When people save into a pension scheme, they are entrusting their future security to a system that is working supposedly for them and not for political gain. To answer the point made by the hon. Member for Hendon, rather than coercing trustees to follow conditions set by Ministers, would it not be better to create the right economic conditions to make trustees want to invest in the UK?
The last Conservative Government, through their Mansion House reforms and the work of my right hon. Friend the Member for Godalming and Ash, brought in active commitment from the pension fund trustees who want to invest. We did not need to mandate that, and the Government should learn from that approach. Amendment 248 will preserve the fiduciary duty, but continue the trajectory to increase pension fund investment in the UK.
John Grady (Glasgow East) (Lab)
Would the hon. Member accept that pension trustees should, in accordance with their fiduciary duties, actively consider investing in such things as private equity, private patient capital and interests in land? The fact that so many people have agreed, under the Mansion House arrangements, to invest in such classes of assets, which have grown exponentially in scope over the last 25 years, makes the basic point that they will yield much better returns for my constituents. The thrust is simply to get better returns for pension savers in the United Kingdom.
Mr Bedford
I trust the pensions industry to make those judgments because they are the experts in this area, not Government Ministers, who often have short-term views. On Second Reading, one of my hon. Friends raised the example of HS2 and how Government priorities and policies can change over time. Would the hon. Member be happy for his constituents to have their money invested in a Government project or a large infrastructure scheme that is then scrapped, and to see huge losses to their pension scheme? I have huge concerns about the mandation point.
Clause 38, in its current form, undermines the trust that I mentioned earlier. I therefore urge hon. Members to back our amendment to ensure that the fiduciary duty remains and that we protect the security of millions of savers.
Kirsty Blackman
I corrected the Minister the other day on the definition of fiduciary duty, and the hon. Member for Mid Leicestershire just made a similar error. The fiduciary duty is not to act in the best interests of scheme members but to act in the best interests of getting them the pensions they were promised, or of growing their pensions. It is not necessarily about their best interests; it is about the best interests of their pension and the size of it.
We spoke about this quite a lot in relation to the local government pension scheme. There could be investments that make a person’s life significantly better than having an extra fiver a year in their pension. These are two different things. I appreciate that fiduciary duties should be what they are—I am not arguing with that; I am saying that the definition is not about acting in the best interests of scheme members but simply about growing their pension pots.
In terms of the two Lib Dem amendments and the points made about the investability of projects, we could argue about chickens and eggs and what will come first: will it be the economy growing in order that pension funds can find more investable projects, or will it be a pipeline of projects ready for funds to invest in, which is what the witnesses giving evidence last Tuesday suggested they need? If the Government are clear, not necessarily that they will include mandation but that there is a stick at the end of the process if the carrots do not work, confidence in that pipeline will grow in order for those projects to be there. I would love those projects to include what the Liberal Democrats are suggesting—housing and regeneration of town centres, for example—as well as investment in renewable energy and an increase in energy efficiency measures.
John Milne
Renewable energy schemes—particularly community energy, which I am a big fan of—are a very good addition, so we would support that.
Torsten Bell
I shall speak briefly because I am conscious that we need to adjourn shortly for Treasury orals, which I know everybody will be joining us for. I will not rehearse the arguments I have already set out against the purpose of amendments 248 and 249, other than to note that I do not agree with the characterisation by the hon. Member for Mid Leicestershire.
Amendment 275 seeks to prevent the Government from designating securities in UK water companies as qualifying assets for the purpose of the asset allocation requirement. I recognise the points that the hon. Member for Wyre Forest made, and I am not surprised to hear that Reform has not thought through its policies in this regard. The Government have set out the safeguards we have put in place around the use of this power. We do not think we should single out a particular sector in primary legislation, so I ask Members not to press their amendments.
I thank the hon. Member for Horsham for introducing new clause 4. The investment he references is exactly the kind that we think would raise financial returns and improve quality of life at retirement. That is the purpose of these changes. He rightly raises the bringing together of the demand side—that is, the Mansion House accord and the change in investment behaviours—with the supply side. That is exactly what the Government are doing via planning permissions and everything else, to ensure that the pipeline of projects is there, including via the British Growth Partnership work, which is intermediating all of that. On that basis, we think that the new clause is unnecessary, but I completely agree with much that it contains.
Steve Darling
Reflecting on events over the weekend, may I congratulate the Minister on being one of the few who remained in post? There is talk of the Prime Minister using all levers of power to drive forward work on certain wicked issues. One of the big wicked issues is the lack of affordable housing. In my constituency of Torbay, only 8% of our housing stock is social-rented, compared with a national average of 17%. I encourage the Minister to reflect again on this and take the opportunity of new clause 4—surely socialists should vote for clause 4. This is another opportunity to apply all the pressure we can to drive more social-rented housing, to support our communities and those most in need in society.
Torsten Bell
I just point out that many of the measures in the Bill will support exactly that kind of investment in social housing, including those on scale and the local government pension scheme. On that basis, I think these amendments are unnecessary.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Pension Schemes Bill (Sixth sitting)
Tuesday 9th September 2025
(1 day, 13 hours ago)
Public Bill CommitteesPension Schemes Bill 2024-26 View all Pension Schemes Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 9 September 2025 - (9 Sep 2025)
The Committee divided: - Ayes: 3 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 3 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 275, in clause 38, page 41, line 31, at end insert—
“(5A) A description of asset prescribed under subsection (4) may not be securities in any UK water company.”
This amendment would ensure that the prescribed percentage of asset allocation would not include assets in the water sector and fund trustees will not be compelled to allocate scheme assets to the water sector.
Amendment 249, in clause 38, page 45, line 3, leave out from beginning to end of line 27 on page 46.
This amendment is consequential on Amendment 248.
New clause 4—Establishment of targeted investment vehicles for pension funds—
“(1) The Secretary of State may by regulations make provision for the establishment or facilitation of one or more investment vehicles through which pension schemes may invest for targeted social or economic benefit.
(2) Regulations under subsection (1) must specify the descriptions of targeted social or economic benefit to which the investment vehicles are to contribute, which may include, but are not limited to, investment in—
(a) projects that revitalise high street areas;
(b) initiatives demonstrating social benefit;
(c) affordable or social housing development.
(3) The regulations must make provision for—
(a) the types of pension schemes eligible to participate in such investment vehicles;
(b) the governance, oversight, and reporting requirements for the investment vehicles and participating pension schemes;
(c) the means by which the contribution of such investments to targeted social or economic benefit is measured and reported;
(d) the roles and responsibilities of statutory bodies, including the Pensions Regulator and the Financial Conduct Authority, in authorising, regulating, or supervising such investment vehicles and the participation of pension schemes within them.
(4) The regulations may—
(a) make different provision for different descriptions of pension schemes, investment vehicles, or targeted social or economic benefits;
(b) provide for the pooling of assets from multiple pension schemes within such vehicles;
(c) require pension scheme trustees or managers to have regard to the availability and suitability of investment vehicles when formulating investment strategies, where consistent with—
(i) their fiduciary duties, and
(ii) the long-term value for money for members.
(5) In this Chapter, “pension scheme” has the same meaning as in section 1(5) of the Pension Schemes Act 1993.”
This new clause would allow the Secretary of State to establish investment funds to encourage investment in areas such as high streets, social housing and investments with clear social benefits.
Question put, That the amendment be made.
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
I beg to move amendment 92, in clause 38, page 41, line 8, leave out “of the totality”.
This amendment is consequential on Amendment 94.
The Chair
With this it will be convenient to discuss Government amendments 93 to 96 and 133.
Torsten Bell
It is wonderful to have you in the Chair, Ms Butler. Amendments 92 to 96 are minor amendments that clarify that any asset allocation percentage requirements should be calculated as a percentage of default funds, rather than as a percentage of the total assets of a scheme. That is how the Mansion House accord works and how these powers are intended to operate.
Amendment 133 simply ensures that the Government can remove redundant provisions from primary legislation should the sunset provisions—which as a result of Government amendment 228 will now appear in clause 101—cause the power we have been discussing to expire. I commend the amendments to the Committee.
Amendment 92 agreed to.
Amendments made: 93, in clause 38, page 41, line 9, after “in” insert “default”.
This amendment confines the application of the asset allocation requirement to default funds of a relevant Master Trust or a group personal pension scheme.
Amendment 94, in clause 38, page 41, leave out lines 10 to 14 and insert—
“(2) Regulations under subsection (1) may prescribe a percentage by reference to—
(a) all of the assets of the scheme that are held in default funds, or
(b) a prescribed description of the assets of the scheme that are so held.”.
This amendment clarifies that a percentage may be prescribed under section 28C(1) in respect of either all the default funds of a scheme or a particular subset of those default funds.
Amendment 95, in clause 38, page 41, line 15, leave out “or (2)”.
This amendment is consequential on Amendment 94.
Amendment 96, in clause 38, page 41, line 18, leave out from “description” to end of line 19.—(Torsten Bell.)
This amendment is consequential on Amendment 93.
Amendment proposed: 275, in clause 38, page 41, line 31, at end insert—
“(5A) A description of asset prescribed under subsection (4) may not be securities in any UK water company.”—(Mark Garnier.)
This amendment would ensure that the prescribed percentage of asset allocation would not include assets in the water sector and fund trustees will not be compelled to allocate scheme assets to the water sector.
Question put, That the amendment be made.
Torsten Bell
I beg to move amendment 98, in clause 38, page 42, line 12, leave out “relevant Master Trusts or” and insert—
“the trustees or managers of relevant Master Trusts or the providers of”.
This amendment clarifies that legal obligations fall on the trustees or managers of relevant Master Trusts or on the providers of group personal pension schemes (rather than on the schemes themselves).
The Chair
With this it will be convenient to discuss the following:
Government amendments 99 to 105.
New clause 32—Impact Assessment for defined benefit schemes’ asset allocation changes—
“(1) Before implementing any regulatory or policy change for defined benefit schemes’ asset allocation, the Secretary of State must assess the impact of such a change on schemes’ asset allocations.
(2) To determine the impact of a change outlined in subsection (1), the Secretary of State must consult with—
(i) the Debt Management Office,
(ii) industry stakeholders, and
(iii) such individuals or organisations as they deem appropriate.
(3) If the assessment under subsection (1) determines that a change could result in schemes shifting away from owning gilts to equities, the Secretary of State must publish an impact assessment before the implementation of the change.”.
This new clause requires an impact assessment for defined benefit schemes’ asset allocation changes.
Torsten Bell
I will start with the Government amendments and then turn to new clause 32. The amendments relate to proposed new section 28C and specify more detail about the role of the regulator in over- seeing the granting and withdrawal of approvals under this section, including a penalty-making power where a provider does not comply with the relevant requirements, and a clarification to ensure that subsection (14) on the interaction of these provisions with scheme documentation operates as intended.
New clause 32 would require the Secretary of State to conduct an impact assessment—and I appreciate, as I am sure the Opposition will come to shortly, that it is an impact assessment for a particular purpose—before implementing any regulatory or policy change for defined-benefit schemes’ asset allocation. First, let me reassure the hon. Member for Wyre Forest that the Government have no plans to make such changes to defined-benefit schemes’ asset allocation. I reiterate that the reserved powers contained in the clause only relate to defined-contribution workplace schemes. There are no plans to change defined-benefit asset allocations through the Bill. Therefore, the new clause is not considered necessary, and I encourage the hon. Member not to press it. I am sure he will want to make some wider points about the changes in asset allocation within defined-benefit schemes, and their impact on the wider economy.
Mark Garnier (Wyre Forest) (Con)
I rise to speak to new clause 32, which looks at the effects of some of the changes on the UK gilt market. Defined-benefit pension schemes are major holders of UK Government bonds, with pension funds holding around 28% of the gilt market —the UK Government bond market—as of early 2022. Those investments provide stable, long-term funding for the UK Government and are essential to the functioning of the debt market.
Significant shift by DB schemes away from gilts and into equities—which, in itself, is not a bad thing, as long as it does not happen in a disorganised way, which could be prompted by policy changes—may reduce the demand for gilts, potentially increasing yields and destabilising the market. At the end of the day, if 28% of the ownership of the gilt market is taken away, somebody else needs to be found to buy it. Otherwise, there will be a falling market. We all know what a gilt crisis looks like for pension funds. The 2022 gilt crisis highlighted the market’s vulnerability to large and sudden sales by pension funds, which triggered a fire-sale spiral and required Bank of England intervention to stabilise prices. It was not a good day. The Debt Management Office and market experts have noted that the gilt market is highly reliant on pension fund investment, and any structural reduction in demand could impact Government borrowing costs and market stability.
The Office for Budget Responsibility has highlighted concern about the impact of a low gilt allocation scenario, which is likely if the Bill achieves the outcomes that the Government want. A low gilt allocation scenario would mean that pension sector allocation of gilt holdings would drop to 10% of GDP by around 2040, down from around 30% today. That in itself, all other things being equal, would result in an extra £22 billion of debt interest payments on the current gilt market. We are highly concerned that a wholesale move from the gilt market by the pension industry places even more burden on the Treasury to manage debt payment. As the deficit continues to grow, the Government must have laser focus on the impact on the gilt market in relation to how they fund Government debt.
The new clause introduces a requirement for an impact assessment before any regulatory or policy changes that could materially alter DB schemes’ asset allocations away from gilt. It should mandate consultation with the Debt Management Office and industry stakeholders to monitor and mitigate risk to market stability. We are not trying to stop the Government persuading pension funds into equities or other alternative investments, but we need a proper conversation with the Debt Management Office about what that means for the cost of Government borrowing, which could potentially be significant.
Torsten Bell
I will not speak for long. The hon. Member is absolutely right to say that defined-benefit schemes have been material buyers of gilts over a long period. The market is perhaps deeper and more robust than what some of his remarks might imply. There is a range of participants in our gilt markets. However, I take the point that pension schemes are one of them. Contributions such as those from the Office for Budget Responsibility are valuable in that debate, and I reassure him on two fronts. First, I know that he did not mean it quite like this, but the deficit is not growing this year; in fact, it is falling by around 1% of GDP, marking us out from some other countries. Secondly, he is absolutely right to say that the DMO should and does engage with market participants across a wide range of matters. However, on that basis, and on the basis that the Bill does not envisage changes in DB schemes’ asset allocations, I ask him to withdraw the new clause.
Amendment 98 agreed to.
Sarah Edwards (Tamworth) (Lab)
I beg to move amendment 276, to clause 38, page 42, line 41, at end insert—
“(aa) the progress towards the targets set out in the Mansion House Agreement (2025) and the state of the supply pipeline of qualifying assets;”.
To clarify the extent of the review to be conducted before the “mandation” power is deployed.
It is an honour to serve under your chairship, Mr Turner. It may be that the subject of my amendment is already covered or that the Minister may wish to take it away for consideration. I commend the tracked changes document that was shared with us and that has enabled us to read clause 38 with all of its new additions in a much easier format. I implore the House to use that tool in other Committees, because it has made it much easier this afternoon.
The all-party parliamentary group for pensions and growth heard from the pensions industry at the roundtables that it held, and this amendment speaks to a point that I made on Second Reading. It is a clarifying point concerning the Mansion House agreement, which sets out targets and a supply and pipeline of investments to be made available by pension funds to invest into. It is a point of clarification because it is arguably good and noble to channel that investment, but the pipeline needs to be managed to ensure good outcomes for members, whose money will be helping to build these projects. It is about future-proofing the Bill, because as the Minister has said in previous sittings, he may not be our Pensions Minister forever.
In short, the purpose of my amendment is to clarify the extent of the review to be conducted before a mandation power is deployed. It is merely a clarification point for the pensions industry.
Kirsty Blackman (Aberdeen North) (SNP)
I rise to support amendment 276. It is similar to some of the points that I brought up earlier, which were also brought up in the oral evidence session, about the consistency and existence of that pipeline and the fact that it needs to be there. Reviewing in advance of a decision being made on mandation would be the sensible thing.
I mentioned earlier the issue with chickens and eggs—which comes first?—and I think the amendment brings more of a focus in primary legislation on ensuring that the pipeline exists in order that these companies and organisations can meet their commitments under the Mansion House agreement. It is all well and good for them to have the Mansion House agreement, but if the opportunities are not there and are not investment-ready, it will be difficult for them to meet those targets. This is a sensible amendment, and I am more than happy to support it.
Torsten Bell
Before I come to the detail of the amendment, I should re-emphasise the point made by my hon. Friend the Member for Tamworth about the volume of amendments to clause 38 in particular, which is why I asked for the amended clause with track changes to be circulated to the whole Committee. I hope that Members have found that useful.
Turning to the amendment, I have a lot of sympathy for what my hon. Friend is trying to achieve. It is important that we monitor progress on the Mansion House commitments and continue to stay focused on the strength of the pipeline. There are parts of the Bill that would already facilitate that, including data collection that is consistent with monitoring the Mansion House progress, and the strength of the pipeline, which was obviously relevant to consideration of the saver’s interest test, and thus left in the Bill. I suggest that, given our sympathy with the idea of this amendment but its interactions with several other existing parts of the Bill, we commit to reviewing it with a view to deciding whether we should come back with something similar on Report, if the hon. Lady is content with that.
Sarah Edwards
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 105, in clause 38, page 43, line 7, at end insert—
“(and for that purpose, a provision of the trust deed or rules of the scheme is ‘in conflict’ with provision under this section so far as the former does not allow for the assets of the scheme to be managed in such a way as to meet the conditions for approval under this section)”.
This amendment clarifies the application of section 28C(14).
Amendment 106, in clause 38, page 43, line 8, leave out subsection (15).—(Torsten Bell.)
This amendment is consequential on Amendment 129.
Torsten Bell
I beg to move amendment 107, in clause 38, page 43, line 9, at end insert—
“28CA Information
(1) Regulations may make provision about information that the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme must give to the Regulatory Authority about the allocation of assets of the relevant Master Trust or group personal pension scheme.
(2) The regulations may make provision about—
(a) the types of information that must be given;
(b) when it must be given;
(c) the form and manner in which it must be given.”
This new section would allow regulations to require the provision of information about asset allocation to the Secretary of State and the Regulatory Authority.
The amendment is supplementary to a provision in the introduced Bill, proposed new section 28C(10)(d), which permits the Government to make regulations about the provision to regulators of information relating to the allocation of assets by the relevant pension providers. The amendment ensures that, in the event that the regulator does not possess crucial information that the Government require in order to design the possible asset allocation framework, or to write the report on saver and growth impacts that they will be legally required to produce, the Government can obtain that information via the regulators.
Kirsty Blackman
I want to ask the Minister why the amendment has been tabled. Have the regulators asked for it so that they can get the information they need, or has the provision been identified by the Government? Basically, what consultation is being done to ensure that the amendment makes sense and is doing what people need it to do?
Torsten Bell
The direct answer is that, yes, the amendment comes from discussions with regulators, to make sure that the flow of information is sufficient to live up to Parliament’s intent and that meaningful reports on the saver and growth impacts can be provided.
Amendment 107 agreed to.
Torsten Bell
I beg to move amendment 108, in clause 38, page 43, line 19, at end insert “, and
(b) has a credible plan in place for meeting the scale requirement within the meaning of section 28A(2)”.
This amendment makes it a condition of approval for transition pathway relief that a Master Trust has a credible plan in place for meeting the scale requirement.
Torsten Bell
This group of amendments deals with the transition pathway relief, which we touched on earlier in the context of support for innovation within the pension landscape.
First, amendments 108 and 109 amend proposed new section 28D so that, to be approved on the transition pathway, a master trust or group personal pension scheme respectively must produce a credible plan for meeting the scale requirements, before the end of the pathway. I should clarify what I said earlier, sorry—this is the transition pathway; we are not talking about the new entrant pathway.
In addition, via amendment 131, we are inserting new subsection (15A) into clause 38, to ensure that the pathway will expire five years after the scale requirements come into force. We accept that in certain circumstances schemes may need more time to reach scale, but we want the end destination—going back to our conversation about scale and certainty that scale will be achieved—to be clear. I commend these minor amendments to the Committee.
Mark Garnier
I thank the Minister for talking through the amendments. We understand the intention behind them, but we are worried that, as can often be the case, there may be an unintended consequence: the creation of a closed shop for master trusts. We do not want suddenly to find that, in trying to make a transition pathway, we end up making things more difficult because it has been interpreted in the wrong way. We are minded to oppose the amendments, but perhaps the Minister could instead give us his thoughts on how we can ensure that they do not get used the wrong way and that we do not end up with a closed shop of master trusts.
Steve Darling (Torbay) (LD)
I echo what the shadow Minister has just highlighted. We all want the reform that the Bill introduces, but we do not want what results from this process to be set up forever, with a lack of opportunity for change; I will talk a little further about that when we come to new clause 3. Some reassurance from the Minister that there is an opportunity for new entrants and innovation would be extremely welcome.
Torsten Bell
I apologise for my slip of the tongue at the start of my speech. This group of amendments deals with transition pathway relief. Here, in many cases we are talking about existing schemes that may not meet the £25 billion threshold, but which have a plausible path to that scale requirement over the following five years—I think that is a point of consensus across the Committee. That is what we are engaging with here. It is a reasonable approach to avoid a cliff edge, for exactly the reason that the shadow Minister set out.
Mark Garnier
I completely understand that. The question is, what is plausible? One man’s plausible might be another man’s impossible. That is the bit that we are worried about: how to ensure that someone is not squeezed out who otherwise could be in it.
Torsten Bell
I completely recognise that. Let me say a few words about how we have tried to balance those tests. We want to see the industry get to scale, and we want clarity about what the end point is, but we want to provide a pragmatic approach to how we get there. Balancing that is what drove us to the five-year approach, which is different from some of the earlier discussions in the pensions investment review about an earlier, harder deadline of 2030.
Within the Bill there is flexibility for regulators where people are just approaching the deadline or in other situations, to avoid difficult situations where people’s authorisation is put into question at short notice. That is important, but so is providing the clarity that they will be required to get to scale. It cannot be a never, never. It needs to be a pathway to a destination; it cannot just be a hope.
I think that we have taken a pragmatic, balanced approach, but I appreciate that others will have their views. There will be those in the industry who will worry that they may not be on track to meet those scale requirements, but that is in the nature of the beast of our saying that the industry needs to change. I appreciate that that will mean some change for some organisations. We have tried to be flexible and to take a pragmatic approach.
Amendment 108 agreed to.
Amendments made: 109, in clause 38, page 43, line 28, at end insert—
“, and
(b) has a credible plan in place for meeting the scale requirement within the meaning of section 28B(2).”
This amendment makes it a condition of approval for transition pathway relief that a group person pension scheme has a credible plan in place for meeting the scale requirement.
Amendment 110, in clause 38, page 43, line 33, leave out “authorisation” and insert “approval”.
This amendment is to ensure that new section 28D of the Pensions Act 2008 refers correctly to an approval under new section 28A or 28B of that Act.
Amendment 111, in clause 38, page 44, line 15, after “20(1A)” insert “or section 26(7C)(c)”.—(Torsten Bell.)
This amendment corrects an omission so that new section 28E of the Pensions Act 2008 works effectively for group personal pension schemes.
Torsten Bell
I beg to move amendment 112, in clause 38, page 44, line 20, at end insert—
“(za) the scheme in question does not yet have any members,”
This amendment ensures that relief under section 28E is only available to schemes that are not yet operational.
The Chair
With this it will be convenient to discuss the following:
Government amendments 113 to 115.
New clause 3—New market entrants: scale and asset allocation—
“(1) In making regulations under Chapter 3, the Secretary of State must have regard to the need to identify and mitigate barriers faced by new market entrants in the defined contribution pensions market.
(2) The Secretary of State must consider how regulations will—
(a) foster a competitive environment that supports innovation among new and existing providers;
(b) ensure fair access to the market for schemes with strong potential for growth and an ability to innovate, including those not yet meeting prescribed scale thresholds.”
This new clause would require the Secretary of State to consider the effect of regulations under Chapter 3 on scale and asset consolidation on new market entrants.
Torsten Bell
These amendments clarify aspects of the approval criteria for prospective new entrants into the multi-employer DC market after the scale requirements come into force. Amendment 112 requires that a new prospective provider must have no current members—it must actually be new to the market. We want to ensure that the route is used only by those for whom it is intended, rather than as a loophole around the main intent of the Bill.
Amendment 113 requires that new entrants have strong potential to grow in order to meet the scale requirements under section 28A, and that the prospective scheme in question has an innovative product design. I think we will come to the question of product shortly, but to skip ahead, the regulations would allow us to talk about innovation in the nature of the service, not just in the product. That is a question for us to take away in the design of those regulations. That is not in the Bill itself, but it is an important clarification.
The remaining amendments in this group are consequential on amendment 113. They will offer greater clarity to potential applicants to this pathway, and I commend them to the Committee.
I thank the hon. Member for Torbay for tabling new clause 3 and acknowledge his wish that the pathway for new entrants into the DC multi-employer market be as supportive as possible for new providers. We of course agree with that sentiment. We want to see fewer, bigger schemes, but not a lack of competition in the longer run, even though we are a long way from that.
From an innovation viewpoint, the new clause is not necessary to achieve that aim. Competition will come from the possibility of innovation, but must also flow into the building of scale, which is the overall intent of the legislation. Given that the spirit of the new clause is achieved by the new entrants pathway, I ask the hon. Gentleman not to press it to a vote.
Steve Darling
It is a pleasure to serve under your chairmanship, Mr Turner.
Will the Minister put a little more flesh on the bone in respect of the ladder of opportunity for new entrants? We need to make sure that we do not end up with a system with large schemes and nobody being able to get into the super-league of opportunity that we have currently. We want to see innovation over time and hoped that, through the new clause, we could bake that into the system. We can have aspirations for how future Ministers deal with these matters, but we must give confidence to the industry in respect of future entrants, so that it continues to be a vibrant industry that drives investment and growth for people’s pensions. That is essential. We would be extremely grateful for some more flesh on the bone.
Kirsty Blackman
I appreciate the Minister’s clarification that I had talked about amendment 113 prematurely, but it was relevant in the context of the previous discussion.
I also appreciate the Minister’s clarification on the definition of “product”. I understand why he wants to make the amendment to tighten the Bill up a wee bit; however, it potentially tightens it up too much. Before Report, will he consider whether the use of the word “product” is right? Does he need to look at including that word in the definitions provided at the end of clause 38—I do not think it is currently included—to cover not only the physical things or offerings to people in terms of the products and investments they could look at, but the niche and specific service provision that might be attractive to people who are looking to invest their pensions because they have specific life conditions, or because their life and work does not fit into a normal box? I appreciate the earlier clarification in respect of the default products, which was incredibly important and helped to clarify my mind, but it would be helpful if the Minister agreed to take away my suggestion.
I can understand why the Liberal Democrats tabled new clause 3. We should consider where we are with the innovation pathway, and the fact that the new entrant pathway exists and the relevant regulations have not yet been created. I assume that the Minister and his team will listen to a huge number of people. Clause 38 says that
“such persons as the Secretary of State considers appropriate”
must be consulted; I hope that will be a wide group of people with significant experience in the industry.
Given that so many of us have mentioned challenger banks and new financial institutions, perhaps the consultation will look at what has been learned in that respect and whether some of the innovative decisions, and the regulations that allowed the provision of innovative products, should be included in the scope of the regulations. I would rather the innovation be quite wide, rather than quite tight, given that the scale thresholds and requirements have to be met anyway.
If somebody has a credible plan to reach that scale, surely pretty much any of the innovative solutions they may be suggesting are good, because they are also providing a credible plan to get that significant level of scale and the efficiencies that come along with that. Potentially the definition of products in the defined terms at the end could be a good vehicle for the Minister to ensure that the scope is as wide as he would like it to be.
John Milne (Horsham) (LD)
To add briefly to the comments of my hon. Friend the Member for Torbay, I emphasise that with new clause 3 we are taking a non-prescriptive approach. It says that
“the Secretary of State must have regard to the need to identify and mitigate barriers faced by new market entrants in the defined contribution pensions market.”
It is a very gentle ask. We are all very aware of the issues today, but will they still be in everybody’s mind in the future?
Torsten Bell
I will come back on the question about the word “product” and definitions. I reassure the Committee that I will go away and make sure that is clear if it is not clear enough already.
The core Liberal Democrat question is, are we baking innovation in? It is a good question for us all to be asking. I think the answer is yes. To broaden the conversation out slightly, we want to see innovation from existing providers as well. We anticipate that there will still be 15 or so large providers in the 2030s. That is still a highly competitive market. Not just looking at costs but also at customer service and all the rest in the value for money regime should be a spur to that innovation. That is a key part of the set of clauses we were discussing last week.
I should explicitly note that the scale tests do not cover the most obvious innovation that is likely to come in the market in the coming years, which is CDC schemes. By their nature, if they are to be successful, they will get to scale anyway, but to make their path easier and to be clear that we do see a role for CDC innovation moving forward, those are not part of these requirements. The innovation pathway exists for exactly this reason, as we have discussed.
Several Members have raised a question about consultation. I confirm that there is a requirement for a public consultation, which should certainly learn lessons that go beyond the experience of the pensions industry to the wider financial services sector—lessons of competition entry. We talked about that in the banking sector earlier, but the same thing would apply, for example, to other parts of the insurance sector and others. We will take that away. We are very conscious at the moment, in our wider approach to regulation, of providing earlier authorisation, where that can be done. I suspect we may come back to that in the superfunds discussion later this week.
Amendment 112 agreed to.
Amendments made: 113, in clause 38, page 44, leave out lines 21 and 22 and insert—
“(a) the scheme in question has strong potential to grow so as to meet the scale requirement under section 28A,
(aa) the scheme in question has an innovative product design, and”.
This amendment ensures that the eligibility conditions for new entrant pathway relief are more precisely articulated.
Amendment 114, in clause 38, page 44, line 34, leave out from “of” to “(including” in line 35 and insert “ “strong potential to grow” and “innovative product design” ”.
This amendment is consequential on Amendment 113.
Amendment 115, in clause 38, page 44, line 36, leave out from “has” to end of line 37 and insert “strong potential to grow or an innovative product design”.
This amendment is consequential on Amendment 113.
Amendment 116, in clause 38, page 45, leave out lines 1 and 2.—(Torsten Bell.)
This amendment is consequential on Amendment 129.
Torsten Bell
I beg to move amendment 117, in clause 38, page 45, line 4, leave out “may” and insert “must”.
This amendment, together with Amendment 118, means that regulations about suspending the requirement for approval under section 28C have to have effect at any time when section 28C has effect as a result of regulations under that section.
Torsten Bell
This is a group of minor amendments, mostly aiming at improving the clarity of proposed new section 28F, for example by removing duplication. I draw Members’ attention to the most significant amendments, which are amendments 117 and 118. They make clear that the Government must introduce the savers’ interest exemption mechanism if they are to introduce asset allocation requirements. That is a “must” rather than a “may” because the Government’s intention is that there must always be a savers’ interest exemption.
Kirsty Blackman
I have a brief comment on Government amendment 117. Because there were so many amendments, it was quite difficult to ensure that the Minister went through all of them with a fine-toothed comb. The explanatory statement for this one does not make any sense to me—it perhaps makes sense to other people. Reading the explanatory statement was deeply unhelpful, and I ended up being more confused than I was before. I appreciate the intention—what the Minister said amendment 117 was for—and the way that he described the rest of the amendments in this group, but I am pointing out for future reference that it would be helpful if we could understand the explanatory statements.
Torsten Bell
Noted.
Amendment 117 agreed to.
Amendments made: 118, in clause 38, page 45, line 9, at end insert—
“(1A) The Secretary of State must make regulations under subsection (1) so that they have effect whenever regulations under section 28C(1) or (2) have effect.”
See the explanatory statement for Amendment 117.
Amendment 119, in clause 38, page 45, line 14, leave out “the scheme or”.
This amendment means the asset allocation requirement can only be suspended where it would cause material financial detriment to the members of a scheme.
Amendment 120, in clause 38, page 45, line 15, leave out from “the scheme” to end of line 17.
This amendment simplifies the description of what may be done by regulations under new section 28F(1).
Amendment 121, in clause 38, page 45, line 17, at end insert—
“(aa) may make provision about the basis on which the Authority may or must form such a view, including about the evidence which the Authority may or must take into account;”.
This amendment clarifies that the regulations can circumscribe the basis on which the FCA or TPR can reach a view on the material financial detriment test in subsection (2)(a).
Amendment 122, in clause 38, page 45, line 23, at end insert—
“(c) must provide for the Authority’s determination on an application to be referred to the Upper Tribunal.”
This amendment ensures that decisions on an application for the suspension of the asset allocation requirement will be referable to the Upper Tribunal.
Amendment 123, in clause 38, page 45, leave out lines 24 to 26.
This amendment is consequential on Amendment 121.
Amendment 124, in clause 38, page 45, line 28, after “as” insert “material”.
This ensures that regulations under subsection (4) can also make provision about what kind of detriment is classed as “material”.
Amendment 125, in clause 38, page 45, line 30, leave out subsection (5).—(Torsten Bell.)
This amendment is consequential on Amendment 129.
Torsten Bell
I beg to move amendment 127, in clause 38, page 45, line 31, at end insert—
“28G Risk notices
(1) The Regulatory Authority (‘the Authority’) may give a risk notice to the trustees or managers of a relevant Master Trust if the Authority considers that—
(a) there is an issue of concern in relation to the relevant Master Trust, and
(b) the relevant Master Trust will, or is likely to, cease to meet the conditions for approval under section 28A or 28C if the issue is not resolved.
(2) A ‘risk notice’ is a notice that requires the trustees or managers of a relevant Master Trust to submit to the Authority a plan (a ‘resolution plan’) setting out proposals for resolving the issue of concern.
(3) A risk notice must—
(a) identify the issue of concern;
(b) specify the date by which the resolution plan is to be submitted.
(4) If the Authority is not satisfied that the proposals in a resolution plan are likely to be adequate to resolve the issue of concern, the Authority may give a further notice to the trustees or managers requiring them to submit a revised plan by a date specified in the notice.
(5) The trustees or managers must implement the proposals in a resolution plan if the Authority—
(a) is satisfied that the proposals are likely to be adequate to resolve the issue of concern, and
(b) notifies the trustees or managers accordingly.
(6) The Authority may direct the trustees or managers to comply with the requirement imposed by subsection (5).
(7) Where the trustees or managers are required by subsection (5) to implement the proposals in a resolution plan, they must—
(a) submit to the Authority, before the end of a period specified in regulations, a report setting out what progress they are making in implementing the proposals (a ‘progress report’);
(b) submit further progress reports to the Authority at intervals specified by the Authority.
(8) Resolution plans and progress reports must be provided in the manner and form specified by the Authority.
(9) A reference to a resolution plan in subsections (4) to (8) includes a reference to a resolution plan as revised under subsection (4).
(10) Regulations may—
(a) specify information that a risk notice must contain;
(b) provide that the date referred to in subsection (3)(b) or (4) must fall before the end of a period specified in the regulations.
(11) Section 10 of the Pensions Act 1995 (civil penalties) applies to a trustee or manager of a relevant Master Trust who fails to comply with—
(a) a notice under subsection (1) or (4),
(b) a direction under subsection (6), or
(c) a requirement imposed by subsection (7).”
This amendment allows the Regulatory Authority to issue risk notices to the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme if there were an issue in relation to the scheme relating to the quality requirement.
Torsten Bell
These amendments relate to compliance and enforcement. Government amendment 127 allows the Pensions Regulator to issue risk notices to the trustees or managers of a relevant master trust or the provider of a group personal pension scheme if there were an issue in relation to the scheme relating to the quality requirement. This will require the relevant master trust to develop a resolution plan to address the regulator’s concerns. The regulator may then direct the relevant master trust to implement the measures in that plan.
Amendment 128 allows regulations to make provision for the imposition of penalties where a relevant master trust or GPP scheme accepts contributions from an employer when it should not. It will allow the regulator to issue penalties of up to £100,000 in relation to each employer from which contributions continue to be accepted. It will also give the provider the right of appeal against the penalty.
Amendment 126 enables the FCA to monitor and enforce compliance of any FCA-regulated person in scope of chapter 3 of part 2 of the Bill. It also provides that the Treasury may make regulations to enable the FCA to take action for monitoring and enforcing compliance of any FCA-regulated person with any provision under chapter 3. I commend the amendments to the Committee.
Kirsty Blackman
It looks like these amendments came up because of conversations with the regulator, which is looking to ensure that it can use the powers that the Bill intends to create. This is not the first time we have had amendments that have been suggested by the regulator. I would appreciate it if the Minister could go away, and, perhaps when he is making regulations or bringing forward future legislation on pensions, ensure that he has more in-depth chats with the regulator in advance, so the original legislation can be drafted in a way that will work for the regulator, rather than having to be amended after Second Reading.
Torsten Bell
Point noted.
Amendment 127 agreed to.
Amendments made: 128, in clause 38, page 45, line 31, at end insert—
“28H Penalties
(1) Regulations may make provision about the imposition by the Regulatory Authority of a penalty on the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme where the scheme—
(a) fails to meet the condition in section 20(1A) by virtue of not being approved under section 28A or 28C, and
(b) accepts contributions from an employer in relation to a jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder.
(2) Regulations may make provision about the imposition by the Regulatory Authority of a penalty on the provider of a group personal pension scheme where the scheme—
(a) fails to meet the condition in section 26(7A) or (7B), and
(b) accepts contributions from an employer in relation to a jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder.
(3) The regulations must provide—
(a) that a penalty must not exceed £100,000 in relation to each employer from which contributions are accepted as mentioned in subsection (1)(b) or (2)(b), and
(b) that there is a right of appeal against the imposition of the penalty.”
This amendment allows regulations to make provision for the imposition of penalties where a relevant Master Trust or a group personal pension scheme accepts contributions from an employer in relation to a jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder.
Amendment 126, in clause 38, page 45, line 31, at end insert—
“28I Enforcement by the Financial Conduct Authority
(1) The Treasury may make regulations to enable the Financial Conduct Authority to take action (in addition to any action it may otherwise take under the Financial Services and Markets Act 2000) for monitoring and enforcing compliance of any FCA-regulated person with any provision of or under this Chapter.
(2) The regulations may apply, or make provision corresponding to—
(a) provision made by or under this Part in relation to the Regulator, or
(b) any provision of the Financial Services and Markets Act 2000,
with or without modification.
(3) In this section, ‘FCA-regulated person’ means an authorised person (within the meaning of the Financial Services and Markets Act 2000).”
This amendment allows monitoring and enforcement functions to be conferred on the FCA in relation to the compliance of FCA-regulated persons with provisions of or under Chapter 1 of the Pensions Act 2008, including the new provisions on scale and asset allocation.
Amendment 129, in clause 38, page 46, line 9, leave out subsection (14) and insert—
“(14) In section 99 (interpretation of Part)—
(a) the existing words become subsection (1);
(b) in that subsection, at the appropriate places insert—
‘“group personal pension scheme” means a personal pension scheme which is available, or intended to be available, to employees of the same employer or of employers within a group, but does not include—
(a) a stakeholder pension scheme (as defined in section 1 of the Welfare Reform and Pensions Act 1999), or
(b) any pension scheme that requires all its members to make a choice as to how their contributions are invested;’;
‘“Regulatory Authority” has the meaning given by regulations under subsection (2);’;
‘“relevant Master Trust” has the meaning given by section 20(4);’;
(c) after that subsection insert—
‘(2) The Secretary of State may by regulations define “Regulatory Authority” for the purposes of this Part.’”
This amendment consolidates certain interpretative provisions. It also amends the definition of “group personal pension scheme” so that only schemes where all members select their investment approach are excluded.
Amendment 130, in clause 38, page 46, line 19, leave out “26(7A), 28E” and insert—
“26(7A), (7B), (7C) or (7E),”.
This amendment, together with Amendment 132, ensures that regulations relating to the new scale and asset requirements are subject to affirmative parliamentary procedure.
Amendment 131, in clause 38, page 46, line 20, at end insert—
“(15A) The following provisions of the Pensions Act 2008 (which relate to transition pathway relief) are repealed at the end of the period of 5 years beginning with the day on which they come into force—
(a) paragraph (c) of Condition 1 in section 20(1A);
(b) section 26(7C)(b);
(c) section 28D;
(d) the word ‘28D’ in section 143(5)(a).”
This amendment provides for transition pathway relief to cease to be available 5 years after the commencement of the scale requirement.
Amendment 132, in clause 38, page 46, line 20, leave out “28C,” and insert—
“28C (other than subsection (10)(d))), 28D, 28E, 28F, 28H, 28I,”.
See the explanatory statement for Amendment 130.
Amendment 133, in clause 38, page 46, line 21, leave out subsection (16) and insert—
“(16) If this section is repealed under section 101(5A) (repeal where asset allocation requirement uncommenced) in respect of the insertion of the provisions mentioned in that subsection, the Secretary of State may by regulations amend this section in consequence of that repeal.
(17) Regulations under subsection (16) are subject to the negative procedure.”—(Torsten Bell.)
This amendment is related to Amendment 228. It allows for regulations to be made tidying up the various references to the asset allocation requirement in clause 38 in the event that the power to commence that requirement is never exercised.
Question put, That the clause, as amended, stand part of the Bill.
Torsten Bell
I beg to move amendment 134 in clause 39, page 46, line 36, after “2008” insert—
“in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,”
This amendment, together with Amendment 135, ensures that provisions in or under the Pensions Act 2008 are added to section 204A of the Financial Services and Markets Act 2000 (meaning of “relevant requirement” and “appropriate regulatory”) only so far as they relate to the scale requirement or the asset allocation requirement.
The Chair
With this it will be convenient to discuss the following:
Government amendments 135 to 137.
Clause stand part.
Clause 40 stand part.
Torsten Bell
As amended, the clause introduces consequential amendments relating to clause 38 to ensure that the changes needed for the asset allocation and scale measures appropriately wire into existing legislation. The clause does this by making amendments to the Financial Services and Markets Act 2000 and the Pension Schemes Act 2017. The clause makes an insertion into section 1A and an amendment to section 204A of the 2000 Act. It ensures that the FCA’s statutory functions are extended, which would include its new enforcement functions for clause 38 in relation to scale and asset allocation.
The second part of the clause adds new authorisation criteria for master trusts into the 2017 Act. These new criteria will require trustees of a master trust to satisfy the Pensions Regulator that they have a sufficient investment capability and continue to have a main scale default arrangement. Introducing these criteria will enable implementation of the Government’s policy objective, set out in the final report of the pension investment review, to ensure schemes utilise the benefits of scale to deliver better investment outcomes.
The clause sets out factors that the Pensions Regulator will be required to consider in deciding that the master trust authorisation criteria are met and enables further detail to be set out in regulations. The effect of these additions to the authorisation regime are essential as they help to drive capability within master trusts. I commend clause 39 to the Committee.
Government amendments 134 and 135 ensure that the necessary extension of the FCA’s authorisation functions under FSMA encompass only its new role in overseeing the scale and asset allocation requirements and does not extend to other non-relevant requirements in the Pensions Act 2008. It has a constraining effect.
Government amendment 136 makes it clear that the addition to section 5 in part 1 of the Pension Schemes Act 2017 regarding decisions on application is about the scheme meeting the scale requirements under condition 1 of section 20(1)(a) of the Pensions Act 2008. Government amendment 137 gives the Secretary of State the ability to set out the meaning of terms in specific areas. I urge Members to support Government amendments 134 to 137.
Clause 40 deals with the application of scale and asset allocation measures to Crown schemes. The substantive provisions in chapter 3 take the form of amendments to the Pensions Act 2008, the Pension Schemes Act 2017 and the Financial Services and Markets Act 2000. These Acts already deal with application to the Crown in their own way, and it is not the intent of the Government to disrupt or confuse these settled positions. Accordingly, after consideration, we seek to delete this clause. To be clear, I do not commend the clause to the Committee.
Amendment 134 agreed to.
Amendments made: 135, in clause 39, page 46, line 38, after “2008” insert
“in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,”
See the explanatory statement for Amendment 134.
Amendment 136, in clause 39, page 47, line 10, leave out “quality” and insert “scale”
This amendment changes a parenthetical description so that it is clearer.
Amendment 137, in clause 39, page 47, line 27, leave out from “(2)” to end of line 32 and insert—
“(4) The Secretary of State may by regulations—
(a) make provision about the meaning of terms used in subsection (2);
(b) specify further factors that the Pensions Regulator must take into account in deciding whether it is satisfied about the matters mentioned in subsection (1).
(5) The first regulations that are made under this section are subject to affirmative resolution procedure.
(6) Any other regulations under this section are subject to negative resolution procedure.”— (Torsten Bell.)
This amendment expands the power currently in the new section 12A(3) of the Pension Schemes Act 2017, created by clause 39(11) of the Bill, so as to allow the Secretary of State to make provision about the meaning of terms in new section 12A(2) of the Pension Schemes Act 2017.
Torsten Bell
I beg to move amendment 138, in clause 39, page 47, line 32, at end insert—
“12B Scale requirement
(1) The Secretary of State may by regulations make provision about how the Pensions Regulator is to decide whether it is satisfied that a Master Trust scheme that has its main administration in the United Kingdom meets Condition 1 in section 20(1A) (scale requirement) of the Pensions Act 2008.
(2) The regulations may, among other things, specify matters which the Pensions Regulator must take into account in making its assessment.
(3) The first regulations under this section are subject to affirmative resolution procedure.
(4) Any subsequent regulations under this section are subject to negative resolution procedure.”
This amendment inserts in the Pension Schemes Act 2017 a power to make regulations about how the Pensions Regulator is to decide whether a Master Trust meets the scale requirement.
It is with some relief that I reassure Members this is the last amendment to this section of the Bill. Government amendment 138 amends one of the new authorisation criteria for master trusts that the Bill inserts into the Pension Schemes Act 2017, which provides that a master trust scheme must meet the scale requirement. It grants the Government the power to make regulations about how the pensions regulator should satisfy itself that a master trust scheme has met the scale requirements. I commend the amendment to the Committee.
Amendment 138 agreed to.
Clause 39, as amended, ordered to stand part of the Bill.
Clause 40 disagreed to.
Clause 41
FCA-regulated pension schemes: contractual override
Torsten Bell
I beg to move amendment 140, in clause 41, page 48, line 22, after “2008” insert “or section 3(2), 5(2) or 7(3) of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.))”
This amendment extends the application of the contractual override measure to Northern Ireland pension schemes.
The Chair
With this it will be convenient to discuss the following:
Government amendments 141 to 146.
Clause stand part.
Torsten Bell
We now come to the contractual override part of the Bill. This group of amendments expands the scope of clause 41 to apply to Northern Ireland pension schemes. Just like in Great Britain, many pension scheme members in Northern Ireland will be in arrangements delivering poor value and outcomes. However, due to a lack of engagement from members, there is often little providers can do to address that. Extending these changes to Northern Ireland will help to solve that. These amendments will create better outcomes for pension scheme members in Northern Ireland, and I therefore ask the Committee to support these amendments.
Amendments 143 and 144 add another layer of consumer protection to the already rigorous consumer protections we have included in the Bill. Currently a provider is required to receive certification from an independent person with sufficient expertise that the best interest test has been met. To clarify, that test requires the provider that wishes to use the contract override to carry out an assessment that it is in the interests of scheme members that the override take place. That test then has to be certified by an independent person. This is about strengthening that independent person test. The amendments require the Treasury to make regulations defining “independence” by specifying requirements which must be met by an independent person before they can be appointed, and ensure that the independent person has no conflict of interest. The FCA is then required to include the provisions made by these regulations in its rules. The amendments make an important change to the Bill by ensuring there will be clear rules on who can undertake this important role, and I therefore commend them to the Committee.
Clause 41 inserts proposed new part 7A, on what we call the contractual override mechanism—referred to as a unilateral change—into the Financial Services and Markets Act 2000. This will enable providers of FCA-regulated, defined-contribution workplace pension schemes —note we are talking about FCA-regulated, defined-contribution workplace schemes only—to override the terms of a pension scheme without the consent of members and either transfer members to a different pension scheme, make a change that would otherwise require consent, or vary the terms of members’ contracts, but only when certain clear conditions, including most importantly the best interest test, are met. This will establish broad equivalence with the trust based market, where these changes are already available, so trustees already have these powers within the trust-based market. It will also create better outcomes for consumers, deliver on a long-awaited industry ask, and help drive scale and consolidation within the sector, achieving the consolidation we talked about in relation to the previous clause. It is an important enabler of those changes.
The clause also amends sections 105, 168 and 429 of FSMA to ensure that the contractual override mechanism can work as intended, and to ensure that the appropriate parliamentary procedures apply to regulations that are made under this part, and that amend or repeal primary legislation. I commend the clause to the Committee.
Amendment 140 agreed to.
Amendments made: 141, in clause 41, page 48, line 24, leave out from “member”” to end of line 25 and insert
“means an active member within the meaning of Part 1 of the Pensions Act 2008 (see section 99 of that Act) or Part 1 of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.)) (see section 78 of that Act).”
This amendment is consequential on Amendment 140.
Amendment 142, in clause 41, page 48, line 33, leave out from “arrangements”” to end of line 34 and insert
“means direct payment arrangements within the meaning of section 111A of the Pension Schemes Act 1993 or section 107A of the Pension Schemes (Northern Ireland) Act 1993.”— (Torsten Bell.)
This amendment is consequential on Amendment 140.
Sarah Edwards
I beg to move amendment 278, in clause 41, page 49, line 26, at end insert
“and only after VFM assessments are available to the Trustees as part of the decision making process.”
This amendment would restrict external transfers until VFM assessments are available to ensure that Trustees can carry out their fiduciary duty.
The amendment relates to contractual override. It may have been covered in the new drafting of the clauses, as it was tabled on the previous text. The Minister may have seen this potential eventuality, and it may be provided for elsewhere, but we have spoken at length in Committee about the importance of pensions adequacy and about the landscape moving towards a higher membership of defined-contribution schemes.
The amendment is an attempt to bridge the gap presented by the delay between the regulations’ implementation, and to ensure that investments are made not on the basis of low-cost, low-risk funds prior to the regulations being implemented, which potentially would lock down investments. It is another small addition that clarifies the importance of the value for money framework, which the Bill is championing, and it adds to the requirement of consent in the provision by adding focus on ensuring that value for money assessments are available prior to the transfer, as an extra protection for trustees to carry out their fiduciary duty.
Torsten Bell
I thank my hon. Friend. She is right that it is important that we think through how to line up the value for money work with the question we are now turning to on contractual overrides. I will come back to distinguish between the data that comes through the value for money process and the actual formal assessments themselves, which is what is referred to in the amendment. We agree that the value for money data is vital for ensuring consumer protections, and it is why the implementation of the contractual override mechanism is already being timed so that it is in conjunction with the value for money framework. The very keen can read that in the road map we set out in June, which gets into exactly those questions.
To go into a bit more detail—and I appreciate that my hon. Friend already knows this—the data for the value for money assessment will be available ahead of the formal assessments, and it is on that basis that people will be able to go ahead with some forms of contract override—for example, when they are moving members within parts of the individual providers, so they would have all the information that they require.
My hon. Friend raised a specific question about when people are being transferred between schemes. Should that always wait for the full value for money assessments? I will give her another commitment that I will take that away and consider it. There may be some circumstances in which that information is available, and we do not wish to unduly constrain providers, but it is a reasonable point for us to be discussing. As I say, she is right to raise the point about the interaction between the value for money data, including its visibility to other people, and the contractual override. If she is happy to withdraw the amendment, I will consider whether we can provide further clarity on the point on Report.
Sarah Edwards
On that basis, I am happy to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mark Garnier
I beg to move amendment 257, in clause 41, page 53, line 7, at end insert—
“117GA FCA guidance
(1) The FCA must issue guidance on contractual overrides.
(2) Guidance on contractual overrides must include—
(a) when and how overrides can be used;
(b) how to demonstrate transfers are always in members’ best interests; and
(c) how contractual overrides are independently certified.”
Amendments 255, 256 and 257 ensure that contractual override powers are operational in advance of the first value for money assessments.
The amendment is very similar to amendment 278, which was tabled by the hon. Member for Tamworth. The industry has highlighted to us a concern that the Government’s proposed sequencing will not provide enough time between contractual overrides becoming permissible and VFM assessments being conducted, which will totally undermine the effectiveness of consolidation and value improvement. Pensions UK has encouraged the Government to accelerate that and to bring forward the implementation to allow schemes to make progress on consolidation sooner, so that the override is in place well in advance of the VFM framework.
We drafted amendment 257 with the idea that if transfers took place before the VFM framework was implemented, further guidance from the FCA would be required on how and when overrides could be used. However, we welcome the compromise set out in amendment 278, which would ensure that external transfers do not take place until VFM assessments are available. Frankly, that amendment is better-crafted than ours. If we had done them the other way around, I would have deferred to the advice of the hon. Member for Tamworth on whether she wanted to move the amendment. She was right to withdraw her amendment, and we will withdraw ours, but I urge the Minister to write to us both on the outcome of this matter before Report. It would be useful to have his comments beforehand so that we can challenge him on Report, and possibly move the amendment again—who knows?
Torsten Bell
As the hon. Member has asked so kindly, I assure him that I will write to him and to my hon. Friend the Member for Tamworth ahead of Report.
Mark Garnier
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 143, in clause 41, page 53, line 8, leave out “Powers to make” and insert “Treasury”.
This amendment is consequential on Amendment 144.
Amendment 144, in clause 41, page 53, line 25, at end insert—
“(1A) The Treasury must by regulations require the FCA to include provision of a description specified in the regulations in general rules made in compliance with section 117E(4)(a) (how to determine whether a person is independent), alongside any other provision included in such general rules.
(1B) Regulations under subsection (1A) must in particular require the FCA to include in such general rules provision designed to ensure that the independent person does not have a conflict of interest.”
This amendment requires the Treasury to make regulations about the requirements that need to be met by an independent person appointed under section 117E.
Amendment 145, in clause 41, page 53, line 38, leave out from “benefits”” to end of line 39 and insert
“means money purchase benefits within the meaning of the Pension Schemes Act 1993 (see section 181(1) of that Act) or the Pension Schemes (Northern Ireland) Act 1993 (see section 176(1) of that Act);”.
This amendment is consequential on Amendment 140.
Amendment 146, in clause 41, page 54, line 3, leave out from “scheme”” to end of line 4 and insert
“means a personal pension scheme within the meaning of the Pension Schemes Act 1993 (see section 1(1) of that Act) or the Pension Schemes (Northern Ireland) Act 1993 (see section 1(1) of that Act);”.—(Torsten Bell.)
This amendment is consequential on Amendment 140.
Clause 41, as amended, ordered to stand part of the Bill.
Clause 42
Default pension benefit solutions
Torsten Bell
I beg to move amendment 147, in clause 42, page 55, line 9, leave out “eligible members” and insert “each eligible member”.
This amendment clarifies that trustees or managers are required to make a default pension benefit solution available to every eligible member of the scheme.
The Chair
With this it will be convenient to discuss the following:
Government amendments 148 to 155.
Clause stand part.
Torsten Bell
We now move from the contractual override provisions of the Bill to the default pension benefit solutions. This is a material change to our pension landscape, as the defined contribution landscape has matured, as I will come to. Again, I am glad that there has generally been cross-party consensus on the issue.
Clause 42 is pivotal in ensuring that members of defined-contribution pension schemes are provided with default options for pension benefit solutions when they want to access their pension assets, thereby reducing the complexity for individuals of securing an income in and through later life. These solutions must be designed to provide a regular income to members during retirement. The clause makes provision for an exemption where that would not be appropriate. We intend to set out in regulations what is meant by
“designed to provide a regular income”
and by “retirement”.
Members will have access to pre-designed benefit solutions that are tailored to meet the needs of the scheme’s membership. The intention is that, normally, individuals need not make a decision about how they would take their pension benefits, except to confirm that they want to start receiving payment. The clause also provides for periodic reviews to be prescribed to ensure that the solutions remain appropriate.
Not only will this measure support our commitment to enhancing the pension system robustness and ensuring that members normally benefit from a later-life income with the necessary communications of governance alongside it, but it will potentially provide the trustees with a level of assurance in relation to the investment strategy, enabling decisions about investment in longer-term assets, which will support the opportunity for investment in productive assets, including in the UK. The Opposition spokesperson, the hon. Member for Wyre Forest, raised that point in another context, but in this part of the DC landscape in particular, this provision means that schemes will not need to move all assets into safer assets as people approach retirement, if they are clear about the product that people will be in during their retirement.
Government amendments 147 to 155 are minor. They provide clarity on what is a default pension benefit solution, who is an eligible member and what is a relevant scheme, and they provide for the negative parliamentary procedure for subsequent regulations relating to when, and in what circumstances, default pension benefit solutions need to be reviewed.
Kirsty Blackman
If you will give me a bit of leeway, Mr Turner, I promise to speak only once on default pension benefit solutions. I might stray slightly outwith clause 42.
I am looking for clarity from the Minister on default pension benefit solutions. We have heard a lot of concern about how communications cannot be made to members, how there are possible issues with advertising and how members are communicated with. Can the Minister confirm that he is taking that concern seriously and has ensured that, under the General Data Protection Regulation and other data protection legislation, schemes can communicate legally with members in order to provide pension benefit solutions without being traced by the Information Commissioner’s Office or marketing regulators? Providers have raised that concern regularly.
I made it clear on Second Reading and in the oral evidence sessions that I think this proposal is a good thing. It is a massive concern that so many people are taking a lump sum without any plan for what that might look like or how the rest of the money will enable them to continue to live their life as they would like. I am really pleased that we are moving towards a better situation. However, we have not asked providers to do this before; it is something new. Providers will have to upskill themselves to make this change, both in their conversations with scheme members and in assessing whether the solutions that they provide are the correct ones.
Pension providers and insurers are used to putting people in boxes and saying, “This is a box of people for whom this solution might work.” However, some providers may not be used to clumping people together like that and providing solutions that will work for as many of them as possible. I do not think that there is a different way to do it. However, I would appreciate reassurance from the Minister that this will be kept under review; that there will be a significant amount of conversation with providers, as well as with scheme members who are receiving advice or a direction to a default scheme; and that regulators will keep an eye on whether the suggested default pension benefit solutions are appropriate for as many people as possible.
Of particular interest to me is the review timescale. What will happen to ensure that the proposal is working as intended? As I say, I think it is the right thing to do, but I want to make sure it works. I want people to have the best possible outcomes in retirement. If the position is marginally better than it is today, that will be good but not great. It would be lovely if it were way better, and if people were being suggested or guided to the solutions most appropriate for them. We do not just want to move from people dumping everything in a bank account to some people not doing so. It would be great to know that the solutions provided were working for a majority of people.
I would welcome any comfort that the Minister can give me on the review period and on what reassurance Parliament will have that people are being offered the solutions. As I say, provided that I get decent answers from him, I will be quite happy not to talk again for this entire portion of the Bill. I am sure that people will be delighted to hear that.
Torsten Bell
I thank the hon. Lady for rightly raising the important question of communication to members. I draw the Committee’s attention to clause 44, which explicitly aims, in quite some detail, to engage with that question. It contains requirements on providers—again, with the detail to come in regulations—about how they set out their general policy, but also how they communicate to particular individuals as they head towards retirement and, potentially, enrolment in a default solution.
It is absolutely right to say that this measure is new for providers, for regulators and for the industry in the UK, and we should always have that in mind. We should take some comfort from the success of automatic enrolment in doing something new. Other countries had moved to auto-enrolment solutions ahead of us, and the same is true here to a degree. In Australia, there is a similar pattern: it has got further ahead in terms of the average size of pots, has seen some of the negative outcomes that we can potentially see in the data in the UK, and has then moved to a version of this and is working that through. We will be able to learn from its experience, as well as just working this through ourselves.
The hon. Lady asked how the measure will be taken forward. We aim to launch a public consultation in the spring and summer next year. These requirements would come in earlier than some of the wider changes that the Committee has discussed—on small pots, for example, which will come far later, and on value for money. We think it is urgent that we get on with this, because we are approaching a situation in which DC pots will be significant for some members, but I completely appreciate her point that it is a large change for the industry.
Clause 44 requires some direct communications with members. I reassure the hon. Lady that there is nothing in the GDPR or other data protection requirements that would prevent providers from communicating in that way. They will not require consent from members to do it, which is important, because otherwise it would not be effective. There are wider questions about direct marketing—communications that are not about setting out the actual situation—in this space, and I am considering those. They are tied up with questions about targeted support and the rest, but it is important for us to continue thinking about this in the pensions space, where there is a history of downsides to direct marketing. We want to make sure that this is not that, but provision of information about the working of a scheme of which someone is a member.
Kirsty Blackman
Once this measure beds in—once we have people being moved to default benefit solutions, or those boxes and the solutions have been created—how will it be kept under review? Will there be a process for review five years down the line, when a significant number of people have been moved to default benefit solutions, to ensure that it is working as intended and that any potential problems that Australia perhaps did not come across can be ironed out?
Torsten Bell
I thank the hon. Lady for that question. There is not a formal requirement on the Secretary of State to carry out a review as we are going. My honest view is that any regulator and Secretary of State will want to actively monitor what happens. I very strongly expect that this will be discussed at great length at every single pension conference around those years, because all the providers will be talking to each other about how they are taking these things forward.
The hon. Lady will remember the discussion last Tuesday with some providers, including the National Employment Savings Trust and People’s Pension, about how they are already planning to bring these solutions forward. Although they are new for the industry, most providers had already been thinking about this, because they know that it would be the right thing to do even if there were not a Government requirement to do it, and because I have been clear with them for quite some time that this is the direction of travel in both the trust market and the GPP market.
I am not sure that we need a rigid, set date for a review, but I will take away the hon. Lady’s wider question about what reassurance we can offer that people will be actively monitoring what has happened rather than just watching and seeing what happens. I can certainly write to the regulators, for example, to make it clear that that will be our expectation.
Amendment 147 agreed to.
Amendments made: 148, in clause 42, page 55, line 11, at beginning insert
“at least in such circumstances or”.
This amendment allows for regulations to provide that particular events (as well as times or intervals) trigger a requirement to review default pension benefit solutions.
Amendment 149, in clause 42, page 55, line 13, leave out “relevant” and insert “pension”.
This amendment ensures that the definition of “pension benefit solution” is capable of operating in relation to a pension scheme that is not a relevant scheme (such as a collective money purchase scheme).
Amendment 150, in clause 42, page 55, line 25, leave out
“as a default pension benefit solution,”
and insert
“of the scheme as the pension benefit solution under which—
(i) the eligible members of the scheme generally, or
(ii) a subset of those eligible members,
will receive pension payments unless they choose to receive pension payments under a different pension benefit solution,”.
This amendment clarifies the definition of “default pension benefit solution”.
Amendment 151, in clause 42, page 55, line 40, at end insert
“;
(d) such other factors as may be prescribed.”—(Torsten Bell.)
This amendment allows other factors to be added by regulations to the factors that trustees or managers of a relevant scheme have to take account of in determining what default pension benefit solutions the scheme should make available.
Steve Darling
I beg to move amendment 279, in clause 42, page 55, line 40, at end insert—
“(4A) The trustees or managers of a relevant scheme, in determining whether to adopt or vary a default pension benefit solution, must—
(a) issue a written notice of the proposal to all members of the scheme, including—
(i) the expected impact on benefits and investment strategy, and
(ii) a written attestation that a market-wide assessment of all available options was undertaken;
(b) ensure a consultation period of at least 60 days has elapsed;
(c) confirm that fewer than 10 per cent of eligible members have objected in writing.”
This amendment adds the “without member opposition” safeguard to defined contribution schemes when changes to default pension benefit solutions are considered. It also requires a whole of market assessment to ensure the best solutions are chosen for members.
It is a privilege to move the amendment, because as Liberal Democrats we want to make sure that pensioners are at the heart of the Bill, as do many colleagues of different parties in this room, I am sure. For us, it is about driving a positive culture of engagement. The expectations that these proposals would place on managers or trustees would drive a positive engagement culture, as well as putting guardrails and protections around investments. I would welcome the Minister’s reflections on how the Bill would tackle our aspiration for the positive engagement culture that I am sure all Members in the room wish to see achieved through the Bill.
Torsten Bell
The amendment is absolutely right that trustees should consider a wide range of options when they are developing their default pension benefit solutions. As I have just remarked to the hon. Member for Aberdeen North, I suspect that that will be a big focus for trustees and scheme managers in the years ahead. Clause 48 does make provision for trustees or managers to consider the needs and interests of scheme members. I would emphasise that as the priority, as opposed to considering every option already on the market, because we are looking for them to develop the right solutions. In most but not all cases, that will be in-house; we will come back to some of the cases where they will not be doing that. We do not want to make it sound like an off-the-shelf situation in lots of cases, although I appreciate that doing their job will require them to look across the market.
I have a slight worry about setting a hard 10% of membership expressing an objection as a way of vetoing an approach. First, in many cases, there will not be a single default solution for members within a scheme; there will be a number of them for different cohorts within that scheme, not least based on the size of pots or their wider situation. We do not want a subset of a scheme to be able to vote down the solutions for everybody within the scheme, which is what the amendment would allow. The amendment would also allow those who are a very long way from retirement to shape the outcomes for those who are about to come to retirement.
My most important point, however, is that individuals have an absolute right to opt out. Although we talk in terms of default, just as we talk about automatic enrolment, the purpose is that this is a softer default than automatic enrolment. That is partly because we are expecting multiple defaults, not a single one where everyone is required to save at least a certain amount, but also because people will be able to opt out and have a range of different defaults.
I hope that I have provided reassurance that the Bill already includes important safeguards, and that trustees and scheme managers will already need to consider the issues that the Liberal Democrat amendment rightly puts on the table.
Steve Darling
I thank the Minister for his positive feedback. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 152, in clause 42, page 56, line 1, leave out
“are to assess the needs and interests of its”
and insert
“of a scheme are to assess the needs and interests of the scheme’s”.
This amendment corrects a minor verbal inconsistency.
Amendment 153, in clause 42, page 56, line 14, leave out “money purchase benefits” and insert
“benefits falling within paragraph (a) of the definition of ‘money purchase benefits’ in section 181(1) of the Pension Schemes Act 1993”.
This amendment restricts the definition of “eligible member” of a relevant scheme so that it does not include members who are accruing or entitled to collective money purchase benefits.
Amendment 154, in clause 42, page 56, line 16, leave out “established under a trust”.
This amendment amends the definition of “relevant scheme” so schemes that are not established under a trust may fall within the definition.
Amendment 155, in clause 42, page 56, line 25, at beginning insert “(1)(b) or”.—(Torsten Bell.)
This amendment provides for negative parliamentary procedure for regulations that prescribe when or in what circumstances default pension benefit solutions need to be reviewed.
Clause 42, as amended, ordered to stand part of the Bill.
Clause 43
Transferable members
Torsten Bell
I beg to move amendment 156, in clause 43, page 56, line 29, leave out—
“a member of the scheme”
and insert—
“eligible members of the scheme (whether comprising the members of the scheme generally or a subset of those members)”.
This amendment clarifies how the exclusion in clause 43(1) operates.
The Chair
With this it will be convenient to discuss Government amendments 157 to 160 and 165.
Torsten Bell
We have now reached clause 43—the clause that deals with the situation I mentioned briefly earlier, which is where a scheme thinks that it is in the best interests of its members that the default solution is provided by another scheme or provider, and it sets out how that should take place. Amendments 156 to 160 and 163 and 165 all relate to the operation of providing pension benefit solutions via transfers to another scheme. The intention of the amendments is merely to provide helpful clarifications or to otherwise ensure that the clauses operate in line with the policy intent.
Amendment 156 clarifies that trustees or managers may choose to offer to transfer all the scheme’s members to another scheme for the purpose of providing a pension benefit solution, or just a subset of those members—as I said before, there may be a different cohort within each scheme with the right default for them. Amendment 158 clarifies that it will be for trustees or managers of a relevant scheme to determine whether it is reasonably practical for the scheme to provide a default pension benefit solution. Amendment 160 clarifies that trustees or managers of a relevant scheme may offer to transfer members to another scheme if they have determined that the other scheme would provide a better outcome for those members than they would provide within their own scheme—again, the interests of members should come first.
Amendments 157 and 159 are consequential amendments. Amendment 163 clarifies that trustees or managers of a relevant scheme must arrange for transfers to take place and not just facilitate them. That ensures that members should be supported through the whole process—we do not want schemes thinking their job is done as soon as they have set out that process, and leaving members to wrestle with it. These are minor but important technical amendments. They do not alter policy. I ask the Committee to support them.
Amendment 156 agreed to.
Amendments made: 157, in clause 43, page 56, line 30, leave out from “such” to end of line 31 and insert—
“members are referred to in this Chapter as ‘transferable members’.”
This amendment is consequential on Amendment 156.
Amendment 158, in clause 43, page 56, line 32, leave out from “that” to “to design” in line 33 and insert—
“the trustees or managers of the principal scheme have determined that it is not reasonably practicable for them”.
This amendment makes the first condition in clause 43(2) subject to the determination of the trustees or managers.
Amendment 159, in clause 43, page 56, line 33, leave out “that member” and insert “the members concerned”.
This amendment is consequential on Amendment 156.
Amendment 160, in clause 43, page 56, line 36, leave out from “have” to end of line 38 and insert—
“determined that a qualifying pension benefit solution of a qualifying scheme (other than the principal scheme) will provide a better outcome for the members concerned than any default pension benefit solution that the trustees or managers of the principal scheme could design and make available to them.”—(Torsten Bell.)
This amendment clarifies the application of the second condition in clause 43(3).
Torsten Bell
I beg to move amendment 161, in clause 43, page 57, line 1, leave out “and willing” and insert “to and agrees”.
This amendment is consequential on Amendment 174.
The Chair
With this it will be convenient to discuss Government amendments 162 to 164, 175, 174 and 176.
Torsten Bell
In cases where trustees or managers of a relevant scheme have determined that it is not reasonably practical to provide a solution themselves, or that better member outcomes could be achieved if another scheme delivered a solution, they can arrange for the transfers to be made. That is what clause 43 permits. Whether a member is receiving a default solution in-house or being transferred to another scheme to receive that solution, the policy intent is that the member experience should be broadly similar—there should not be a difference in their experience of it. Amendment 164 seeks to ensure that there is parity in the requirement placed on schemes. In particular, the amendment requires schemes to ensure that a scheme receiving transferable members is able to provide a pension benefit solution that meets the needs and interests of the scheme’s membership.
Amendment 174 aims to ensure that no scheme will be left in a position where it is unable to comply with the wider guided retirement provisions due to factors outside their control. There is a requirement on schemes to provide guided retirement under the Bill, but if there are factors outside their control that make that difficult, we want to have a backstop that is provided by introducing a power to designate schemes of last resort, which could be used to facilitate transfers from any relevant pension scheme for the purpose of providing a qualifying pension benefit solution. Hon. Members will think of the similar approach that NEST provided in auto-enrolment world—although we are not intending to need it in this case—where employers would always have a scheme they could go to, given that there was a requirement on them to enrol employees.
Amendments 161, 162 and 174 merely provide helpful clarifications or otherwise ensure that clause 43 operates in line with the policy intent. Amendment 176 applies the negative parliamentary procedure to regulations relating to highly technical aspects of the policy. These amendments, taken together, provide for small targeted changes to clause 43, and I encourage hon. Members to support them.
Amendment 161 agreed to.
Amendments made: 162, in clause 43, page 57, line 7, at beginning insert
“at such times or in such circumstances as may be prescribed,”.
This amendment allows for regulations to specify when transfer arrangements need to be entered into.
Amendment 163, in clause 43, page 57, line 8, leave out “facilitating relevant transfers” and insert
“effecting a relevant transfer to that scheme”.
This amendment clarifies that schemes will be required to arrange with receiving schemes to carry out relevant transfers (not just to facilitate them).
Amendment 165, in clause 43, page 57, line 9, leave out
“steps required by the regulations”
and insert “prescribed steps”.
This amendment corrects a verbal inconsistency.
Amendment 164, in clause 43, page 57, line 9, at end insert—
“(5A) In carrying out the step in subsection (5)(a), the trustees or managers of the principal scheme must have regard to the matters mentioned in section 42(4) (and for that purpose references in those paragraphs to “the scheme” are to the principal scheme).
(5B) Section 42(5) applies for the purposes of subsection (5A) as it applies for the purposes of section 42(4).
(5C) The trustees or managers of the principal scheme must, at least in such circumstances or at such times or intervals as may be prescribed, review the suitability of any qualifying pension benefit solution in respect of which they have identified a qualifying scheme as mentioned in subsection (5)(a).”—(Torsten Bell.)
This amendment ensures that schemes are subject to similar duties in respect of their “transferable members” to the duties to which they are subject in respect of other eligible members.
Torsten Bell
I beg to move amendment 167, in clause 43, page 57, line 10, leave out “In subsection (5)(a)(ii)” and insert “In this Chapter,”.
This amendment reflects the fact that “qualifying pension benefit solution” is, as a result of other amendments, now used more widely in the Chapter.
The Chair
With this it will be convenient to discuss the following:
Government amendments 166 and 168 to 173.
Clause stand part.
Torsten Bell
We now move to the substance of clause 43 and the proposed amendments. Clause 43 allows schemes to partner with another for the purpose of delivering a suitable pension solution to their membership—or cohorts of their membership. It allows those transfers to qualifying pension benefit solutions when either providing an in-house solution is not reasonably practicable, or a solution offered by another scheme is deemed to provide a better outcome for members. It requires trustees or managers of the principal scheme to identify qualifying schemes that provide solutions that meet the requirements of their membership. That could, for example, include transferring members to a collective defined-contribution scheme. Power is also taken to limit or prohibit the charging of transfer fees. This clause is vital overall, as it provides the flexibility that I have discussed in the course of debate on the previous group of amendments and allows trustees to deliver the best outcomes for their members.
Amendment 154 removes a drafting error and clarifies that all occupational pension schemes that provide defined-contribution benefits are included in the definition of relevant scheme, not just those established under a trust. Whether a pension scheme member is receiving a default solution in-house or being transferred to another scheme to receive a qualifying solution, as I said earlier, the policy intent is that they have a similar experience.
Amendments 166 to 169 and 173 ensure that there is a parity of requirements on schemes in those cases. Amendments 170 and 171 are consequential amendments, while amendment 172 corrects a minor inconsistency in language. I commend them and the clause to the Committee.
Amendment 167 agreed to.
Amendments made: 166, in clause 43, page 57, line 10, after “solution”” insert
“, in relation to a qualifying scheme,”.
This amendment is consequential on Amendment 167.
Amendment 168, in clause 43, page 57, line 12, leave out “receiving”.
This amendment is consequential on Amendment 167.
Amendment 169, in clause 43, page 57, line 15, leave out
“eligible members of the receiving”
and insert “members of the”.
This amendment is consequential on Amendment 167, and also reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases.
Amendment 170, in clause 43, page 57, line 16, leave out “eligible”.
This amendment reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases.
Amendment 171, in clause 43, page 57, line 17, leave out “eligible”.
This amendment reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases.
Amendment 172, in clause 43, page 57, line 21, leave out “But”.
This amendment makes a minor verbal change in light of other amendments to clause 43.
Amendment 173, in clause 43, page 57, line 23, leave out “subsection (5)” and insert “this section”.
This amendment reflects the fact that, as a result of other amendments, “qualifying scheme” is used more widely in the section.
Amendment 175, in clause 43, page 57, line 35, at end insert—
“(9A) Regulations may make provision about the conditions in subsections (2) and (3), including about the basis on which the determinations mentioned in those subsections are to be made.”
This amendment allows for regulations to make provision elaborating on the conditions in subsections (2) and (3).
Amendment 174, in clause 43, page 57, line 35, at end insert—
“(9B) Regulations may require a pension scheme of a prescribed description to agree to receive a transfer in respect of the accrued rights of a transferable member where—
(a) the principal scheme has been unable, having used reasonable endeavours, to identify a qualifying scheme that is able and willing to do so, and
(b) any other prescribed conditions are met.
(9C) A requirement under subsection (9B) may only be imposed on a pension scheme that is one or both of the following—
(a) a Master Trust scheme within the meaning of the Pension Schemes Act 2017;
(b) a consolidator scheme within the meaning of Chapter 2 of Part 2 (consolidation of small dormant pension pots).”
This amendment allows for regulations to require certain schemes to act as schemes of last resort in cases where the principal scheme cannot find a qualifying scheme that is willing to receive a transfer.
Amendment 176, in clause 43, page 57, line 40, at beginning insert
“Regulations under subsection (5C), (10) or (11) are subject to the negative procedure; and other”.—(Torsten Bell.)
This amendment applies negative parliamentary procedure to regulations under subsection (5C), (10) or (11).
Clause 43, as amended, ordered to stand part of the Bill.
Clause 44
Provision and gathering of information
Torsten Bell
I beg to move amendment 177, in clause 44, page 58, leave out line 2 and insert
“Where only one pension benefit solution is available to the members of a relevant scheme,”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
The Chair
With this it will be convenient to discuss the following:
Government amendments 178 to 195.
Clause stand part.
Torsten Bell
Clause 44 relates to the provision of information to members about the solution or solutions that they offer them. We discussed the clause earlier with the hon. Member for Aberdeen North. The clause requires schemes to communicate and describe the default pension benefit solutions available and the circumstances for those for whom it would be suitable. Powers are taken to make further provisions in secondary legislation. The key policy behind the clause is to ensure that scheme members are well informed about their pension options. The Bill requires all communications issued by schemes to be in clear and plain language, which will help members to make better decisions regarding their retirement income.
The clause allows trustees or managers to request relevant information from their members to determine what an appropriate default solution would be for their membership. Pension schemes will also have the ability, and potentially be required, to gather information from their members to ensure that where a scheme has multiple default pension benefit solutions, the member receives communications about the one deemed most appropriate for them. For example, what wider pension provision people have is important when they think about what is the right solution for them.
Amendment 177, 179 to 181, 183, 186, 187, 190 and 192 to 195 ensure that clause 44 operates in relation to qualifying pension benefit solutions, as well as default pension benefit solutions. That change will mean that the same communication requirements will apply irrespective of whether a scheme member is being transferred to another pension scheme to receive a pension benefit solution or staying with the same scheme. Amendments 178, 182, 184, 185, 188, 189 and 191 provide minor language changes to improve consistency across the Bill.
Clause 44 is essential for promoting informed decision making among scheme members.
Amendment 177 agreed to.
Amendments made: 178, in clause 44, page 58, line 3, leave out “the member” and insert
“each eligible member of the scheme”.
This amendment corrects a minor verbal error.
Amendment 179, in clause 44, page 58, line 5, leave out “member’s default”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 180, in clause 44, page 58, line 8, leave out “default”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 181, in clause 44, page 58, line 9, leave out from beginning to “the trustees” in line 10 and insert
“Where more than one pension benefit solution is available to the eligible members of a relevant scheme,”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 182, in clause 44, page 58, line 10, leave out “the member” and insert
“, each eligible member of the scheme”.
This amendment corrects a minor verbal error.
Amendment 183, in clause 44, page 58, line 12, after “solution” insert
“or qualifying pension benefit solution”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 184, in clause 44, page 58, line 14, leave out “option” and insert “solution”.
This amendment makes a clarificatory change to the tag used in clause 44(2).
Amendment 185, in clause 44, page 58, line 17, leave out
“the default pension benefit solution”
and insert “the specified solution”.
This amendment is consequential on Amendment 184.
Amendment 186, in clause 44, page 58, line 18, leave out “member’s default”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 187, in clause 44, page 58, line 27, leave out from “of” to “is” in line 29 and insert
“a default pension benefit solution or qualifying pension benefit solution and an explanation that such a solution”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 188, in clause 44, page 58, line 29, leave out “an” and insert “a regular”.
This amendment makes the language of clause 44(4)(b) consistent with clause 42(3)(b).
Amendment 189, in clause 44, page 58, line 31, leave out “eligible members” and insert “each eligible member”.
This amendment makes a minor clarificatory change.
Amendment 190, in clause 44, page 58, line 32, leave out
“the default pension benefit solutions offered by the scheme”
and insert
“the pension benefit solutions available to the eligible members”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 191, in clause 44, page 58, line 34, leave out paragraph (b).
This amendment is consequential on Amendment 190.
Amendment 192, in clause 44, page 58, line 38, leave out from “describing” to end of line 40 and insert
“a particular pension benefit solution that the trustees or managers consider to be suitable for the eligible member in question;”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 193, in clause 44, page 59, line 2, leave out “default”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 194, in clause 44, page 59, line 10, leave out “default” and insert
“, or in the case of transferable members identifying,”.
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 195, in clause 44, page 59, line 11, leave out “default”.—(Torsten Bell.)
This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.
Clause 44, as amended, ordered to stand part of the Bill.
Clause 45
Information etc in connection with selection of benefit solution
Torsten Bell
I beg to move amendment 196, in clause 45, page 59, line 27, leave out “offer” and insert “provide or make available”.
This amendment allows for regulations either to require information to be provided directly to members or to require it to be made available to them.
The Chair
With this it will be convenient to discuss the following:
Government amendments 197 to 202.
Clause stand part.
Torsten Bell
The purpose of the clause is to help improve pension engagement so that individuals can make better decisions themselves if they want to do so. As I said earlier, this is about softer defaults than we have in the case of automatic enrolment. The clause grants a power to make regulations requiring schemes to offer and provide information to assist members in the selection of their pension benefit solutions. The clause also includes a regulation-making power that could require schemes to monitor rates of decumulation —that is the drawdown of the pension pot used by members—and issue warnings if they believe that that should be changed. That could be used to help prevent individuals from inadvertently running out of money in later life, or it could even be used to recommend increasing withdrawals. Again, we have talked a lot about Australia. I do not know whether we are feeling patriotic at the moment, but one of the lessons from Australia is that in many cases one of the dangers is insufficient drawdown, and people under-consuming in later life. In either case, this approach could potentially help to prevent people from living in poverty during retirement, either because they are not spending enough or because they are drawing down too much early on.
The Government’s broader objective is that individuals need not make any decisions about how their savings are invested or how they should take their pension benefits, except to confirm that they want to start receiving payment. That is a big change from the status quo, which is very complicated at the point someone approaches retirement. However, I want to emphasise that individuals will retain their pension freedoms and are able to opt out of any default, should they wish to do so.
This provision allows for members to receive information to enable engaged and engageable members to make informed decisions. The clause includes a power to require that the information provided is based on members’ individual circumstances, where those are known to the scheme. The intention is that relevant general information will be provided to individuals. The policy behind this clause is to help bridge knowledge gaps and enhance members’ understanding of their options.
I turn to the associated amendments. Amendments 196 and 201 provide clarity that information may be sent directly to scheme members or made available to them, for example via websites. Amendments 198 and 199 clarify that schemes may be required to provide information to their members on any of the options available to them under pension freedoms, not just those available under the default scheme. Amendment 202 clarifies that schemes may tailor the information provided to scheme members using information already held by the scheme. Amendment 197 requires that information provided to scheme members under clause 45 must be
“in clear and plain language”.
Finally, amendment 200 removes some unnecessary wording.
The amendments are all technical in nature. They are not intended to change, but to enhance the deliverability of the policy.
Amendment 196 agreed to.
Amendments made: 197, in clause 45, page 59, line 28, after “information” insert
“expressed in clear and plain language”.
This amendment requires that information required by regulations under clause 45 be in clear and plain language, mirroring the requirement in clause 44(6).
Amendment 198, in clause 45, page 59, line 30, leave out “default”.
This amendment, together with Amendment 199, ensures that clause 45 operates in respect of pension benefit solutions other than default pension benefit solutions.
Amendment 199, in clause 45, page 59, line 31, leave out “default”.
See the explanatory statement for Amendment 198.
Amendment 200, in clause 45, page 59, line 32, leave out
“(for example as regards the rate of income withdrawal)”.
This amendment removes the suggestion that members would decide the rate of income withdrawal, since that would be determined by the scheme.
Amendment 201, in clause 45, page 59, line 33, leave out “given” and insert
“provided or made available to a member”.
This amendment is consequential on Amendment 196.
Amendment 202, in clause 45, page 59, line 35, leave out
“obtained under powers conferred by section 44”.—(Torsten Bell.)
This amendment removes the reference to clause 44 from clause 45(2), so that information given by virtue of clause 45(1) may be based on information that the trustees or managers hold otherwise than by virtue of clause 44.
Clause 45, as amended, ordered to stand part of the Bill.
Clause 46
Pension benefits strategy
Torsten Bell
I beg to move amendment 203, in clause 46, page 60, line 8, leave out “default”.
This amendment ensures that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions.
The Chair
With this it will be convenient to discuss the following:
Government amendments 204 to 208.
Clause stand part.
Torsten Bell
This clause is the one most relevant to the Liberal Democrat amendment 279 that we discussed earlier, because it requires trustees or managers of relevant pension schemes to formulate, review and, where appropriate, revise their pension benefits strategy. This is where they will need to show that they have considered the range of options set out in that Lib Dem amendment.
The production and review of such a strategy will hold occupational pension schemes to account for how they have identified the requirements of their membership and how they have used that information to design the default pension benefit solution, or solutions, that they have put in place, or to identify an appropriate qualifying pension benefit solution elsewhere.
Additionally, schemes will need to set out in their strategy their plans for how they will communicate effectively with their members—another issue that has been at the centre of our discussions today. There is also a requirement for the scheme to review their strategy, and Government have taken a power to specify minimum intervals for review. Regulations may also set out further requirements for evidence of how the scheme has complied with any of the requirements set out in this chapter. The strategy must be published and made available to both the regulator and members of the scheme, which will enable effective monitoring, analysis and evaluation at an aggregate level.
Government amendments 203 and 204 will ensure that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions. Amendment 205 adds effective communication to the list of things that must be addressed in the strategy. Amendments 206 and 207 correct an error in the Bill as drafted. Amendment 208 allows regulations to require that the information about compliance with provisions of the chapter be published alongside a benefit strategy. Amendment 210 removes a provision made redundant by other amendments.
Amendment 203 agreed to.
Amendments made: 204, in clause 46, page 60, line 9, leave out from beginning to “pension” in line 10 and insert
“design, or in the case of transferable members identify,”.
This amendment ensures that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions.
Amendment 205, in clause 46, page 60, line 12, leave out paragraph (c) and insert—
“(c) communicate effectively with eligible members of the scheme with regard to pension benefit solutions and comply with any regulations under section 45.”
This amendment adds effective communication to the list of things that a pension benefits strategy must address.
Amendment 206, in clause 46, page 60, line 25, leave out “and” and insert “or”.
This amendment corrects an error.
Amendment 207, in clause 46, page 60, line 26, leave out “be authorised to”.
This amendment corrects an error.
Amendment 208, in clause 46, page 60, line 35, at end insert—
“(3A) Regulations may require the trustees or managers of a relevant scheme to publish, alongside a pension benefits strategy (or revised pension benefits strategy), prescribed information or evidence as to whether and how they have complied with the requirements imposed by virtue of this Chapter.”—(Torsten Bell.)
This amendment allows regulations to require that information about compliance be published alongside a pension benefits strategy.
Torsten Bell
I beg to move amendment 209, in clause 46, page 60, line 36, leave out subsection (4).
This amendment leaves out a penalty provision that government amendments to Clause 47 would make redundant.
The Chair
With this it will be convenient to discuss the following:
Government amendment 211.
Clause stand part.
Clauses 47 and 48 stand part.
Government amendments 212 and 213.
Clause 49 stand part.
Torsten Bell
Clause 47 allows for a compliance framework to be developed to ensure that trustees or managers of pension schemes comply with the requirements of chapter 5 of the Bill and take their responsibilities seriously; hon. Members will by now be used to seeing parts of this at the back of sections of pension legislation.
It is worth noting up front that amendment 211 replaces the penalty provisions in clause 47 with a new mechanism for introducing enforcement powers via regulations. The regulations could allow for the Pensions Regulator to issue compliance notices, third-party compliance notices and penalty notices. These types of enforcement notice are not unusual, and they appear in other pensions legislation, such as the pensions dashboard regulations and the regulations on climate change governance and reporting.
Penalties will be limited to no more than £10,000 in the case of individuals and up to £100,000 in other cases, such as corporate trustees. We have introduced these changes to ensure consistency with other clauses in the Bill, including the provisions related to value for money and small pots consolidation; we discussed the size of those penalties recently.
Clause 47 will enable the regulator to remove and replace trustees in the event of non-compliance. Amendment 209 will remove a penalty provision in clause 46 that is made redundant by amendment 211. Clause 48 makes it clear that the measures in this chapter apply to pension schemes run on behalf of the Crown, another standard provision. Clause 49 provides the definitions for terms used in chapter 5 of the Bill, including many of the important ones I have run through today. Amendments 212 and 213 add the definitions of “pension benefit solution” and “qualifying pension benefit solution” to the list of defined terms in clause 49. They do not change the definition of these terms elsewhere in the clauses.
Amendment 209 agreed to.
Clause 46, as amended, ordered to stand part of the Bill.
Clause 47
Enforcement and compliance
Amendment made: 211, in clause 47, page 61, line 4, leave out subsections (1) to (5) and insert—
“(1) Regulations may make provision with a view to ensuring the compliance of any person with any provision of or under this Chapter.
(2) The regulations may in particular—
(a) provide for the Pensions Regulator to issue a notice (a ‘compliance notice’) to a person with a view to ensuring the person's compliance with a provision of or under this Chapter;
(b) provide for the Pensions Regulator to issue a notice (a ‘third party compliance notice’) to a person with a view to ensuring another person's compliance with a provision of or under this Chapter;
(c) provide for the Pensions Regulator to issue a notice (a ‘penalty notice’) imposing a penalty on a person where the person—
(i) has failed to comply with a compliance notice or third party compliance notice, or
(ii) has contravened a provision of or under this Chapter;
(d) provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty;
(e) confer other functions on the Regulator.
(3) The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention.
(4) But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed—
(a) £10,000, in the case of an individual, and
(b) £100,000, in any other case.
(5) Any penalty payable under the regulations is recoverable by the Regulator.
(5A) In England and Wales, any such penalty is, if the county court so orders, recoverable under section 85 of the County Courts Act 1984 or otherwise as if it were payable under an order of that court.
(5B) In Scotland, a penalty notice is enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom.
(5C) The Regulator must pay into the Consolidated Fund any penalty recovered under this section.”—(Torsten Bell.)
This amendment replaces the provisions in subsections (1) to (5) of clause 47 about fixed penalty notices with a power to make regulations providing for compliance notices, third party compliance notices and penalty notices.
Clause 47, as amended, ordered to stand part of the Bill.
Clause 48 ordered to stand part of the Bill.
Clause 49
Interpretation and general
Amendments made: 212, in clause 49, page 62, line 13, at end insert—
“‘pension benefit solution’ has the meaning given by section 42(2);”.
This amendment adds “pension benefit solution” to the list of defined terms in clause 49.
Amendment 213, in clause 49, page 62, line 19, at end insert—
“‘qualifying pension benefit solution’ has the meaning given by section 43(6);”.—(Torsten Bell.)
This amendment adds “qualifying pension benefit solution” to the list of defined terms in clause 49.
Clause 49, as amended, ordered to stand part of the Bill.
Clause 50
Corresponding provision in relation to FCA-regulated schemes
Torsten Bell
I beg to move amendment 214, in clause 50, page 62, line 33, leave out from beginning to end of line 8 on page 63 and insert—
“137FBD FCA general rules: guided retirement
(1) The FCA must make general rules for the purpose of ensuring that default or qualifying pension benefit solutions are made available to members of relevant pension schemes.
(2) In determining what provision to include in the rules, the FCA—
(a) must have regard to provision made by, and any provision made under, Chapter 5 of Part 2 of the Pension Schemes Act 2025 (guided retirement: schemes regulated by the Pensions Regulator), and
(b) must aim to ensure, so far as possible, that the outcomes achieved by the rules in relation to relevant pension schemes correspond to those achieved by that Chapter, and any regulations made under it, in relation to pension schemes to which that Chapter applies.
(3) In this section—
‘default or qualifying pension benefit solution’ means a pension benefit solution which—
(a) is designed for delivering money purchase benefits under a pension scheme to some or all of the members of the scheme,
(b) is designed to provide a regular income for the members concerned in their retirement (whether or not together with other benefits), and
(c) meets any other prescribed conditions;
‘FCA-regulated pension scheme’ means a pension scheme whose operation—
(a) is a regulated activity, and
(b) is carried on in the United Kingdom by an authorised person;
‘money purchase benefits’ has the same meaning as in the Pension Schemes Act 1993 (see section 181 of that Act);
‘pension benefit solution’, in relation to a pension scheme, means a contractual or other arrangement for making pension payments in respect of members’ accrued rights;
‘pension scheme’ has the meaning given in section 1(5) of the Pension Schemes Act 1993;
‘relevant pension scheme’ means an FCA-regulated pension scheme that is—
(a) an auto-enrolment scheme,
(b) a workplace personal pension scheme that is not an auto-enrolment scheme, or
(c) a pension scheme of a prescribed description,
and for that purpose ‘auto-enrolment scheme’ has the meaning given in section 117A(3) and ‘workplace personal pension scheme’ has the meaning given in section 117A(5).”
This amendment adjusts the requirement for the FCA to make rules corresponding to Chapter 5 of Part 2. It ensures that the FCA has the flexibility to make provision that is different from that contained in Chapter 5 of Part 2 provided that the FCA’s rules aim to achieve corresponding outcomes to that Chapter.
Torsten Bell
We now turn to clause 50, the last clause in this part of the Bill. The overriding objective of this clause, together with amendment 214, is to make corresponding provision in relation to FCA-regulated schemes. Clause 50 inserts into the Financial Services and Markets Act 2000 new section 137FBD, which will deliver default pension benefit solutions to FCA-regulated pension schemes, ensuring that members on both sides of the market benefit from default solutions.
Amendment 214 is a technical amendment that refines the requirement on the FCA to deliver those solutions for members of FCA-regulated pension schemes and ensures consistency between FCA and TPR-regulated schemes—a key objective of the Government. It clarifies that the FCA must make rules to ensure that default pension scheme solutions are made available to members of FCA-regulated schemes and, in making those rules, must have regard to provisions made by the rest of chapter 5 of part 2, which we have been discussing and which sets the framework for the TPR to provide those solutions.
The FCA must also aim to ensure, as far as possible, that the outcomes achieved by its rules correspond to those achieved under chapter 5, and any regulations made under it regarding TPR-regulated pension schemes. The amendment therefore seeks to ensure that, from a member’s perspective, default pension benefit solutions are provided consistently across the market, whether they are a member of a TPR or an FCA-regulated pension scheme, while giving the FCA the flexibility to deliver that outcome in a way that suits its methods of regulating pension schemes. DWP, the FCA and The Pensions Regulator will work together to develop and deliver default pension benefit solutions, further boosting fairness and consistency across the market.
Amendment 214 agreed to.
Clause 50, as amended, ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Taiwo Owatemi.)
Westminster Hall
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Hydrogen Supply Chains
(1 day, 13 hours ago)
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Tom Collins (Worcester) (Lab)
I beg to move,
That this House has considered hydrogen supply chains.
It is a pleasure to serve under your chairship, Mr Betts, and a great pleasure to see my hon. Friend the Minister in his place. I congratulate him. It is good to see him back at the Dispatch Box, renewing his already well established work in our Government’s mission for growth and change. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this debate. Unfortunately, there has been a switcheroo and I am taking his place, but I am very glad to be doing that and very grateful to him for the opportunity.
This is of course a very important topic. We have faced an overly warm summer this year and we keep seeing the weather reminding us of the urgent need for change. The global energy system is also rapidly transitioning, and the UK needs to respond to that. With our ambitious mission for growth, looking to have the highest growth in the G7, it is vital that we are competitive and, indeed, that we lead in the energy space, as well as renew ourselves industrially. The UK has shown great leadership in hydrogen supply chain development and hydrogen technology development. We have been leaders, but we have also navigated and illustrated the technically complex, multi-sector, internationally charged difficulties in decarbonising our economy. It has been unclear which technologies will win, but although there is still some small uncertainty associated with how the mix of technologies will play out, the questions of how we will produce, transport and store energy at that macro scale are now finding firm answers, so we are at a turning point. The transition is no longer being led by technology, but by economics, and it is time for us to respond to that shift.
The wider picture is beginning to resolve into clear focus, especially for hydrogen. In the future energy system, the UK will be more independent. It is quite likely that it will still be a net importer of energy but with a very strong position in Europe, given our incredible assets in renewables. Hydrogen and ammonia are likely to replace oil as the vector for intercontinental energy transport, and electrification will be common, especially in well-developed societies. The competitive economic battlefield will be for these fuels.
Just as that crystalising picture informs our context, it informs the UK energy strategy. We know that we will electrify what we can—and that will require a huge expansion of our electricity system across the board, from production to transportation, storage and end use—but it is also vital that we go big on hydrogen, as this is critical for reindustrialisation, for heavy transport and for us to maximise our country’s strengths. That all points to hydrogen if we are to reindustrialise the UK, which is vital for economic growth and national resilience.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Member is making an excellent speech on a very important subject. He mentioned the production of ammonia. The fact is that fertiliser is made from ammonia and right now our farmers are facing increasing prices for a number of world reasons. Does the hon. Member agree that one of the strategic purposes of creating hydrogen is to support hard-pressed farmers all over the UK?
Tom Collins
The hon. Member is entirely right. Ammonia is a very important part of the future energy mix. It is interchangeable bidirectionally with hydrogen and it is a very compact energy carrier. It is a liquid—it is relatively easily handled and stored—but it also, vitally, provides direct injection into the agricultural fertiliser chain. That makes it a vital asset in our future energy system, as agriculture currently plays a very large role in our total carbon emissions.
How we get to the future energy system is similar to how we got to this point: economics is overtaking technology as the driver for change. It is not about choosing technologies; it is about choosing these key energy vectors and then facilitating markets to grow around them. If we look more closely at that challenge and at the current UK energy system, we have seen electricity decarbonising, but if we look at electricity use in comparison with other vectors in the UK, it plays a relatively modest role. If we look at our energy use over the course of a year, our daily electricity consumption is pretty flat, but if we overlay on to that the amount of gas we use as a country—remember, gas is providing a vital part of our electricity production, and indeed the responsive part—and we see waves with peaks in the winter and troughs in the summer. The peaks of those waves are three times higher than our day-to-day electricity use. Gas is doing the lion’s share of moving energy around the UK and supporting our electricity system, and oil, which is primarily used for transport and is our main vector for transport, sits at about the same level as electricity. That is the picture of how energy is split across the UK energy system.
What we can learn from that is that UK energy demand is peaky. It varies very rapidly, seasonally and throughout the day, especially for heat applications. As we move into a renewable world, we need to recognise that renewable production is also subject to these synchronous peaks and troughs. The UK is a small enough country that one weather system can influence the production of all our renewables. We are therefore subject to fluctuations both in the supply of renewable energy and in demand. We also know that global prices for energy will continue to fluctuate, and part of our Government’s strategy to make the UK rightly more energy independent is informed by our vulnerability to variations in international energy prices.
Whatever our vector mix, and however we cut up the pie of our future energy system, we absolutely will need storage to navigate these variations. The transition has rightly been described as a chicken-and-egg problem: how do we build a new energy system out of an existing one? We are led by economics, which means that we need a price for the new system. We need a price that breaks the cycle by providing producers with a way to sell their energy and by providing people decarbonising at the end-use point with the ability to buy the energy they need for decarbonisation and to make long-term investments. That price enabler is made stable by storage. The crux, therefore, of building this future energy system is to build transmission and storage of the key vectors that we want to use in the future. Therefore, it would be very valuable for the UK to develop a plan to commission and build out a strategic national clean energy reserve. That can be left to markets, but the Government need to drive it with an extremely strong and firm grip and with a clear vision. I urge the Minister to look at the ways that we can build on our current work in storage, while expanding it with a very clear and ambitious vision.
We can also start blending. Blending is sometimes misunderstood. There are currently investigations into blending hydrogen into our natural gas supply. That has a small benefit for decarbonisation, but it has a huge benefit for allowing us to build out production of hydrogen, because it gives producers a large and available sink for their hydrogen to be produced and sold and it allows them to build large-scale production with the certainty of a market. Blending is therefore a key enabler not of decarbonisation but of building production for a future energy system with hydrogen playing a major role.
It is also vital that we take action to fill the remaining gaps. Through my experience as an engineer working in research and development I have seen personally how powerful it is when the Government set goals and work in partnership with industry to try to meet those goals. Goal setting cuts through the noise of the usual business of research and development and the competition for investment, and it allows us to move forward. It has put the UK in an incredibly strong position.
The UK is already the leader in hydrogen standards, and with the publicly available specifications 4444 series, it is leading the way in establishing technical standards. We have an opportunity to build those out up to the norms of the British Standards Institution and the International Organisation for Standardisation. The UK has led and is leading that. The UK has led on technology with a series of first-in-the-world projects in hydrogen over recent years, and we have an opportunity to lead through our geography with a well-established oil and gas industry ready to transition with fantastic geology for salt cavern storage.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Member refers to geography. In Northern Ireland, particularly in my adjoining constituency of North Antrim, hydrogen buses have become a phenomenon that was unheard of 15 or 20 years ago. This week, with the tube strike taking place, buses are being used inordinately in London and are making very slow progress through the congested streets. Hydrogen buses emit much less pollution than diesel or petrol vehicles. Does he agree that we need to promote hydrogen in all aspects, but particularly transport, whenever difficult times come?
Tom Collins
I thank the hon. Member for his point—he is entirely right. Hydrogen is a key enabler for industrial processes that need high temperature, high power and reducing atmospheres. It is a vital feedstock for a large part of our materials supply chain, and it is a key enabler for future heavy transport, with buses being an excellent example. I share his passion—my constituents will be the first to tell everyone how important buses are to me, and I desperately desire our current oil-fuelled buses to be replaced by some form of electrified transport, be that energised by batteries or by hydrogen and fuel cells.
So, what next? There are quick wins available in the space of hydrogen. Reviewing some of our safety regulations, which are slightly outdated for a world where hydrogen will become more commonplace, could make a big difference, particularly on exclusion distances and ammonia, which is currently treated as a chemical for storage. Introducing regulations that treat ammonia as a fuel and allow its storage under simplified guidance would make a huge difference. I have already mentioned blending. It is time for the Government to work in an agile and innovative way with other Departments—as they are doing—to build out this capacity.
A longer-term road map for heavy transport and for heat would be very helpful. These are hard-to-abate sectors. I would like to see recognition that heat has proven one of the hardest areas of our economy to decarbonise. It is important that, while we have ambitious targets to electrify heat, we keep the door open to hydrogen providing that fallback, as gas does now for many electrified projects, to allow us to get there with confidence, rapidity and depth of decarbonisation.
Our planning reform is doing fantastic things for the energy transition, allowing us to build out our electricity transmission system and future storage. There are opportunities for us to echo that in gas and liquid fuel transport and storage, alongside electricity, for hydrogen and ammonia in particular. As I have mentioned, innovation support is vital as we work cross-Department to bring this transition. I have seen at first hand how powerful it can be when Government set goals and work in close partnership with industry, but I have also seen where there is room for us to strengthen our innovation offer around hydrogen to make this transition even more successful.
There has never been a more important time for the agile, mission-led approach of our Government. There is a need for ambition in this space. Investment is currently following vision, and the UK has an opportunity to present a powerful vision. We have seen some of our work around hydrogen and the investment rounds slipping. This is the time for Government to be agile, mission-led and work in partnership with industry to accelerate that, bring shared focus and work in closer partnership with industry, with a goal-setting approach, to cut through the administration and bureaucracy and, with confidence, build out the future economy that we can start to more clearly envisage. With ambition and decisive action, the UK can prosper, and a vital part of that is our hydrogen supply chains prospering.
Several hon. Members rose—
Mr Clive Betts (in the Chair)
Six Members are indicating that they want to speak. We have about 45 minutes, so that means a maximum seven minutes for each speech from Back Benchers. I call Wera Hobhouse.
Wera Hobhouse (Bath) (LD)
Thank you, Mr Betts; it is a pleasure to serve with you in the Chair. I congratulate the hon. Member for Rushcliffe (James Naish) on securing the debate—I supported the application—and the hon. Member for Worcester (Tom Collins) on introducing it so competently.
The UK has established strong foundations for a domestic hydrogen industry, which already contributes £8.4 billion to our economy. Improving hydrogen supply chains could benefit the economy by £18 billion in gross value added and 60,000 new highly skilled jobs by 2050, according to research from Hydrogen UK. Sixty thousand new jobs and £18 billion in gross value added for our economy are not something to ignore.
Sustainable, or green, hydrogen has the potential to drive job creation, economic growth and decarbonisation across sectors currently reliant on high-carbon fuels, and particularly the aviation sector. There is enormous potential for hydrogen in aviation. According to the International Energy Agency, 65 million tonnes per year of low-emission hydrogen must be produced globally by 2030 to meet our net zero targets. Domestically, Hydrogen UK has made it clear that we need 10 GW of hydrogen production capacity by 2030, alongside urgent investment in storage, to more than treble our capacity between 2030 and 2035. We need this infrastructure to reach a final investment decision.
A significant portion of the UK’s hydrogen storage will be for aviation. On a recent visit just north of my constituency, I saw the extraordinary work of ZeroAvia. Its business model is currently built on retrofitting relatively small aircraft, but it has the ambition to expand to medium-sized aircraft. It is absolutely fascinating to see what ZeroAvia has achieved. Backed by the likes of Airbus, British Airways and the UK Infrastructure Bank, ZeroAvia has already achieved world-first flight demonstrations of hydrogen electric engines. It has raised more than $250 million and employs more than 200 people.
ZeroAvia’s hydrogen electric engines are not a distant dream. Airlines are already pre-ordering more than 3,000 units, with commitments from American Airlines, United Airlines and UK operators. These engines can cut aviation’s climate impact by more than 90%, with only water as a by-product. Again, the real beauty of this is that ZeroAvia is retrofitting planes, so we do not have to build new ones. That in itself is an emission reduction. Of all modes of transport, aviation is perhaps the best suited to hydrogen. It is energy-intensive and weight-sensitive, making hydrogen’s high-energy density and efficiency critical. Unlike road or rail, aviation has more limited alternatives.
Hydrogen is not just desirable, it is essential. But we can achieve these things only with better storage solutions, as the hon. Member for Worcester mentioned, lower operational costs and a secure, consistent supply. Producing green hydrogen is extremely energy-intensive and requires a large amount of renewable energy. On average, producing 1 kg of hydrogen consumes around 50 kWh of electricity. This high energy demand means that to produce more green hydrogen, we must drastically accelerate our renewable energy capacity.
That is why I am a little concerned that some renewable energy projects are being pushed out of the grid connections queue, because they are not seen as immediately necessary. That seems a short-sighted approach, and it could hinder our ability to scale green hydrogen production. What we should be doing is oversupplying renewables so that we have a surplus that allows us to not only produce enough green hydrogen but potentially become a net exporter of renewable energy across Europe.
The hon. Member for Worcester also mentioned the need for stronger regulation for the wider applications of hydrogen. The Government must set clear standards for sectors such as domestic heating, where hydrogen boilers still lack the necessary regulation for home use. I know that the Government are a little slow on hydrogen in home heating.
Tom Collins
Before coming to this place, that was my exact area of work, and I can assure the House that the current regulatory framework has enabled the certification of these products. They have been shown to be safe; in fact, they are soon to be trialled up in Scotland, in Fife. So some of these barriers have recently been mitigated and reduced very quickly by UK innovation. The opportunity is there now to push forward into delivery.
Wera Hobhouse
I am glad the hon. Member clarified that. He also made a point about mixing hydrogen. Hydrogen is possibly not the end destination for heating in this country, but it will be extremely important to continue looking into it as a transition and to ensure that the Government do not miss an opportunity. In a recent meeting with Wales & West Utilities, which manages the gas grid in my constituency and beyond, it was explained that hydrogen remains a highly viable option for household heating, particularly if we look into blending.
We should take inspiration from the University of Bath, a national leader in research and innovation. Bath is a key partner in pioneering hydrogen aviation projects such as the hydrogen fuel cell-powered double-decker bus and liquid hydrogen pump technology.
Hydrogen is not a silver bullet, but in aviation it is the fuel of the future. If we back it with the urgency it deserves, Britain can lead the world in hydrogen supply chains, deliver cleaner, cheaper energy, and ensure that our journey to net zero is also a journey towards prosperity and fairness.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
It is a pleasure to serve with you in the Chair, Mr Betts. I congratulate my hon. Friend the Member for Rushcliffe (James Naish) on securing the debate and my hon. Friend the Member for Worcester (Tom Collins) on opening it so well.
The Teesside region already produces much of the UK’s hydrogen, in an economy built on the legacy of ICI, and it continues today with BOC’s Teesside hydrogen carbon capture, usage and storage project. We have the pipelines, the port and the skills, and now the prospect of a new £4 billion net zero Teesside CCUS project linked to the Endurance saline aquifer beneath the North sea. With projects across our industrial cluster, we are well equipped to deliver perhaps a quarter of the Government’s 2030 target.
The potential is huge, representing thousands of construction jobs in the short term, with long-term roles in energy, transport and manufacturing, and the chance to give our young people skilled work close to home. This is about livelihoods and whether young people in Middlesbrough, Redcar, Cleveland, Stockton—my hon. Friend the Member for Stockton North (Chris McDonald) is in his place—Hartlepool and Darlington can find skilled, unionised work in the industries of the future, rather than having to leave home to find opportunity elsewhere.
That shift will not happen by accident and needs Government to back British supply chains, to ensure that we build the infrastructure and elements we need here, not overseas. It means putting in specific sector support for industries such as steel manufacturing and construction to adopt hydrogen where it is needed—for example, hydrogen for direct reduced iron. It means ensuring that contracts come with conditions on fair pay, skills and apprenticeships. And it means putting local communities in the driving seat, devolving power and investment so that the people of regions such as Teesside can shape this transition, not just watch it happen from the sidelines.
Given the outsized role the north of England is already playing through the three major clusters, the Government should perhaps establish a regional body—an acceleration forum—to draw together existing work and drive hydrogen development in the north. In any case, pioneering businesses, research partners and regional governments are driving the work forward, and co-ordinating that investment and innovation is important.
I am slightly more cautious about domestic heating, which has been touched on in the debate. That is purely because our region saw the unsuccessful trial in Redcar in 2023, when the public opposed the project in the end. It is important that people are brought along in the process. That is not to say these things are not safe or possible—there are areas of the country where blending works well—but it is about doing this with communities.
Wera Hobhouse
I already made the point that we need to take the public with us, but that would be the same for any hydrogen application. Where would we be if people were so concerned about hydrogen that they did not want to be on a hydrogen bus or a hydrogen-powered aeroplane? Is there not a case for educating the public better, rather than abandoning projects altogether?
Luke Myer
I can only speak to the public shift we saw in our region. The public are fully behind projects such as hydrogen fuels for public transport, which we are seeing trials of in Teesside. But, for whatever reason, there was much more reluctance over the Redcar trial, and it was not without significant investment in educating people on the benefits.
Tom Collins
Once again, I intervene only because I have painful personal experience of this situation. The Redcar trial was subject to a distinct, explicit and targeted campaign seeking to bring about its failure. It was extremely frustrating to experience, as the trial was testing both electrification of heat and conversion to 100% hydrogen—two key pathways for decarbonising heat that need to be validated. It was very frustrating to see that, and it was the result of a targeted campaign, but we have also seen that where the engineering is well explained and consumers are able to understand that this is just a different gas—in fact, a gas that already circulated in UK gas pipes prior to the conversion of the 1960s—these things can be done successfully. It is therefore important that we show positive ambition for hydrogen and help the public to feel secure about a problem where the engineering has been solved.
Luke Myer
Having tried to make many of the points that my hon. Friend made during that experience, I am more sceptical about whether that shift will happen quickly or easily. There is certainly huge potential for industrial use and for transport.
In any case, our region helped to power Britain’s industrial revolution, and we can do the same today through the age of clean energy. Hydrogen can anchor a new era of good jobs and pride in our communities if we have the ambition to make it work for working people.
Jim Shannon (Strangford) (DUP)
As always, it is a real pleasure to serve under your chairship in Westminster Hall, Mr Betts. I thank the hon. Member for Worcester (Tom Collins) for leading the debate and for the many conversations in recent years surrounding the need for alternative methods to fossil fuels. There is no doubt whatever that hydrogen is a much talked-about method, so it is great to be here today to discuss these matters. I believe that we must commit ourselves to the net zero targets, and we must meet them, or try to. To do so, we must have a strategy that encompasses all of the United Kingdom of Great Britain and Northern Ireland.
I am pleased to see the Minister, who has a passion for this issue, in his place. Maybe the fact that he is still here today tells us just how good a job he is doing. He is a safe pair of hands and a friend to us all, for he has a deep interest in this matter. I am also pleased to see the shadow Minister, who brings a spark to this debate in every way, as he does when he speaks in the Chamber.
Northern Ireland wants to play a role. We have strong potential for green hydrogen production, due to our significant offshore and onshore wind resources, especially surrounding the Antrim coast in the Irish sea. There are also interests in blue hydrogen, but for Northern Ireland specifically, green hydrogen is the focus for sustainability. Queen’s University has been to the fore in trying to promote the issue; I spoke to the hon. Member for Worcester beforehand and I know that he knows that, but maybe the Minister does not, although he is a regular visitor to Northern Ireland, and why not? What better place to go for work or indeed for a wee trip? It is important to have connections between universities and business, and the partnerships that come from that. Perhaps Government could focus on that as well. I know that the Minister does that regularly.
There have been discussions throughout Northern Ireland about hydrogen storage and the potential need for development. Northern Ireland’s main hydrogen storage development is the Islandmagee energy storage project, a unique salt cavern facility in County Antrim, in the constituency of my right hon. Friend the Member for East Antrim (Sammy Wilson). That is just an example of what we can use to move this development forward in the direction that it needs to go. That unit was initially planned for natural gas, but it has the potential to transition to hydrogen, supporting net zero goals.
We have heard of many developments in relation to hydrogen and transport over the last couple of years—my hon. Friend the Member for East Londonderry (Mr Campbell) referred to that in his intervention, and the hon. and learned Member for North Antrim (Jim Allister) will do likewise in a few moments. The great thing about Wrightbus is that its net of employment applies not only to North Antrim; many people across all constituencies work for it and have helped to develop the project there through their work on the shop floor. Some of the UK’s companies have taken part in a project to inject millions into the economy and create thousands of jobs, and Wrightbus in Northern Ireland is one of them. It is a leading producer of hydrogen buses, which provide safe, reliable and cost-effective transport.
My hon. Friend the Member for East Londonderry was right to make the point about the travel chaos in London yesterday. What should have been a 15 or 20-minute journey took an hour and 20 minutes; the lady who works in our office had to leave home two hours earlier to try to get the bus connections—or even to get a bus. These are things that we should be looking at, not just because of this week but because of their ability to reduce the impact on the atmosphere and environment.
The progression to net zero will also bring countless jobs, offering great opportunities in terms of apprenticeships. My query to the Minister is what has been done to encourage apprenticeships. There was a great defence development strategy statement yesterday, which was good to hear, and out of that was coming jobs—but were apprenticeships coming out of that as well? Could the Minister tell us about apprenticeships within the hydrogen sector?
There are also numerous hindrances preventing hydrogen from emerging. There is the opportunity to establish strong supply chains, but there are some challenges, for example the high cost of producing and using low-emission hydrogen compared with fossil fuel alternatives. There is also some uncertainty surrounding the future applicability of hydrogen in different sectors. Globally, we need to be aware that there is so much competition. It is good to have this hydrogen debate, and to have a hydrogen strategy, but we also need to be competitive. We must take advantage of the opportunities that we can while we have the capability to do so. I ask the Minister, how we can keep those costs down and make it competitive for the future.
As we look to the future of energy, hydrogen offers one of the most promising, yet complex, paths to decarbonisation. It presents us with a clear opportunity to create cleaner industries, decarbonise transport and build a more resilient energy system across Northern Ireland and the rest of the United Kingdom. I always think that the United Kingdom of Great Britain and Northern Ireland with all the regions together, can do it better, and I think the Minister will reinforce that in his summing up.
I look to the Minister to engage further with his counterparts in the devolved nations. I know he does so regularly, but it is always encouraging when the Minister says he has been in touch with Queen’s University Belfast, or with Wrightbus in Ballymena or wherever it might be, to ensure that we are doing things to progress and move forward as a collective—a collective that is better together in relation to our net zero supply chains.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Worcester (Tom Collins) on a very timely debate indeed; he knows his subject, and that is to the benefit of us all. Touching on the contribution made by my hon. Friend the Member for Bath (Wera Hobhouse), if we had mentioned hydrogen aviation prior to about 1940 it would have had people screaming in fear, because that was the era of the Hindenburg and the R101. The hon. Member for Worcester is absolutely correct that the potential for air transport is massive; the fact that when hydrogen and oxygen are combined we get water means that it is the cleanest of all forms of energy.
I made mention in my intervention of the production of ammonia. If my chemistry lessons have stuck, I think it is NH4, which can then be turned into fertiliser. Our farmers are very worried by the increase in fertiliser prices, and it looks as if they are going up again this year. That can play merry hell with their farm accounts as they try to forward guess what their profitability will be. We know that EU tariffs on Russian fertiliser mean an increased price for EU countries. My point is a simple one: the more we can promote the manufacture of fertiliser out of ammonia from hydrogen produced in the UK, then the better that will be for this country. We have a great export opportunity.
I give great credit to the previous and present Governments—my constituents are very grateful to them—for having had the courage to go for Cromarty Firth and Inverness green freeport. The idea producing hydrogen was part and parcel of formulating that bid to the previous Government, and of the way we talk to the present Government. The experts in the field have been telling me that the potential for bulk hydrogen to be sailed across the North sea from the north of Scotland to very keen markets in Europe is huge, and that there is real money to be made here. When the bids were put together, the production of green hydrogen was part of that bid.
The Minister, whom I, like the hon. Member for Strangford (Jim Shannon) am very glad to see in his place, knows full well that the issue of the grid we are proposing—where the pylons and lines go, whether they are sub-sea or above the ground, the batteries and all that—is a controversial and hot topic. However, I give him his due; in his previous incarnation he was as helpful as he could possibly be.
When the grid improvements were initially proposed, and yes we of course have to do that if we are serious about getting to net zero, I wrote to the then Prime Minister and the First Minister of Scotland to ask whether the proposals matched the production of green hydrogen that we are keen to do in the north of Scotland. I may or may not have got the formula for ammonia right but, if I remember my physics correctly, the longer the distance one has to send electricity down a wire or a cable, the more energy is lost. Is it I2R? It is something like that; I have probably got it wrong, and the Minister probably knows it better than I do, but the point is that the longer the cable, the more resistance, and energy is lost because heat is produced and radiates off it.
I earnestly say to the present Government, looking at the production of green hydrogen in the north of Scotland, “Would it not make sense to produce an awful lot of that as near as possible to where the energy is actually being created?” We have a plethora of wind farms in the north of Scotland. We have the Beatrice wind farm off the coast of my constituency and there are many others up and running or projected for Scotland. It seems to me that the manufacture of hydrogen as near as possible to that source of energy would make enormous sense.
Tom Collins
The hon. Member is entirely right. One of the key questions often asked about green hydrogen is cost. There are many projections showing cost coming down dramatically in future, and part of that comes from the fact that hydrogen production is able to utilise renewable electricity that would otherwise be constrained or not used. He is entirely right that geographical and time constraints on when energy is produced are vital, but create a low-cost source of energy for the production of hydrogen, which brings the cost of hydrogen down, so I thank him for his point.
Jamie Stone
I thank the hon. Member for his helpful intervention.
I want to conclude with two points. First, I am optimistic that this is a subject that will enjoy cross-party support—I cannot see anyone rocking the boat on this one; it would be madness to do that—and sometimes, when things have cross-party support, they really can happen. There is a great opportunity in this country.
Secondly, to make an unashamed, blatant advertisement for my constituency, as Dounreay decommissions, we have sites and skills particularly near to where the energy is being created. If the His Majesty’s Government would look at the creation of hydrogen in my patch, I would be most awfully grateful. With that blatant touting for business, I conclude my contribution.
Jim Allister (North Antrim) (TUV)
It is a pleasure to serve under your chairmanship, Mr Betts. I have the privilege of representing North Antrim, which has the success story of Wrightbus. One of Wrightbus’s many claims to fame is that it produced the first hydrogen double-decker bus in the world, and has been a leader in the technology in the evolving success story that hydrogen can be.
The fundamental problem for our nation in fully exploiting hydrogen is the mismatch between the technology and the infrastructure. The ability to refuel hydrogen buses is curbing their potential production. From talking to Wrightbus, I know that it could and would produce a lot more hydrogen buses, but for the fact that customers are restrained by the lack of infrastructure for servicing them and keeping them on the road. Despite the remarkable range of the Kite Hydroliner bus that Wrightbus produces—it can do up to 1,000 km—it needs to be refuelled. That is what is holding us back in the United Kingdom, including in Northern Ireland.
It is not without significance that, although Germany is a major player in hydrogen production, Wrightbus has been able to sell it a large number of hydrogen buses. Why? Because Germany, through a Government programme, has advanced its focus on synchronising with the infrastructure that is needed. There is also a considerable German programme to actively support the hydrogen bus market. That is why it is possible. China, of course—as in most things—is also a big player when it comes to hydrogen. In particular, it has advanced the production of hydrogen from organic waste; in that regard it is probably well ahead of most of the rest of us.
There are multiple opportunities in relation to how hydrogen is produced, because we now have the leading technology to use it in transport, particularly in buses. However, the one area in which I think we are failing is in providing the infrastructure, which must be there to make it succeed.
Sadik Al-Hassan (North Somerset) (Lab)
Does the hon. and learned Member agree that to provide certainty for long-term investment and strategic infrastructure development, and to support robust supply chains, we must invest in changing regulatory environments by working with and funding regulators—such as, for example, the Civil Aviation Authority—to enable a long-term, clear road map for hydrogen development, production, supply chains and use? Does he also agree that £16 million for a four-year road map offers great value for money?
Jim Allister
Yes, I am happy to agree with that. It feeds into this point: the Government talk about their industrial strategy, which is good, but that strategy needs to energise the infrastructure in synchronisation with the technologies we are using. When it comes to hydrogen, part of that industrial strategy needs to focus more on ensuring that we have the supply infrastructure to enable the deployment of the buses and other vehicles that we can readily produce to use of hydrogen.
Jamie Stone
We all want to see electric vehicles being used as much as possible, because that is part of getting to net zero. However, in a far-flung constituency such as mine, it is significant that a hydrogen-powered car has a greater range than an electricity-powered car. That backs up the argument the hon. and learned Member is making.
Jim Allister
The range for hydrogen is excellent, but when drivers get to the end of that range, they need somewhere to refuel it readily. The refuelling is quick: a hydrogen bus can be refuelled in 10 minutes. It is not a lengthy process, as it sometimes can be for electric buses. The technology for hydrogen is good and is developing at pace, but the infrastructure is the drawback. That is what is holding us back.
I say to the Government: let us do it in tandem. Let us of course continue to develop the excellent technology that we have, and the world leaders that we have in it, but let us synchronise that with ensuring that the infrastructure is there to match it.
Mr Clive Betts (in the Chair)
Back-Bench speeches must finish in time for the Front-Bench speeches to begin by 10.28 am. Thank you everyone so far for your co-operation.
Dr Roz Savage (South Cotswolds) (LD)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank the hon. Member for Rushcliffe (James Naish) for securing this debate, and the hon. Member for Worcester (Tom Collins) for leading it with such competence and aplomb.
Hydrogen has long been talked about as the fuel of the future, and we are beginning to see how it can be the fuel of the present. If we are serious about net zero, energy security and building the industries of tomorrow, hydrogen must play a central role. Electrification is advancing rapidly but, as we know, about 80% of global energy demand is still for molecules, not electrons. Heavy industry, transport and heating remain stubbornly difficult to decarbonise. Hydrogen offers us a way forward. It is flexible, storable and able to integrate with existing infrastructure. Hydrogen can be partnered with offshore wind in tanks under the water, reducing the need for pylons. It could reduce the need for oversized solar farms on agricultural land, which reduce the land available for food production. But if the UK is to reap the benefits, we must act with urgency. The Hydrogen Innovation Initiative has calculated that securing just 10% of the global hydrogen technology market could deliver £46 billion per year to our economy by 2050 and support over 400,000 jobs. That is a huge opportunity, but it will not wait for us. Other countries are also moving fast and if we are too cautious, we risk being left behind.
In my constituency of South Cotswolds, we see a glimpse of what that future could look like. In just three years, a start-up called Wild Hydrogen has grown from a small lab team to employing 18 skilled people. It is exploring ways to turn waste into clean hydrogen and biomethane, with the added benefit of capturing carbon. The company’s aspiration is bold: the idea that Gloucestershire could possibly host the world’s first carbon-negative town before the decade is out.
Another exciting young company, which is clearly hosting numerous MPs, is ZeroAvia, based at the Cotswold airport in my constituency. As already described by my hon. Friend the Member for Bath (Wera Hobhouse), ZeroAvia is developing hydrogen-powered planes with enormous potential to disrupt the aeronautical industry.
Whether or not those specific goals are realised, the principle stands: innovation is happening already here in the UK. What is missing at the moment is the scale of investment and policy certainty to move from promising prototypes to production at pace. This debate is extremely timely. We have a chance to shape the supply chains, the regulatory framework and the financial environment that will allow British firms to thrive and lead in this vital sector. If we succeed, the prize is not only economic but environmental: cleaner air, lower emissions and a more resilient, self-sufficient energy system. I echo the hope expressed by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) that this technology enjoys genuine cross-party support. Let us match the boldness of the innovators in my constituency and beyond with equal boldness in our policy. That means backing domestic supply chains, ensuring the right market signals are in place, and providing the certainty that investors and communities need. If we truly seize this moment, the UK can lead the world in clean hydrogen.
Mr Clive Betts (in the Chair)
I thank all hon. Members for their co-operation. I said to one hon. Member, quite rightly, that if you come late to the debate, you do not really expect to get called. Equally, if hon. Members speak in the debate, I expect them to stay and listen to other Members’ contributions. I shall be making that point to at least one hon. Member at the end of the debate. We shall move on to the Front Benchers. You can probably each have 12 minutes or so, but please make sure a bit of time is allowed at the end for the mover of the debate to wind up.
Claire Young (Thornbury and Yate) (LD)
It is an honour to serve under your chairship, Mr Betts. I thank the hon. Member for Rushcliffe (James Naish) for securing the debate, and his able substitute, the hon. Member for Worcester (Tom Collins), for opening it.
With good access to offshore wind resources, the UK is ideally placed to scale up green hydrogen production, and I can see the benefits of that locally. At IAAPs—the Institute for Advanced Automotive Propulsion Systems—which is just outside my constituency, work is being done on green hydrogen production and its uses in the aviation, marine and heavy transport sectors, and in June 2023 I attended the Western Gateway hydrogen conference.
The wider south-west and Wales could offer abundant renewable energy—the Celtic sea has huge offshore wind potential—which can anchor green hydrogen production alongside connected industries that can use the hydrogen. For example, in aviation, progress is being made by companies such as Airbus and GKN Aerospace, which employ hundreds of my constituents, and ZeroAvia, as highlighted by my hon. Friends the Members for Bath (Wera Hobhouse) and for South Cotswolds (Dr Savage).
I recognise the importance of the green hydrogen industry for growth and the high-value jobs that it brings for local people, as expanded on so well by, among others, the hon. Members for Middlesbrough South and East Cleveland (Luke Myer) and for Strangford (Jim Shannon). It brings huge decarbonisation benefits for things such as buses, as highlighted by the hon. and learned Member for North Antrim (Jim Allister), and adjacent benefits such as the production of fertiliser, as highlighted by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone).
However, we are not realising the potential for the UK to be a world leader for a number of reasons, as set out in the September 2024 report by Hydrogen UK on the hydrogen supply chain. The level of capital funding that the UK currently provides the hydrogen supply chain does not match the level in competitor regions. It has been slow to respond to a rapidly developing market and has not made the investment in infrastructure or skills needed to take advantage. As the Hydrogen Innovation Initiative has highlighted, the UK must act now.
Wera Hobhouse
Since there is a bit of a south-west mafia here, it might be worth mentioning those at the south-west hydrogen hub and to urge the Government to engage with them, because they are doing great work on the provision of hydrogen across the region and the sectors.
Claire Young
I thank my hon. Friend for her intervention, and I am grateful for the support of the wider south-west mafia.
Hydrogen UK has reported that unlocking storage infrastructure investment is urgently needed as the sector could require 3.4 TWh of large-scale hydrogen storage by 2030, which could increase to 9.8 TWh by 2035. Projects in the UK are currently smaller and lack visibility so project developers and off-takers stick with their international suppliers, and there is the ever-present problem for all small businesses of navigating the so-called valley of death as they grow.
The Liberal Democrats want to see investment in research and development of new green energy sources, which will be vital for developing new green hydrogen technologies and breaking our dependence on fossil fuels. We support a transition to clean, home-grown renewable energy sources to reinstate the UK as a world leader in renewable energy, to improve energy security and to bring down consumer energy bills: the importance of long-term storage to achieve that was highlighted in the introduction. Disappointingly, the previous Conservative Government failed to act with anything close to the speed or ambition that this challenge demands, and Putin’s barbaric and illegal invasion of Ukraine has exposed the risks of relying on countries that may seek to exploit dependence on fossil fuels and use it to their advantage.
Britan can lead the way on hydrogen innovation with our history of expertise, pioneering businesses and research institutions, but the Government have been criticised for failing to invest comparable amounts of capital funding in hydrogen to the level that other regions do. Hydrogen UK has called on the Government to support business-led innovation programmes, which would anchor supply chain growth into the UK and support collaboration with private business investment into key areas of the hydrogen supply chain. It has also called for a nationwide supply chain programme to leverage private investment into UK supply chains and key supply chain technologies, and to support both existing companies to pivot and new companies to enter the hydrogen market.
We want the Government to commit to winding down the oil and gas industry, but that must come hand in hand with a detailed plan for the redeployment of skills and local jobs. The economic impact assessment done by Hydrogen UK estimates that hydrogen can deliver significant economic benefits, including 30,000 jobs annually and £7 billion of gross value added by 2030. Trade unions in the industry are united in calling for substantial funding to build domestic renewable manufacturing but, disappointingly, the Chancellor did not commit to that in her most recent spending review. We urge the Government to invest in upskilling the existing workforce in adjacent sectors such as oil and gas, and to secure the investment that is needed to realise the job-creating potential of the green just transition.
Another key mechanism would be to link the UK emissions trading scheme with the EU’s, implementing a UK carbon border adjustment mechanism, making the business case stronger for low-carbon hydrogen in domestic supply chains, and adopt green procurement policies that support clean supply chain development. Finally, my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) has repeatedly called for a sovereign green wealth fund to reinvest wind-generated revenues into green industries including hydrogen, promoting decarbonisation and manufacturing job creation across the UK.
To conclude, we urge the Government to put in place a comprehensive plan to support low-carbon technology for industries and homes, in particular to make the UK a world leader in hydrogen.
Mr Clive Betts (in the Chair)
I have had a note from the hon. Member for Strangford (Jim Shannon) explaining why he had to leave the debate. I fully accept his explanation and apology, and thank him for giving it to me.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a great pleasure to serve under your chairmanship, Mr Betts. It is also a pleasure to take part in a debate on energy in which there is such a cross-party consensus. It is very rare in debates on energy these days to get such agreement on the way forward and on what we should invest in. I congratulate the hon. Member for Rushcliffe (James Naish) on securing the debate and the hon. Member for Worcester (Tom Collins) for his very able opening speech. It is also rare that we actually learn something in these debates, but I have learnt quite a lot this morning, which is a surprise.
The hon. Member for Worcester talked about the vitally important part played by gas in our energy system both today and moving forward, as well as blending, which is something we need a resolution to in the very near future, as I have heard in my discussions with National Gas and others. I urge the Government to make their decision on what the future might be as quickly as they can. That would be good for everybody.
The hon. Member for East Londonderry (Mr Campbell) spoke about hydrogen buses. He was followed by the hon. and learned Member for North Antrim (Jim Allister) in talking about Wrightbus and the issues around refuelling hydrogen buses. That is something that my constituents know about only too well. The city of Aberdeen was the first city in the United Kingdom to have a fully hydrogen bus fleet. However, it has been off the road since July 2024 because of issues with the refuelling station and the lack of available alternative supply. Although there are significant issues that need to be resolved, the future could and should be very bright indeed for hydrogen-fuelled buses.
The hon. Members for Bath (Wera Hobhouse), Middlesbrough South and East Cleveland (Luke Myer) and Strangford (Jim Shannon) spoke about the opportunities across our United Kingdom of Great Britain and Northern Ireland. They are absolutely right: every community, I suspect, has some industry, business or body involved in the development of hydrogen as a technology and energy source of the future. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) raised the important point about ammonia and fertiliser, which is not spoken about enough in these debates. We focus far too often on the energy use of hydrogen and not its added benefits.
I often speak about my own experience of the energy industry. Coming from Aberdeenshire, I have been surrounded by those working directly or indirectly in the oil and gas industry—it is inescapable. Where I am from, the importance of supply chains and economic value to local communities is obvious: everybody knows it, sees it in their high streets and hears about it from their family and friends employed in the sector. However, the oil and gas industry has not succeeded in telling that story beyond the north east of Scotland. In reality, 200,000 jobs across the United Kingdom are reliant on the oil and gas sector and supply chains. The industry touches every constituency in the country.
All that is to say that the conversation around the significance, impact and resilience of supply chains is vital. The future of hydrogen in this country is central to our decarbonisation is central to our decarbonisation ambitions and sustainable future, as well as our industrial future, but it is also shrouded in uncertainty. The commitment and investment in using hydrogen as a solution in hard-to-abate industries, heavy manufacturing, long-distance transport and high-temperature processes began under the last Government.
When we were in government, we kick-started the world-leading hydrogen economy and launched a hydrogen strategy and a 10-point plan. We recognised the significance of hydrogen to decarbonising and the importance to the economy of the supply chain across the country. That supply chain—from utilities to manufacturers, transport, distribution and storage, and from monitoring and control to the fabricators of fuel cell components, end users and decommissioning—plays a vital role in securing a future for hydrogen in the UK and adding value to local economies. We identified attractive opportunities for the UK supply chain on electrolysis package manufacturing, electrical equipment, materials manufacturing and more, with the UK supply chain capable of attaining a market share valued between £4 billion and £5 billion.
If the UK aspires to be a world leader in green technology, as I think we in this House agree we should, we must underpin that aspiration with a strategy to bring down industrial prices. The Government—indeed, any Government—should be ambitious for UK industry, as the Government say they are, in order to make industry in the UK great. This cannot be achieved without cheap energy and energy abundance, which can be secured with hydrogen. British industry cannot be competitive with expensive electricity and with businesses and manufacturers suffering under the burden of levies, as they currently are. We should bring down industrial prices, build new nuclear, eliminate levies on manufacturers and embrace energy abundance. Let us all agree to aspire to manufacture, innovate and export technologies that will drive the world closer to global climate solutions. Hydrogen is at the heart of that.
From steelmaking to shipping, hydrogen’s versatility makes this fuel an exciting prospect and component of our future energy mix. Yet major uncertainty is hanging over the system when it comes to whether hydrogen will be used for home heating. With a decision not due until 2026, the future of hydrogen remains somewhat in limbo. Regardless of the outcome when it comes to hydrogen for domestic heating, the gas grid remains essential. It could be repurposed to transport hydrogen to industrial clusters, power stations and transport hubs. We cannot and must not abandon this vast, valuable national asset. When it comes to distribution, pipelines, road tankers and even ships will be needed to move hydrogen. The existing gas grid could play a transformative role, if it is repurposed effectively.
From production to storage and from distribution to utilisation, hydrogen in the UK heralds a wealth of opportunity. It is incumbent on this Government—and, indeed, on any Government—to create a landscape where the manufacturing industry can thrive and profit and where domestic production capacity can grow. The hydrogen supply chain does not exist in a vacuum; it builds on the legacy of the oil and gas supply chain—the infrastructure, engineering expertise and global logistics that have powered the UK for decades. With the right approach from the Government, it will do so for many decades to come.
The Minister of State, Department for Energy Security and Net Zero (Michael Shanks)
It is a pleasure to serve under your chairship, Mr Betts—and to still be here as the Energy Minister. It is the only Government job that I wanted to do, which is perhaps just as well given how the reshuffle has landed, so it is genuinely a pleasure.
As I have often said, these debates are a great example not only of how we come together to talk about quite complex topics relating to the energy system, but of how this part of Parliament works. I always come out of these debates having learned something, as the shadow Minister said. Sometimes it is quite a niche fact that I am not quite sure what I will do with. I always learn a huge amount from my hon. Friend the Member for Worcester (Tom Collins), given his detailed knowledge of the industry and its practical application, which is often lost in our debates. I thank him and my hon. Friend the Member for Rushcliffe (James Naish), who also worked in the energy sector, and whose constituency was home to Britain’s last coal power station, the closure of which I attended last year. His understanding of the importance of the transition and the potential of future clean energy technologies is hugely welcome.
It has been an interesting debate not least because, as the shadow Minister said, we have had a degree of consensus. We once had consensus on quite a lot of things in respect of the future of our energy system, but that has somehow changed in the last few months. I will leave it to others to judge why that is, but it is really important that, given the huge opportunities for the future of the country and for thousands of jobs, there is a degree of consensus. As the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said, we get things done when there is a degree of consensus, and that is hugely welcome. The hon. Gentleman referred to Joule’s law on the loss of power, which I think, if my standard grade physics holds up, is P = I2R,. I am sure people will correct me when that is typed up in Hansard.
Let me say a bit about our commitment to hydrogen before I respond to some specific points. We have been clear that hydrogen will play a fundamental role in the future of our energy system. Not only is it a crucial part of how we decarbonise heavy industry and transport, which are among our most energy-intensive and hardest-to-decarbonise sectors, but it is, as many Members have pointed out, part of our work to provide large-scale storage for our baseload of year-round clean power. As the Government have set out in everything we do, our mission to achieve clean power by 2030 and to maintain that relates to tackling the climate crisis, delivering energy security and reducing our dependence on unstable, volatile fossil fuel markets. How we take back control of our energy supply and storage will clearly be a critical part of that. It can also help us to reduce system costs as both electricity demand and renewable generation increase.
There are other great other examples of the use of hydrogen. The hon. and learned Member for North Antrim (Jim Allister) made the really interesting point that the world’s first hydrogen double-decker bus was made in North Antrim, which I had not realised. As the shadow Minister pointed out, there are challenges around how we maintain such innovation and make sure that it continues to work in the future. Last week I was in Denmark to meet European Energy Ministers. It was really interesting to see examples there, as well as at the port of Amsterdam in the Netherlands, of where infrastructure is being rolled out, while facing some of the same challenges about how we achieve the scale that makes it competitive. That is part of the work we will have to do.
We are acting now to seize the economic and industrial benefits of the hydrogen sector, which is why we have been not only pushing forward on our policy framework but trying to make clear our ambition. There is much more to be said about that, but there has been industrial and investor interest in our hydrogen allocation round programme. The first HAR1 projects are now putting spades in the ground, with the first wave expected to access more than £2 billion over the next 15 years in revenue support from the hydrogen production business model, and over £90 million in capital from the net zero hydrogen fund. Over £400 million of private capital has been committed up front for 2024 to 2026, with more than 700 direct jobs created in construction and operation. Those are among the first commercial-scale hydrogen projects in the world to take a final investment decision, and we expect them to become operational between this year and April 2028. That will kick-start our green hydrogen production at scale.
Following the success of HAR1, we expect to announce successful projects in the second hydrogen allocation round in early 2026. The current shortlist includes innovative projects that could support ammonia production in Shetland, produce new clean energy at Grangemouth and decarbonise lime kilns—one of the first steps in cement production—in the Humber area. Moving forward, in June this year we published our industrial strategy, which set out plans for the further hydrogen allocation rounds, HAR3 and HAR4, for our first regional hydrogen network, and for the launch of the hydrogen-to-power business model in 2026.
My hon. Friend the Member for Worcester talked about the crucial role that storage will play in the renewable energy we are building. The question of how we store that for when we need it is crucial. We laid out our plans in the industrial strategy, backed up by the spending review, with £500 million for hydrogen infrastructure, partly to look at how we unlock hydrogen’s potential for clean power and provide home-grown energy and good jobs. We also have an ambition to deploy the first regional hydrogen transport and storage network, to become operational from 2031, which will aim to connect producers with vital end users such as power for the first time. This will unlock hydrogen’s role in clean power and help to realise the potential of large-scale hydrogen storage in maximising renewable energy use to support the transition to a decarbonised energy system. We are also currently designing a hydrogen storage business model, alongside a hydrogen transport business model, with the intention of providing investors with the long-term revenue certainty that many Members have raised in the debate.
There is no doubt that the clean energy transition is the economic opportunity of the 21st century. This is about not just our energy security but, as many hon. Friends have pointed out, how we deliver the good, well-paid, trade-unionised jobs of the future. It is about how we reindustrialise communities that have for too long been left behind. The UK is well placed to be a global leader not only in hydrogen deployment but, crucially, in making sure that we capitalise on the supply chains, which is where we get the jobs, given the shared skills, experiences and qualifications in the existing oil and gas sector, our strengths in advanced manufacturing and innovation, and the policy environment we have set out.
We have taken significant steps to attract inward investment, and the public finance tools set out in the clean energy industries sector plan will play a crucial role. We have also looked at the question of skills, which a number of Members raised earlier. The Lib Dem spokesperson, the hon. Member for Thornbury and Yate (Claire Young), made the point very well. The hydrogen skills framework, which we published just a few months ago in April, is an open-source framework to try to enable the development of new qualifications and training programmes, in conjunction with industry, to make sure that we are bringing forward the apprenticeships and the skilled workers of the future.
We are also making sure that companies can access international markets and collaborate with global partners. We want to build a domestic success story by exporting hydrogen equipment and services across the world and reinforcing their role in global hydrogen supply chains, with the UK set to benefit from being right at the forefront of that work.
As the sector grows, we want to make sure that it benefits from the comprehensive public finance offers that we have set out. I will cover that briefly, because we have debated many of these things in the past. Part of that includes Great British Energy, with its £1 billion clean energy supply chain fund, which will be aligned with the clean energy industries sector plan to support companies that have the potential to grow in supply chains.
We have empowered the National Wealth Fund with a total of £27.8 billion in capital to enable it to take on higher-risk investments, including equity. It will invest in capital-intensive projects, businesses and assets, with at least £5.8 billion on carbon capture, low-carbon hydrogen, gigafactories, ports and green steel over the lifetime of this Parliament. We have also launched £4 billion in British Business Bank industrial strategy capital to scale up the financing package, and we introduced the clean industry bonus following the success in the round that we have just concluded. We are looking at whether we should expand that to hydrogen, and we will consult on that in due course.
We will continue to do all that we can to put the UK at the forefront of the global hydrogen revolution and thereby unlock billions of investment, create new-generation jobs, build the infrastructure and drive the clean growth that we—there seems to have been consensus today—all want to see. This autumn, we will publish the UK hydrogen strategy, which will be evidence-led, impact-focused and designed on the premise of fast-tracking delivery.
Since the publication of the last hydrogen strategy four years ago, the landscape has evolved significantly. Electrification technologies have moved on rapidly, pointing to a more focused and essential role for hydrogen, complementing the electrification that we will see in so much of our energy system. The new strategy will sharpen our priorities, deepen collaboration with industry, which is key to this, and seek to unlock the full potential of hydrogen over the next decade.
Jamie Stone
Does the Minister agree that we should at least check the proposed grid improvements against the possible strategic sites where hydrogen could be made?
Michael Shanks
My very next point was on the future of the network. It wasn’t, actually, but I will come to it now, because the hon. Gentleman made a very good point, which I meant to come back to. He is right, of course, that we need to invest in the grid—even if we were not embarking on this clean power mission, the grid is very much in need of upgrading—but we want to take the strategic planning of that much more seriously than it has been taken in the past.
We know that we need to build significant amounts of grid—the hon. Gentleman recognised the importance of that—but we also want to plan the future of the energy system strategically so that the grid follows a logical way to build out the energy system. His point about trying to make use of the abundance of clean energy to transfer it into hydrogen as an off-taker was well made. It will feed into the work on the strategic spatial energy plan. It is about how we best use all the energy system to our advantage. It is also about how we can reduce things like constraint payments and make use of it as efficiently as possible. That is an important point that we will take forward.
To conclude, our vision is clear: a thriving low-carbon hydrogen economy—one that decarbonises those hard-to-electrify sectors, strengthens our energy security and fuels good jobs and growth across the country—is at the heart of the Government’s mission.
Jim Shannon
I asked a question about the opportunity for apprentices. I know that the Government are committed to that; I have never had any doubt about that, but I want us to show where the opportunities may be. I know that the Minister is also committed to ensuring that all parts of the United Kingdom of Great Britain and Northern Ireland can take advantage.
Michael Shanks
A key part of my conclusion was the useful challenge that there always is from the hon. Member for Strangford (Jim Shannon) about ensuring that we represent all parts of the United Kingdom. He was right to point out earlier that it is a beautiful part of the country to visit. I confess I have still never been to Strangford, but there is still time.
The hon. Member is right on two other fronts. First, the skills strategy is all about unlocking the next generation of workers. We need to inspire people in school right now to see that we want them to be at the heart of the energy system of the future, and apprenticeships are crucial for doing that. We will create tens of thousands of jobs in the sector, but as part of that there has to be investment in apprenticeships. On his wider point, he knows that I enjoy the engagement with Ministers in devolved Governments across the country. We work closely with the Northern Ireland Executive. As I always say, the energy system is transferred in Northern Ireland, but there is a huge number of areas where we can learn from each other and work together to ensure that the people in Northern Ireland and Great Britain benefit from what we are trying to achieve, and we will continue to do that.
To conclude my conclusion, unless anyone else wants to intervene, we are firm in our commitment to working with industry. There is a huge opportunity here. This is an exciting moment for us to recognise—as we are doing with small modular reactors and with floating offshore wind—that we have the potential to be at the forefront of the next great thing in our energy system. It requires the strategy that we are putting in place and the long-term confidence for investment, and we will continue to work hand in hand with industry, investors, innovators, workers—
Michael Shanks
I will not, because I am just about to conclude. We will work with workers and trade unions to turn this vision into reality and ensure that every part of the UK benefits from the potential of growth and jobs in hydrogen and in securing our energy system for the future. I again thank all Members for this hugely constructive debate. In particular, I thank my hon. Friend the Member for Worcester for the way he introduced it and for the knowledge and experience that he brings to all these matters.
Tom Collins
Mr Betts, I will be brief. I am grateful for your generosity with time, and for the generosity of other Members in allowing me to intervene. I thank the Minister for his response. He reasserted the fundamental role that hydrogen will play in our future energy system and the vital need for storage. I really appreciate that. I am excited about the hydrogen strategy, and to see that built with our new Government’s approach to partnership and with a clear vision for our future hydrogen system. That was reflected in his speech when he reasserted our firm commitment to working in partnership with industry.
I again thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this debate and for his continued championing of the energy sector and all our work in it. He is a strong and powerful proponent, and I am grateful to him for the opportunity he has given me today. The debate has reflected the huge opportunity that hydrogen presents for the UK in growing our economy and facing the challenges of decarbonisation and new energy systems. It has reflected the versatility of hydrogen, the importance of building a system where it is abundant, the need for us to support industry not just in classic industrial heartlands but in towns across our country, and therefore the need for us to transition the gas networks to hydrogen in the future as well.
The consensus that we have heard in the room today, for which I am very grateful—I am grateful for all Members’ fantastically knowledgeable contributions—shows that we are at the turning point where this transition is being led by economics rather than debates about technology. Electricity, hydrogen and ammonia form a pyramid of complementary energy vectors whereby we can provide sector coupling, flexibility and a dynamic future energy system that allows rapid and deep decarbonisation. I have had the opportunity to meet representatives of industry and hold workshops with a very diverse cross-section of industry, and the urge for the storage piece to be built urgently and in a decisive way, sponsored clearly by the state, is very clear, with that backed up by transition.
It is not often we hear industry asking Government to be more hands-on, but here they are. The need for that in building storage is very clear. They want Government to have a very clear vision and high ambition, and the Minister has been good today in helping to articulate that on the Government’s behalf. We are a Government of partnership, and now is the moment to build on that partnership and break down silos. In taking these steps, now is the moment when we can change gear, put our foot on the gas and bring about a rapid and ambitious transformation of our hydrogen supply chains.
Question put and agreed to.
Resolved,
That this House has considered hydrogen supply chains.
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Mr Clive Betts (in the Chair)
Before I call Freddie van Mierlo to move the motion, I remind other hon. Members that they can speak in this debate only if they have the prior permission of the mover and the Minister, and they have told the Chair. As no one has told the Chair, I presume no one else wants to speak. Of course, interventions are possible.
Freddie van Mierlo (Henley and Thame) (LD)
I beg to move,
That this House has considered the condition of national trails.
It is a pleasure to serve under your chairship, Mr Betts. National trails are the less well-known but no less important friend of national parks and national landscapes. They deliver significant benefits by improving access to nature, as well as for health and the economy. However, due to their low profile, national trails have been an easy target for cuts. Funding remained flat for the decade from 2013, resulting in a 30% real-terms cut. Although funding began to rise with inflation in 2023, no account has been taken of that lost decade.
There are 16 national trails across the UK, which have more than 309 million visits every year. They provide access to nature, often just a stone’s throw away from people’s houses. They are treasured assets for walking, horse riding, running and cycling. Unlike some other countryside rights of way, they are extremely well signposted, making them more navigable to those less familiar with the countryside.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member on bringing this debate forward. I spoke to him beforehand. Northern Ireland stands apart from the rest of the United Kingdom in that it does not have a formal national trail system. What we do have is the Ulster Way, a 636-mile walk across the six counties of Northern Ireland. However, there are issues about signposting, overgrown paths and access. Does the hon. Member agree that these beautiful scenic walks need to be protected and that we need to work closely with the relevant agencies to maintain upkeep?
Freddie van Mierlo
The hon. Member is right to point out concerns about the upkeep of the Ulster Way. I thank him for bringing that route to our attention; I look forward to perhaps walking it myself one day.
National trails tend to be far more accessible for people with disabilities due to additional work that takes place to replace stiles with gates and improve the standards of paths for wheelchairs users. For these reasons and more, the great British public appreciate the trails, and so does our economy. The combined economic impact of national trails totals £1.8 billion, and the contribution to health every year is £300 million through savings to the NHS.
In my constituency of Henley and Thame, we are lucky to have two national trails—the Thames Path and the Ridgeway.
Dr Roz Savage (South Cotswolds) (LD)
The River Thames arises in my constituency, and hence the Thames Path does too. As well as providing a beautiful walking route, it offers a valuable corridor for wildlife. Does my hon. Friend agree that funding the Thames Path adequately is essential if we are to protect habitats, contribute to biodiversity targets and preserve the natural beauty of South Cotswolds?
Freddie van Mierlo
My hon. Friend is right to point out the opportunity that exists in leveraging national trails for the improvement of biodiversity and meeting the Government’s biodiversity goals. I will come on to that a bit later.
I am going to focus on the two trails in my constituency: the Thames Path and the Ridgeway. As we have heard, the Thames Path begins in the Cotswolds. It enters my constituency at Benson, before darting across the river into Wallingford, and then crossing the river again and coming into Henley and Thame at Goring. From there, it makes its way into the beautiful village of Whitchurch-on-Thames before paying a visit to Reading and then onwards to my home town of Henley-on-Thames.
Tim Farron (Westmorland and Lonsdale) (LD)
My hon. Friend makes a point about the urban settlements that the trails go through. I have three trails in my constituency—the Pennine Way, the Pennine Bridleway and the Coast to Coast Path. They go through beautiful countryside, of course, but places like Orton, Shap and Kirkby Stephen benefit hugely from people walking through them. Does my hon. Friend agree that it is right that there should be good services and facilities in those places? I mention that in particular because of the current threat in Shap to close the public loos. Does he agree that local councils, both at parish and district level, should do everything in their power to maintain these services for local people and for all the walkers?
Freddie van Mierlo
My hon. Friend is right to point out the importance of services along these well-loved routes. He is also right to highlight that national trails are accessible from urban areas, which makes them particularly special compared with national parks and landscapes.
Walkers are currently forced to deviate from the Thames Path at both Benson and Henley. While the weir project is progressing in Benson, the Marsh Lock horse bridge between Henley and Shiplake has been closed for over three years. The current diversion requires crossing the dangerous A4155 twice and takes the walker well away from the water.
Since coming into office, I have been campaigning to reopen Marsh Lock bridge. With the help of an 11-year-old Brownie, Claudia, and her petition, access to a pot of £500,000 has been secured to begin plans for repairs. I continue to have conversations with the Environment Agency to ensure that repairs move forward. I am grateful to the Minister for Water for her engagement on that issue, but there is a long way to go, including to find the estimated £2.5 million needed to actually implement the repair.
Further north in my constituency, the Ridgeway national trail carves an impressive path from the iconic Goring Gap, through the village of Nuffield and the idyllic town of Watlington, before crossing the border into Buckinghamshire just after Chinnor. The Ridgeway is known as Britain’s oldest road. It is believed to have been in use over 5,000 years ago as a trading route. We know how important connection to our history and cultural heritage is. It is amazing to think that when we walk the Ridgeway, we are striking our feet on the same earth as our ancestors all those years ago.
The Ridgeway is also well known for the internationally renowned Uffington white horse, carved into chalk, but such chalk is vulnerable to damage and parts of the Ridgeway are classified as byway, meaning they are legally open to motorised traffic. The Ridgeway therefore suffers damage from recreational vehicles and off-road motorcycles. Local authorities and National Trails UK find it difficult to justify the regular repairs needed to maintain the trail to the correct standard. Ian, the project’s trail officer, is fighting to prohibit recreational motorised vehicles from the trail so that road users are limited to Trampers, off-road wheelchairs and road-legal pedal electric bicycles.
From just those two examples in my constituency, we begin to get an idea of how important protected national trails are for nature and our history. After speaking with representatives from National Trails UK, the Thames Path and the Ridgeway, I know that stark action is needed.
There are three main problems preventing the maintenance of national trails: legal status, underfunding and bureaucracy. National trails were originally designated by the National Parks and Access to the Countryside Act 1949. The main goal was to provide public access to the countryside and establish protected landscapes. Trails, parks and landscapes were considered under that legislation. It gave powers to Natural England to survey, plan and propose long-distance routes that would subsequently be maintained.
Since that legislation, however, the legal status and protections of those routes have deteriorated. Although national parks and national landscapes have what is known as a statutory purpose, national trails do not. They are therefore not sufficiently protected by or referenced in key legislation alongside parks and landscapes, giving them a lower status. That lower level of protection puts people’s access to the outdoors at risk.
Furthermore, the current designation of national trails is mostly limited to the width of the path, which is particularly worrying given that they neighbour vast biodiversity. The Thames Path, in my constituency, runs along the edge of Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust’s Hartslock nature reserve, which is one of the two remaining UK sites to have the monkey orchid. The Ridgeway passes through the Chinnor Hill and Oakley Hill nature reserves. Failure to recognise the paths’ interconnectedness with other nature means that BBOWT has reported damage to the surrounding nature due to ill-thought-through diversions or people straying from the paths, but without recognition of the surrounding nature, there is no allocation for renewal and maintenance.
The second main problem is funding. Considering how many economic benefits national trails bring, they have not received a meaningful funding increase since 2013.
Richard Foord (Honiton and Sidmouth) (LD)
My hon. Friend talks about the economic benefits of national trails. In my constituency, we have the South West Coast Path, which attracts 9 million visitors every year and is reckoned to support them spending about £500 million. Does my hon. Friend recognise that a south-west inland path would maintain more hospitality jobs in Devon? Does he recognise the value for the hospitality sector in his constituency too?
Freddie van Mierlo
My hon. Friend’s intervention speaks exactly to my point around the closed Marsh Lock horse bridge, which has resulted in a direct loss of hospitality revenue in the local economy because of people avoiding the path due to the long diversion.
As I said, there are many economic benefits to national trails, but they have not received a meaningful increase in funding since 2013. That is despite the fact that the national trail network has increased in size over the last decade, and will double in size by the end of 2025 with the addition of the King Charles III England Coast Path and the Coast to Coast Path. Increasing the workload while stagnating the funding is a recipe for decline; the Ridgeway’s funding now stands at just £1 per mile to cover all revenue, staffing costs and maintenance.
National trails are facing a range of new challenges that funding is not keeping up with. When speaking with Wendy and Ian, representatives from the two trails in my constituency, they both noted the changing weather patterns as a barrier to the trails’ protection. In Oxfordshire, rainfall was 300% above average in September 2024, but dry weather in the summer has worn away the grass on the riverbank in popular areas of the Thames Path, leaving bare soil exposed. The combination of bare soil and high rainfall means that there is an increased likelihood of erosion, with banks washing into the river. In Goring, part of the river path had to be closed last year precisely because of that issue.
Flooding presents an additional challenge. In anticipation, national trails are preparing to identify winter routes and diversions to avoid flooding, but without the funding, groups are worried that that they will find it difficult to tackle these new challenges.
Staff work day and night to support national trails. Hannah, who takes care of the Thames Path in Oxfordshire, says that they have consistently doubled any match funding that they receive. Despite their hard work year on year, a lack of funding coupled with inflation pressures has caused them to make some difficult decisions, cutting funding for improvement projects, engagement activities, information provision and volunteer programmes to stay afloat. With rising costs, there may soon be nothing left to cut.
A third issue facing national trails is bureaucracy. For work to be carried out adjacent to the River Thames, there is a need for a flood risk activity permit, but there is currently a four-month delay from the EA in issuing these. In addition, for some of the year, such as in winter when the river is flowing fast or in flood, work cannot be carried out, but funding is still given year by year. That leaves an extremely short window for work to be done, if there is any opportunity at all, and funds often cannot be used in time.
Although I have painted a bleak picture so far, some simple changes could improve the future of national trails. I make three recommendations to Government. First, they should support a statutory purpose for national trails, including them in the group with national parks and national landscapes. With a statutory purpose would come the duty to protect and enhance people’s access to the outdoor and to experience the national trails. It would give national trails a proper place in the planning system, and would help to stop the loss of trails to development, as has already happened to the new King Charles III trail. Changes to the national planning policy framework, such as making it clear that changes to national trails require the consent of the Secretary of State, would further protect their status. Automatically, with small cost-free changes, we can better protect national trails for future generations.
Secondly, the Government should invest in national trails properly, or at least restore their funding in line with inflation from the 2013 benchmark. Further, those funding settlements should be made three years long. Thirdly, the Government should communicate with agencies, such as the EA, that have responsibilities that interact with national trails to ensure that they produce assessments in a timely manner and are given the resources that they need to maintain assets, such as the Marsh Lock horse bridge and Benson weir. Without that, national trails are in danger of falling below the quality standard. In 2023, the Disabled Ramblers’ condition monitoring report revealed that nearly 80% of the 50 miles surveyed along the Ridgeway did not meet the established standards.
The Government have previously recognised the vital role that national trails play in rural tourism, promoting the cultural assets of England and the health of the population. With proper funding and support, we can ensure internationally high standards and deliver more for people and nature.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
It is a pleasure to serve under your chairship, Mr Betts. I congratulate the hon. Member for Henley and Thame (Freddie van Mierlo) on securing this debate on an important issue. I recognise his long-standing interest in the Thames Path, which runs through his constituency, and his assiduous representation of his constituents through the long series of parliamentary questions he has tabled since entering this House.
The Government are committed to protecting, enhancing and expanding access to national trails. Let us think of other countries. The Camino de Santiago starts in France and goes through Spain. A friend is currently following one of the long-distance paths in Portugal on a bike, finding out about the hills not shown on the map; the map is two dimensional but there are three dimensions out there. The grand routes in France—such as the GR20, or Grand Route Vingt, which that bisects Corsica—are epic, long-distance, mythical trails that connect us to thousands of years of human history.
Every town and constituency in this country has a Green Lane that was literally a green lane. It is important to protect them, not just for inclusive access for local people and the benefits to tourism, but because they say something important and cultural about the human condition, heritage and history.
We have 16 national trails across England and Wales. As the former MP for Wakefield, I know and dearly love the Pennine Way. We always had a new year’s day walk; we would drag the children out, complaining, and then they would find an animal skull and spend the rest of the walk asking what it was and whether they could put it in their pocket. We showed them the Ladybower reservoir where the Dambusters practised for their assault on Germany. Those are iconic, special places that have a heritage in the hearts of local people whose forefathers and foremothers did the Kinder trespass, coming up from Sheffield and Manchester to assert their right to access those beautiful landscapes.
Before the hon. Member for Strangford (Jim Shannon) leaves, I want to say that in Northern Ireland the national trails are mainly supported by Northern Ireland Government bodies and not the UK national trail funding pot. I like the sound of the Ulster Way and I will look it up next time I am in Magherafelt visiting my uncle.
The Pennine trail up and down the backbone of England offers incredible views over the Peak district and the Yorkshire dales. The South Downs Way runs between Winchester and Beachy Head for more than 100 miles. Those trails are vital public assets that promote wellbeing, health and tourism. It was the previous Labour Government that started work on the vision of an England coastal path, which will be completed under this Government. The King Charles III England Coast Path will be completed next year, an incredible infrastructure achievement.
Richard Foord
The King Charles III coastal path will be an impressive achievement, if we can make it happen. Would the Minister commend the section between Lyme Regis and Sidmouth in my constituency? Would she also pay tribute to the National Trust, which does great work in maintaining our coastal paths?
Mary Creagh
I pay tribute to that section. I have not been to that part of the path but I opened a section of the coastal path in 2011 or 2012, when, sadly, no Minister from the coalition Government could be found to make the journey to Dorset. I was asked as the shadow Secretary of State, and was happy to walk up and down—a lot of up and down—with a pint of foaming ale at the end, which made the visit worthwhile. Achieving these paths requires lots of partners, and the hon. Member rightly mentions the National Trust, which does incredible work in maintaining and protecting the paths through its huge membership support. I was down in Dorset with the National Trust in March, releasing the first wild beaver on the Isle of Purbeck. The National Trust plays an important role in the life of this nation.
When the coastal path is finished, we will have an extraordinary national corridor of access: a 4,750 mile path around England. I have walked certain sections of the Appalachian trail in America, and have heard stories about who goes on these long-distance paths and why. We also have seen the story of “The Salt Path”, which is now subject to some controversy. The Appalachian trail was used by lots of Vietnam veterans as a way of healing; they walked from Georgia to Maine as a way of processing and dealing with the trauma that they had suffered as people who had served their country. Imagine walking 5,000 miles around England! It is lifetime’s work; I do not know whether I will have time to do all of it, but I will certainly have to mark off the bits I have done already.
Since 2009, successive Governments have invested £25.6 million in the planning and establishment of the coastal trail. Successive Governments have recognised the value it will have in connecting communities, landscapes and coastlines, and boosting rural economies. It will be a really important part of rural economic growth. This has never been done before. I remember that, when the Welsh completed their coastal path ahead of us—which was obviously galling—there were articles in The New York Times about it. The path became a tourism destination, with the breathtaking sweep of the Atlantic coast down there. Obviously we have some drier bits, certainly down the east coast, which I know and love dearly—particularly sections around Bridlington and Filey. Coast paths generate a huge amount for local economies. Research has shown that more than £300 million has been spent in local economies by people walking on England coast paths, directly supporting almost 6,000 full-time equivalent jobs.
This Government have backed their commitment to access with action. Since 2022, the Department for Environment, Food and Rural Affairs has invested £2.5 million into the protected landscapes partnership, which brings together the National Landscapes Association, National Parks England, National Trails UK and Natural England. The partnership focuses on enhancing access and ensuring that our trails have a real impact on people, nature and climate.
One of the most innovative projects under the partnership is the coastal wildbelt project, which is being led by National Trails UK. It focuses on the coastal margin adjacent to the England coast path, which amounts to an area the size of Dorset. Our pilots will identify innovative ways to connect the public with this coastal area around the country. They will also identify ways to better drive nature recovery in these places, because once the path is created, access is created, so we will be able protect and restore nature in some hard-to-reach places.
We have also provided around £5.5 million in support to National Trails UK to enable it to continue its vital work of protecting and restoring the trail network. Trail maintenance funding is provided through Natural England, which is responsible for managing those relationships and ensuring that the trails are well cared for.
Dr Roz Savage (South Cotswolds) (LD)
As my hon. Friend the Member for Henley and Thame (Freddie van Mierlo) mentioned, many of the challenges facing our national trails are caused by the impacts of climate change, but at the moment Natural England’s fund for environmental incidents covers only coastal erosion and riverbank erosion. Does the Minister agree that this funding pot must be expanded and increased in line with inflation to cover proper provision for climate impacts such as storm damage and flooding?
Mary Creagh
The hon. Lady raises an excellent point. Making sure we are resilient to a rapidly changing climate with warmer, wetter winters and hotter, dryer summers is important for not just food and water security, but all infrastructure, including our roads and bridges. With the flooding in Tadcaster, we saw what happens when a bridge that connects two parts of a town is knocked out during a flood as well as the huge economic and social consequences that that brings. I will take the hon. Lady’s suggestion back to the Department as we look at business planning for this year.
In the Labour manifesto, we committed to deliver nine new national river walks, one in every region of England. That will open up our riversides to the public in a transformative way, creating new opportunities for recreation, supporting biodiversity and strengthening community access to nature. The walks represent a step forward in our mission to make nature accessible to everyone, improve public health and provide opportunities to engage in the great outdoors.
The new Coast to Coast Path national trail from St Bees to Robin Hood’s Bay—an area I know and love well—will take walkers across some of the most beautiful parts of the north of England, including through three national parks: the Lake District, the Yorkshire Dales and the North York Moors. It will be one to walk from west to east, so that hikers always have the rain on their back—and I can promise that there will be rain.
The new national trail will bring increased access opportunities for recreation and tourism, improving health and wellbeing and increasing spending locally. We already have fantastic rights-of-way networks across England, with 120,000 miles of footpaths, bridleways and byways. On Sunday, I got lost near Crawley and Gatwick airport while looking for a friend’s house on my bike. When we go down the little country roads and trails, the signposts are so important when the sat-nav is out of range.
Let me share a story with the House. As the Minister for the circular economy, I am always looking out for waste and pollution. I saw this big, white polystyrene thing by the side of the road and got off my bike, thinking, “That is absolutely disgraceful—someone’s chucked this huge piece of litter here”. It turned out to be a massive puffball mushroom family. I took it and put it in my bag. Last night, my husband and daughter enjoyed puffball mushroom steaks with a hot chilli sauce; we did a lot of checking to make sure it was not poisonous, but fortunately it is literally the size of a football so we could not really mistake it for anything else.
The hon. Member for Henley and Thame raised three points. On the issue of statutory purposes for national trails, the statutory purposes of protected landscapes have been established and evolved over 75 years. If we were going to make any changes, we would need lots of consultation and evidence gathering. Although trails and protected landscapes are part of the same family, they have different roles and responsibilities. Giving trails statutory purposes may not be the most effective way to support them to achieve their objectives.
A statutory purpose would not, on its own, bring planning protections. Many trails cross through existing protected landscapes and other designations. They are covered by protections for those designations already. As such, we do not at this time believe that additional planning protections for trails are needed to support trails in their mission. Perversely, without robust evidence they could place additional burdens on the teams that manage them, so we could not be certain they would provide the benefits that the hon. Member suggests.
We have, as he said, a constrained fiscal environment. This year, the trails have had additional funding with £3.26 million for access-for-all improvements. I saw when I visited Dartmoor how important that was in giving people with Tramper scooters, which I had not previously come across, access to the amazing landscapes there. I am afraid that the percentage quoted by the hon. Member is inaccurate, but we can give him the correct percentage if he wants it afterwards.
We had also funded National Trails UK. In ’25 to ’26, it received £108,000 in revenue and £150,000 of capital support from partnerships. DEFRA has also allocated £500,000 for national trail reinstatement this year to help reestablish the England coastal path when there was a break in continuity due to erosion.
There has also been movement in the last year on removing bureaucracy at the Environment Agency and I will take the good words from the hon. Member for Henley and Thame back to my colleague. I understand the Thames Path national trail partnership is continuing to work with the Environment Agency to reopen Marsh Lock bridge. The EA has conducted a survey and has options for repair and we will continue to work in partnerships on this issue.
Question put and agreed to.
Neurodivergent People: Employment
(1 day, 13 hours ago)
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Charlotte Cane (Ely and East Cambridgeshire) (LD)
I beg to move,
That this House has considered the matter of supporting neurodivergent people into employment.
It is a pleasure to serve under your chairship, Ms McVey. I am pleased to have secured this debate on an important topic and I want to acknowledge that neurodiversity has a huge range of impacts. Many neurodivergent people need no support with employment, while those with certain learning disabilities need significant support.
Adam Dance (Yeovil) (LD)
Does my hon. Friend agree that the challenges neurodiverse people face with employment often start at school, and that we need universal screening for neurodivergence, alongside proper teacher training, so that our fantastic teaching staff are given the tools and confidence to identify and support all their pupils?
Charlotte Cane
I agree with my hon. Friend that recognising neurodivergence in school and giving support at an early stage is incredibly important. As I said, I want to make the distinction and recognise that neurodivergent people and those with learning disabilities are distinguishable groups, both of which I will speak about.
Over the past year, I have visited many fantastic businesses across my constituency and have been struck by how many are going above and beyond to forge pathways into the world of work for people with learning disabilities. I want to share some of their success stories today.
Clive Jones (Wokingham) (LD)
I thank my hon. Friend for securing this important debate. In Wokingham, the Kimel café does a fantastic job taking on neurodivergent youngsters, giving them key skills and including them in our community. Does my hon. Friend agree that more businesses should employ neurodiverse people? Does she also agree that the Government must do more to support excellent businesses that support neurodiverse people, like the Kimel café?
Charlotte Cane
I do agree and will speak about that.
Local businesses have described employing people with learning disabilities to me as like a game of bureaucratic hopscotch. They can see the end goal but they need to hop from square to square, assessment to assessment, with a lack of resources to dedicate to training staff. Sadly, that is borne out in the data. Under 30% of people with severe or specific learning difficulties were in employment in 2023-24, compared with more than 82% of non-disabled people. Those figures are bad enough in isolation, but just 65% of employees with severe or specific learning difficulties remain in employment for at least a year.
Rachel Gilmour (Tiverton and Minehead) (LD)
Does my hon. Friend agree that Foxes hotel in my constituency of Minehead is a trailblazer? It is the UK’s only fully operating training hotel for young people with learning disabilities, many of whom have Down’s syndrome. It has shown that structured on-the-job training, dedicated mentorship and clear progression pathways not only transform individual lives but drive outstanding business outcomes. It has been described as the Oxbridge of training for such young people.
Charlotte Cane
It is great to hear that example. One thing I am calling for is proper structured apprenticeships.
Afzal Khan (Manchester Rusholme) (Lab)
On the statistics, I agree with the hon. Member that having 30% of autistic people in employment compared with 82% is a huge gap. The Buckland review made clear that without a national campaign to raise awareness among employers, those gaps will persist. Does she agree that the stark gap highlights the urgent need for stronger action to ensure that autistic people have fair access to the labour market?
Charlotte Cane
I thank the hon. Member for his intervention and I agree that we must provide these people with much more guidance and support, and also give them fair access to work and a career.
In addition to the problems that autistic people encounter in finding and staying in employment, the raw pay gaps for people with autism and for people with severe or specific learning difficulties are 28% and 20% respectively. We can see that there is a huge problem. Those people have less than a one in three chance of finding employment. Even if they are among the lucky ones who find employment, they might not make it past their first year anniversary in work and they will be paid less than their colleagues.
Apsana Begum (Poplar and Limehouse) (Ind)
The hon. Member may be aware that prior to my election, I worked in diversity and inclusion, and what she says rings true. Does she agree that job coaching and mentoring is crucial in the workplace? It is crucial for anybody doing any job, but it is incredibly empowering and a supportive tool for those with neurodiversity, particularly in retaining them in the workplace. We can really learn in our country from coaching and mentoring; it is a vital tool for employees.
Charlotte Cane
I agree with the hon. Member that helping people to stay and flourish in employment, once they are in employment, is hugely important.
Samantha Niblett (South Derbyshire) (Lab)
As a proud auntie to Benjamin, who is autistic, I am delighted when I hear of employers who are doing great things for neurodivergent people. A constituent of mine, Ian Carlier, is the chief executive officer of Momentic, which supports people to get off benefits and into self-employed work. Does she agree that when we consider employment for neurodivergent people, giving them a pathway and support into self-employed work might suit them better?
Charlotte Cane
I do not know about self-employment being “better”, but it is certainly important, because different things will work best for different people. Neurodivergent people need the same full choice as non-neurodivergent people.
Steve Yemm (Mansfield) (Lab)
Specifically on that point, it is important to recognise that neurodivergent people, particularly young neurodivergent people, should be treated individually, as the hon. Member has just suggested. In my constituency, West Notts college offers a number of entirely bespoke courses that are specifically designed have that sort of impact. The outcomes from those courses are truly phenomenal and West Notts college deserves our praise for helping so many young people into further education and back into employment. Does the hon. Member agree that a one-size-fits-all approach is really not the best way to get neurodivergent people, and those with special educational needs and disabilities, back into education and employment?
Esther McVey (in the Chair)
Order. May I remind hon. Members that interventions are just that? They are interventions, not short speeches.
Charlotte Cane
I thank the hon. Member for Mansfield (Steve Yemm) for his intervention and I congratulate the college that he mentioned. He is absolutely right—one size fits all does not fit anybody, but particularly not neurodivergent people.
Charlotte Cane
I will make some progress.
Think of the challenges that neurodivergent people can face in everyday life: knowing they are different from others; being unable to read social situations in the same way as others; being uncomfortable travelling on public transport; and, commonly, experiencing anxiety after years of bullying at school. Now imagine what it is like to face what must sometimes feel like insurmountable barriers to one of the most basic parts of everyday life—that is, work.
We know that neurodivergent people want to work. They want to contribute in a positive and meaningful way to our society. In 2021, the National Autistic Society found that 77% of unemployed autistic people wanted to work. Despite that, as we have heard, businesses remain concerned about employing neurodivergent people, often because they fear that they cannot support the employee properly.
Recently, the Recruitment and Employment Confederation told me that neurodivergence is the least understood aspect of equality, diversity and inclusion. As such, learning how recruitment practices and the workplace can be adapted to become more inclusive for neurodivergent individuals is an evolving aspect of good practice. I am really proud today to have the opportunity to celebrate businesses in my constituency that lead the way in supporting people into work. They are shining examples that the Government would do well to learn from. We have already heard about some other examples.
Burwell Print provides experience to adults with additional needs and has done so for over three decades. It prints, folds and collates many of our excellent village magazines, keeping the community in touch with what is going on. It also makes soap and small ceramic gifts. Harry Specters is a luxury chocolate company founded by Mona Shah. She recently received an MBE for her services to training and employment for young people with autism. In 2012, Mona was inspired to launch the business by her autistic son, Ash, and they are proud to have autistic staff involved in every aspect of the business.
We have heard how important school is, and I also have many brilliant specialist schools across my constituency, such as the Highfields academies in Ely and Littleport and the Centre school in Cottenham, where I recently talked to some very confident students about their career ambitions. The nurture and support provided by those schools equips students with the social and intellectual skills to contribute to society.
The businesses I have met have told me of success stories where employees that they have taken on have gone on to thrive in the workplace as a result of someone supporting them. Prospects Trust is a working farm that supports people with additional needs, and it runs Unwrapped, an organic café and shop in Ely. The café has up to four supported co-workers per day, Monday to Saturday, giving people employment, skills and the experience they need to go on and make a successful career. So far, five of its co-workers have gone on to secure employment positions after their placement.
At Harry Specters, one staff member faced difficult circumstances. They struggled in traditional workplace environments, suffered long-term bullying and had retreated into self-employment as a safe space, but that was not sustainable and they were stuck in an abusive, financially dependent relationship. Mona hired them, and they have thrived ever since. They have built the confidence to speak on radio and podcasts and at hosted events. They have moved into their own flat and built an independent, stable life. I want stories like that to become the norm, not the exception.
Unfortunately, businesses are hindered by ongoing problems blighting the Access to Work scheme. I am sure that colleagues will also have heard from constituents about difficulties in accessing payments and reduction in support.
Ms Julie Minns (Carlisle) (Lab)
I thank the hon. Member for agreeing to take an intervention when I spoke with her before the debate. She speaks very eloquently about the frustrations that we see in our constituency surgeries. I had a constituent’s mother come to see me; it had taken six months for Access to Work to be put in place for him to take up a position that he had been offered. Does the hon. Member agree that the new Connect to Work scheme needs to work a lot better for these people than Access to Work has?
Charlotte Cane
Absolutely. It needs to be much faster in doing the assessments and delivering the payments.
One of Mona’s staff experienced a traumatic event that made it difficult to manage work without more regular therapy, so they applied to Access to Work. They were told that they could not be supported because they were already accessing one monthly therapy session, albeit they are paying for that privately and they cannot afford to pay for any more. They face the prospect of having to cancel their vital therapy to apply on the basis that they might get help, and in their own words:
“The message seem to be stop getting the help you need, wait months for a decision, and then maybe we’ll support you.”
Another local business, Red2Green, said the payments are so slow that it is difficult for small organisations to claim the money back, and it gives them huge cashflow problems. I have talked to individuals who have withdrawn from doing this work because they cannot afford to wait over three months before they get paid. Red2Green also told me that some neurodivergent people cannot make phone calls or advocate for themselves, but under the Access to Work scheme, it has to be them who applies, not the employer.
Claire Young (Thornbury and Yate) (LD)
Does my hon. Friend agree it is ironic that, when neurodivergent people commonly experience executive functioning difficulties, applying for Access to Work requires them to have good skills in that area, and people actually need support to access support?
Charlotte Cane
That is absolutely true, and I have seen people trying to deal with filling in the forms. These people are likely to be dyslexic or have similar conditions, so they will inevitably have real trouble with those forms. A scheme designed to grow inclusion and increase support should really do better than that.
I hope the Minister will provide a clear update on what action the Government are taking to clear the backlog and what more can be done to make its responses faster and speed up payments. Specialist apprenticeships, as we have heard, would go a long way to helping neurodivergent people into work, with expert support on a daily basis through their employment. That would provide tailored, individual work plans that take their condition into account, allowing them to get work experience while having space to adapt.
Leigh Ingham
Walton Hall Academy in my constituency, which I visited when I was first elected as an MP, continues to raise the difficulty of getting work experience for its neurodivergent pupils. Does the hon. Member agree that it is as important to support businesses through the work experience process as it is to ensure that people go through to employment? Neurodivergent pupils find it so much more challenging without that.
Charlotte Cane
I thank the hon. Member for those points; I agree entirely. We need to help employers to help these people into work and help them to thrive in work. Will the Minister set out the Government’s position on a wide roll-out of specialist apprenticeships and planned actions to encourage it? The Buckland review recommended that, in order to get some flexibility on the apprenticeship rules, the requirement for an education, health and care plan should be removed, given the difficulties families face in obtaining EHCPs. That recommendation has not yet been accepted by the Government. Will they do so today?
Manuela Perteghella (Stratford-on-Avon) (LD)
It is deeply concerning for my Stratford-on-Avon constituency that young adults over the age of 25 can no longer access NHS-funded ADHD assessments. Does my hon. Friend agree that, at a time when we should be removing barriers to employment, taking away access to such a vital first step is doing exactly the opposite?
Charlotte Cane
We have heard there is a problem with young people being assessed in school; we cannot then cut off the backstop of being assessed in adulthood. Can the Minister update us on the Buckland review’s recommendations and when they intend to publish the conclusions of their expert panel on employment prospects for neurodivergent people? Local businesses have told me that neurodivergent employees find the jobcentre system difficult to navigate, stressful and triggering. What will the Department do to adequately train jobcentre staff in appropriately supporting them?
Finally, many people do not disclose their neurodivergence or learning disability for fear of discrimination. Will the Government commit to reviewing the guidelines on disclosure and whether they adequately consider neurodivergent conditions? Neurodivergent people have so much to offer our businesses, our communities and our economy. We just need to do what my local businesses do: go above and beyond to make this the gold standard. If the Government support businesses to do that, we could unlock a sizeable community full of untapped potential and enthusiasm, which can only be a benefit to our country.
Several hon. Members rose—
Esther McVey (in the Chair)
I remind Members that they should bob if they wish to be called in the debate.
Josh Newbury (Cannock Chase) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I am pleased to have the chance to speak on the importance of supporting neurodivergent people into work. I will focus my remarks in particular on the experiences of autistic people, drawing on the voices of my own constituents and on the work of local organisations in Staffordshire. Since being elected, I have had constituents with autism reach out to my team and me, sharing with us that they find it difficult to get into and stay in work, despite being well qualified. They have spoken candidly with me about the barriers they face, as well as the skills and determination they have and can bring to an employer. Only by hearing directly from autistic people can we get this right.
The statistics remain stark. Only around 28% of autistic adults are in any form of work, compared with more than 80% of non-autistic people. That is not about a lack of ability; it is about the barriers that are in place, and the failure to make adjustments that are both reasonable and achievable.
The evidence tells us that, even with legal protections, too many disabled people and people with neurodivergence encounter managers or decision makers who simply do not believe in non-visible impairments, or who resist making adjustments. That creates mistrust, isolation and ultimately exclusion from work. We need to reduce stigma, but we also need to make it much simpler for employers. Right now many businesses, particularly small ones, simply do not know what adjustments look like in practice, how to put them in place or how to access the funding that exists to help them to do so. If we want employers to be more inclusive, guidance, training and access to support need to be much clearer, consistent and easy to navigate.
There are many positive examples. I recently met with the Staffordshire Adults Autistic Society, which does invaluable work supporting autistic people and their families. On the national stage, the inaugural neurodiversity employers index has highlighted organisations that are showing real leadership in adapting recruitment practices and workplace culture. We know that schemes such as supported internships can provide a pathway into work for young people with special educational needs and disabilities.
However, there are gaps. Supported internships, for example, are only available to those with an education, health and care plan, and many families in Staffordshire have told me how hard it is to secure one due to delays and mismanagement locally—something that we will be debating no doubt at length in this Chamber next Monday. This is not just a moral issue, but an economic one. The brilliant organisation Pro Bono Economics has shown that, by doubling the employment rate of autistic people by 2030, we can deliver up to £1.5 billion in societal benefits each and every year. As has been mentioned already, Sir Robert Buckland’s recent review concluded that to close the employment gap, we need more than just high-level words; we need practical, bottom-up support for employers, including training and long-term programmes such as Access to Work.
Tom Gordon (Harrogate and Knaresborough) (LD)
One of the things that constituents have to come to me with is worries about the proposed changes—which have now been shelved—to personal independence payments. Does the hon. Member agree that the rhetoric and language of Ministers has not helped people to want to go out and seek support to get into work, due their worries about barriers they may face?
Josh Newbury
When we approach things such as welfare reform—this is probably also true of SEND reform—it is always bound to cause anxiety for people. We absolutely have to be mindful of that, particularly in this place, with the rhetoric we use and the way we go out to consult. I am concerned that the hon. Member is picking that up in his constituency; I have certainly had constituents reach out to me with concerns about welfare changes. It is incumbent on all of us to listen to that, to appreciate where the proposals are coming from and to try to find a common ground. We absolutely can do that in this case and in the case of PIP changes.
Above all, for me, this is about fairness. Everybody deserves the dignity of meaningful work, and everyone benefits when talent is not wasted. Autistic people have so much to offer, whether in science, like Einstein, in conservation, like Chris Packham, or in the day-to-day workplaces that keep our communities and economy running. The Government have already taken important steps, creating the independent panel, ensuring that work coaches have access to autism-specific training and providing disability employment advisors to offer specialist guidance, but the real test will be whether those reforms can deliver change on the ground in job centres, interviews and workplaces.
In the shortest line possible, everyone benefits when talent is nurtured, not wasted. My ask is that the insights of the new independent panel are coupled with autism-specific training, so that constituents such as mine and thousands of others across the country can finally see the promises of inclusion turn into the practical support they need to succeed in work.
Esther McVey (in the Chair)
We have quite a lot of Members in the room wishing to speak, so can we keep speeches to a maximum of four minutes?
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Ms McVey. I commend the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) for her passion in this matter. She has done this House credit today and she deserves many accolades for the way that she presented the case.
I wish, as always, to give a Northern Ireland perspective on the matter, which I hope will add to the debate. The issues that the hon. Lady and others have spoken to are replicated in Northern Ireland. Some 5,367 people were recorded as having an autism diagnosis in the 2021 Northern Ireland census, and prevalence in school-aged children is much higher, reaching 5.9% in 2024-25, according to a report by the Department of Health.
Some 70,000 adults may have ADHD in Northern Ireland, according to an April ’25 BBC report citing an ADHD expert. Those figures are relevant and fresh for this debate. The same expert suggests that there are a higher number of undiagnosed adults as well, with 5% of school-aged children estimated to have ADHD, according to Northern Ireland Direct.
It is clear that there is now much more awareness of neurodivergence. That is a good thing; it means that we can help those young people, with their lives ahead of them, to find a job that fulfils them and fulfils the communities in which they live.
There are many fantastic programmes currently in Northern Ireland that do phenomenal work with those who need a different way of training to achieve the right result. One of those is NOW Group, which works with those who need training in a different way to learn their trade. It supports 1,630 people across its services and it is estimated that £1.5 million of disposable income was generated by those in paid work, meaning that every £1 invested in NOW Group generated £21 in social value—again, if we want return for our money, there it is.
However, this issue is about more than money; it is about making sure those young people have the opportunity to do well. Money does not take into account the value of dignity and pride for those who may have struggled to fit in, and now realise that there is still a place for them. That restoration of dignity, pride and confidence for those young people in work is so important. Some 257 people are in paid employment because of the service and there are 70,000 online training sessions. NOW Group is doing truly great work, but the difficulty lies in the fact that it is not funded consistently and is reliant on grants and charitable giving, as well as the goodness of volunteers who have donated 2,000 hours of voluntary service.
As we see the rise in neurodivergent diagnoses, so will the need increase for these groups, which enable young men and young women to find work and self-worth and enable businesses to realise that thinking outside the box and processing in a different way can be a bonus to running a business. The question is how we encourage businesses to see the potential in those young boys and girls.
It is my belief that the Government must pour resources into this in the same way they do for other college and education funds. I look to the Government, and particularly the Minister, to instigate sustained funding for groups such as NOW Group, Usel—Ulster Supported Employment Ltd —and others. What they do for our young people cannot be ignored. We thank them, and we look forward to more work with them in future.
Josh Dean (Hertford and Stortford) (Lab)
It is a pleasure to serve with you in the Chair this afternoon, Ms McVey. I thank the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) for securing this important debate. It is a pleasure to be able to contribute.
In my office we are very open about neurodivergence, and I am proud to work with a neurodiverse team on behalf of our residents in Hertford and Stortford. Without the support and insights of my team, I would not have been able to recognise my own neurodivergence.
In May this year I was diagnosed with ADHD, something that I am learning to navigate alongside my role as an MP and in daily life. When I was first diagnosed, I did not think much of it. I had always known that there was something just a little bit different—with a mum who is a special educational needs co-ordinator, we probably should have realised just a little bit earlier. But as time has passed, I have had the opportunity to reflect on what my diagnosis means for daily life and how it has helped me to answer questions about some of the challenges I encountered in school and work which, until now, seemed to defy explanation.
Why did my mind wander, even in subjects I really enjoyed while I was at school? Why did I feel the need to jump from task to task without finishing or, almost without realising it, to procrastinate when I was approaching something difficult? I felt anxious that I was lazy or stupid, and when I was pulled up on it, I could not explain it. Now, with the right support and medication, the fog that I have unknowingly carried around with me for most of my life has lifted and I can see that I am neither of those things—just a little bit different.
I choose now to speak openly about my experience and how it made me feel, because I hope that it will encourage any young person living with those same anxieties to seek the support that they need to overcome them and because I want them to know that they can be an MP or do whatever else it is they want to do while living with ADHD or any other kind of neurodivergence. Neurodivergent young people—all neurodivergent people—are brimming with talent, but too often the additional support or alternative provisions they need to thrive are lacking. We can see that in the challenges that they experience when seeking employment.
Young people, in particular, face specific barriers to accessing employment, especially in the transition from education to work. Over the summer, I met families, parents and carers across Hertford and Stortford to discuss their experiences of the SEND system. Without straying too far from the topic of the debate, I want to share two things they shared with me that I believe are important.
The first is that early identification, whole-family support and access to the right care, support and educational and social opportunities are essential in paving the way for neurodivergent young people to achieve better outcomes when accessing employment. The second is the need for personalised, long-term support for neurodivergent young people as they make the transition not just from education to employment, but from children’s to adult’s services. Support to stay in employment is crucial too.
I know that the Minister takes these issues seriously, so I would be grateful if he could touch in his response on the work that he and the Department are undertaking, both within the Department and across Government, to ensure that neurodivergent young people can access timely diagnoses and support. On the point about fantastic businesses and charities in our constituencies, will he also tell us how the Government will learn from and support organisations such as Mudlarks in my constituency, which has been working with young people and neurodivergent and learning-disabled people for many years, providing vital and valuable opportunities?
Sarah Dyke (Glastonbury and Somerton) (LD)
It a pleasure to serve with you in the Chair, Ms McVey. I thank my hon. Friend the Member for Ely and East Cambridgeshire (Charlotte Cane) for securing this important and timely debate and for her excellent speech.
As vice-chair of the f40 group, I know how vital fair funding is for education. Today, I want to highlight the importance of supporting neurodivergent people into employment, as not only a moral imperative, but an economic one. We need to harness the unique capabilities of neurodivergent young people, who with the right support and adjustments can and do thrive in the workplace. I would count in that number my own stepdaughter, Madelaine, who is working two jobs while studying at the University of Southampton. The Liberal Democrats are clear: every child with autism, dyslexia and other neurodiverse conditions deserves the chance to thrive in school and move confidently into work.
One of the greatest barriers to neurodivergent young people entering employment is the crisis in our SEND system. It is broken, underfunded and adversarial. In Somerset, that problem is magnified. The average student in Somerset receives over £4,000 less in dedicated schools grant funding than the best-funded authority. The impact of that underfunding is clear: schools cannot provide the early intervention services that children need, and support is limited to only the most complex cases. Families are forced to wait months, sometimes years, for autism assessments and an EHCP.
Like the SEND system, the EHCP process is horribly adversarial, pitting parents, schools and councils against one another. Teachers want to help, but often lack both the training and the resources to provide tailored support. A one-size-fits-all model does not work. Neurodivergent students must be able to attend the right setting post 16 if they are to thrive, build confidence and prepare for meaningful employment.
When young people reach the workplace, barriers remain. James from Glastonbury has autism. He told me of the distinct lack of autism-friendly jobs in our area. He seeks low-skilled, part-time work to support his mental health and build towards his career goal, but such opportunities are scarce. Stephen from Langport shared how his grandchildren were failed by the system. One never received the assessments needed in school, and got a private dyslexia diagnosis only at 16. Stephen himself, a design engineer, worked with colleagues of immense skill who had been underestimated by the education system.
Stephen’s story is a reminder that we are wasting the skills of so many children simply because they do not fit that rigid model. Nationally, only 30% of autistic people are in work, compared with 55% of all disabled people. Autistic graduates are the least likely to be in full-time work. Early intervention hubs in schools are welcome, but they must be properly scaled and resourced. Access to Work must be fixed. Delays and reduced support are undermining inclusion.
The Liberal Democrats are committed to long-term adjustments, reducing waiting times for diagnosis, streamlining NHS processes, training teachers properly and ensuring that SENCOs have the authority and time they need. If we continue to fail neurodivergent children in education, we will fail them in employment. We are not just letting down individuals and families; we are holding back our economy and our society.
Joe Morris (Hexham) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I decided to come along to speak in this debate after meeting my constituent Bryn, who recently won an award for his campaign to raise awareness of autism and learning disabilities. I have reached out to congratulate him on that success, but I also want to put on record how proud I am to represent a constituency that has within it such incredible people, who are championing the neurodivergent experience in the workplace. Having met Bryn previously, and met him again to learn more about the work he is doing, I know that suitable jobs for people with neurodiversity challenges are particularly hard to access in rural areas. That is particularly because of the difficult-to-access bus routes and other poor public transport links, the poor road surfaces and often the potentially precarious nature of employment. Hearing from Bryn directly about his experiences was incredibly informative and moving, and I thank him for giving up some of his time to meet me and share his experiences. I always try to recognise the contributions of my constituents when I am given the opportunity to speak in the House.
I also want to recognise the valuable work of Team Sunflower, an organisation in my constituency that provides integral support for adults with hidden disabilities. It provides its support and expertise to ensure that, with the right assistance available, employees can thrive in the workplace and reach their full potential. It supports a range of talented people, from photographers to dog walkers, some of whom run their own small businesses, while others remain in full-time employment. Through that valuable support, individuals have access to the help they need to navigate working environments.
The hon. Member for Ely and East Cambridgeshire (Charlotte Cane) has brought forward an incredibly important debate, and I genuinely thank her for securing time for it. I represent the largest constituency in England, and I am always reminded of the fact that, for too long, the employment support regime has been far too focused on what works in urban Britain—for people in central Newcastle, central London and central Manchester—and not nearly enough on what works in rural Northumberland. I would like the Minister to reflect a little on how we can make sure our systems work better for those in more sparsely populated areas, such as the Tyne valley, rural Northumberland, the Allen valleys and Longhorsley.
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
I thank my neighbour, my hon. Friend the Member for Ely and East Cambridgeshire (Charlotte Cane), for securing this important debate. I would like to use my time to focus on some of the great work being carried out by organisations in my constituency and to share some of the practical suggestions they have made to me for improving the current system for those organisations and the people they work with.
One organisation that I have had the good fortune to visit, and whose work I have witnessed at first hand, is Switch Now. It is a qualified alternative education and training provider that supports neurodivergent people—whom it refers to as co-workers—into employment and, importantly, helps to keep them there. Switch Now was formed 10 years ago in St Neots and predominantly works with 18 to 35-year-old neurodiverse people. It works through the British Association of Supported Employment model—the BASE model—which sees it collaborate with the local community and partner organisations to find suitable jobs in inclusive workspaces. To do that, it works closely with employers to support them in hiring neurodiverse people and in making the adaptations that make a difference. Sometimes those can be as simple as swapping from analogue to digital clocks in the workplace. That can make a huge difference to the inclusion of some neurodiverse people.
One of the key elements with alternative providers such as Switch Now is how they look at the individual and their needs, and support them in the learning, skills development and work experience required to get into employment or regular voluntary activity—as others have noted, it is important that we do not take a one-size-fits-all approach to training and skills if we are going to support neurodiverse people into work.
Switch Now’s founder, Catherine, says that its model of looking at and securing an individual’s development and training needs means that, when they do gain employment, they are less reliant on social care and benefits in the long term, and can look forward to a more fulfilling future. At present, Switch Now is working with nearly 30 young people, who are given both on and off-site training and gaining work-based qualifications.
However, there are not nearly enough organisations like Switch Now, and there are barriers to these providers. Changes to the post-16 alternative provision framework have meant that organisations such as Switch Now have less direct contact with the young people they wish to help. They now see referrals on paper, and they do not have the opportunity to meet people in person. That is very slow and makes planning quite difficult.
As always with this type of provision, funding is a challenge, particularly when it comes to best practice. However, Switch Now’s long-term success means that, over the past 10 years, 83% of its co-workers have been supported into full-time, part-time or voluntary work, because it uses that person-centred method. I encourage the Minister to reflect on the BASE approach, and on providers such as Switch Now, and to see how levers in the DWP can be used to support those providers and to support individuals into work.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I thank the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) for securing this debate. It is also a pleasure to see so many colleagues from the east of England here. That is not because we have a larger number of more neurodivergent people than anywhere else, but perhaps we care a little bit more.
It is a sad truth that far too many neurodivergent people struggle in the workplace. It is an avoidable problem, one that is unfair and unjust in its own right. More than that, it is economically nonsensical. Better support for neurodivergent people would unlock the potential of millions in this country. The technology and engineering sectors show us the way, and the tremendous impact that neurodivergent people can have.
The Equality Act 2010 places a duty on employers to provide reasonable adjustments for neurodivergent people, but the reality is that these are inconsistent and inadequate. The problem starts at recruitment: traditional methods such as application forms, timed tests and panel interviews disadvantage neurodivergent candidates. Employers should be encouraged to adopt inclusive recruitment methods—for example, allowing the candidate to see the questions in advance.
We heard about the Access to Work scheme, which currently provides vital support, but it is slow, complex and inconsistent. The Government should cast a critical eye over that process and consider how to make it more streamlined.
The problem continues in employment: rigid hours, loud workplaces, obstructive technologies and a lack of written instructions all pose significant barriers to neurodivergent people. Simple steps to address problems such as those could be quick and cheap and could have a significant impact. The Government’s own research shows that most adjustments cost less than £75. Furthermore, proper neurodiversity training for managers and HR professionals would go a long way towards ensuring that those reasonable adjustments were widely understood. Sadly, employers do not know where to start, which is why we need a national framework of best practice, co-produced with neurodivergent people.
Although there is a long way to go, it is good to see the Government making some progress. As the MP for Bury St Edmunds and Stowmarket, I was delighted to see that the Government have allocated £9.5 million to Suffolk county council to provide employment support for 2,700 disabled people. That will certainly help neurodivergent people in our community get into work and stay in work, but there is much more to be done. Making adjustments is not about lowering standards, but about giving people the tools to meet their full potential. Surely that is our duty. Reasonable adjustments must become the norm, not the exception.
Vikki Slade (Mid Dorset and North Poole) (LD)
It is a pleasure to serve with you in the Chair, Ms McVey. I thank my hon. Friend the Member for Ely and East Cambridgeshire (Charlotte Cane) for securing this important debate.
It remains deeply concerning that standard teacher training includes only half a day of autism-specific education. According to a survey by the National Autistic Society, just 14% of secondary school teachers have received more than that minimal exposure. Schools and academies are required to provide five days of professional development every year, so it strikes me as bordering on negligent if at least one of those days is not dedicated to the needs of children and staff who have some form of neurodiversity.
This debate focuses on supporting neurodivergent people into employment, but we have to acknowledge that the journey begins in school. Without adequate support in education, we are setting up neurodivergent people to fail. Society must recognise that people with a range of neurodivergent traits often make exceptional employees. Their unique strengths, sometimes referred to as superpowers, can make them ideal candidates for many roles, including, as in the case of the hon. Member for Hertford and Stortford (Josh Dean), as MPs.
I speak from some personal experience. My son George was diagnosed with autism, ADHD and other neurodivergent conditions at the age of 15. His educational journey was fraught with challenges. Although his nursery, Hoppers, had recognised that he learned differently from other children, subsequent schools failed him until a dedicated special educational needs co-ordinator intervened and helped us reset, and now Philly, his brilliant teacher at Linwood school, is putting him back on the right track. Our experience shows that young people with additional needs often take a winding path, fighting for every step. But as George approaches his 18th birthday, I can confidently say that any employer would be fortunate to have him, just as his current part-time employers, Jackie’s café, and Fab and Nikki at Custom House, already know. His journey is not unique. My inbox is full of pleas from parents to create a system where their children thrive.
Let me be clear: neurodiversity is not a disease; it is a natural and valuable part of the human condition. But our education system, curriculum and the fast pace of modern life often make it harder for neurodivergent individuals to thrive in work and in life. Simple adjustments, such as using coloured paper, changing the lighting or modifying furniture layouts, can make a world of difference in the workplace, the classroom, the supermarket, the cinema and across our world. Such changes not only support people with ADHD or dyslexia, but benefit people for whom English is not a first language, those with physical or learning disabilities and those with anxiety.
Failure to diagnose children early leads to adults feeling isolated, lacking confidence and facing unnecessary barriers. As others have said, only around a third of autistic employees are open about their diagnosis, which is a missed opportunity. With the right support, neurodivergent people thrive in the workplace, but they need the Access to Work scheme to function effectively. The current delays are leaving people without vital adjustments, jeopardising their ability to work. Changes must be made in consultation with neurodivergent and disabled people.
I encourage Members to vote for new clause 2 to the Bus Services (No. 2) Bill tomorrow to allow people with disabilities to access work at any time of the day or night, and not just after 9.30 in the morning. Disabled people need to get to work if they are going to be successful. As the leader of Bournemouth, Christchurch and Poole council I was proud to attend graduation ceremonies for interns in supported internships—young people who had never been given a chance to work. Witnessing their pride and their parents’ joy at their success was truly heartwarming.
Finally, I want to make a point about the future. Historically, autism was a barrier to military service, but that is changing. Even our military is recognising that autistic individuals bring valuable skills such as analytical thinking, attention to detail and technical aptitude. If the military can embrace people with neurodivergence, any business can do so. And we must remember that it is not about accommodating people who are neurodivergent, but making sure they understand that their way of seeing the world is as valid as anyone else’s.
Alex Mayer (Dunstable and Leighton Buzzard) (Lab)
It is a pleasure to serve under your chairmanship, Ms McVey, and I congratulate the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) on securing this debate.
Our workplace, culture and society thrive not when everyone thinks alike, but when talent, creativity and difference are allowed to shine through. There is strength in diversity. Although many debates on neurodiversity understandably focus on those furthest from the labour market, I would like to focus my remarks on those who do work who do not have a learning disability, but who, as society, we absolutely need to support to keep working. The recommendations of the Buckland review were about transforming employer behaviour and workplace design to ensure inclusivity. I often find that people seem to think that that just means a knee-jerk reaction from an employer—“Have some noise-cancelling headphones, and then we are covered”—but it has to be much more than that.
I think that there are a lot more autistic people in the workplace than is suggested by any of the statistics that have been quoted in this debate. King’s College London published research yesterday that said that 89% of autistic adults aged over 40 are living without a diagnosis, so simple tweaks in the workplace could help both those who are diagnosed and those who are undiagnosed. As we have heard in this debate, such tweaks could also help many neurotypical people.
It is particularly important to make job adverts a bit less woolly. That would ensure that every applicant understands what is actually required. Designing the option of quieter spaces with softer lighting can create calmer, healthier and more productive workspaces, and in a modern world where people are popping off to do Zoom and Teams calls all the time, organisations need those quiet spaces for everyone. Flexible hours, remote working and no expectation of going to the pub after work can be much more inclusive all year round.
That is not to minimise the experience of people with autism. I firmly believe that the Equality Act is vital, and potentially more so for women with autism than men, because workplace norms are gendered. A blunt male colleague may be described as being straight-talking, efficient or assertive, whereas a woman in that circumstance is far more often judged to be rude and abrupt. Human resources studies show that women are much more likely to receive criticism about their tone or communication style.
I sometimes worry that our debates focus a bit too much on misery rather than success and happiness—I am not just talking about this debate; I think it is a matter right across this place—and I do not want any child who has received a diagnosis to think that they cannot go on to have a really successful life, so it is really important that we highlight those positive role models. They can be a Lioness. They can be an author. As my hon. Friend the Member for Hertford and Stortford (Josh Dean) pointed out, they can be a politician like him or like me. Many of us grew up watching Chris Packham on “The Really Wild Show”.
These conditions make people who they are—passionate, knowledgeable and observant. In a survey of silicon valley professionals, 30% believed that they may be on the autism spectrum. Some argue that Einstein, Leonardo da Vinci or Mozart were neurodivergent—Elon Musk, too; I am not sure whether he fits anyone’s definition of happiness, but he certainly sees the world in a different way.
Neurodivergent minds can excel to drive innovation. We succeed as a society when we embrace the talents of all. If we all did everything the same, frankly, nothing would change, and I think life would be very, very dull.
Susan Murray (Mid Dunbartonshire) (LD)
It is a pleasure to serve under your chairmanship, Ms McVey, and I thank my hon. Friend the Member for Ely and East Cambridgeshire (Charlotte Cane) for raising this important topic.
As we have heard, if we want to improve employment opportunities for neurodivergent people, we must start in schools. Too many children and young people with special educational needs and disabilities are still waiting for the right support. The system is under strain, and the result is that many are not given the tools they need to thrive. That is why the Lib Dems are calling for significantly more national funding for schools to support children with special educational needs and disabilities across the UK.
Too many schools are being forced to stretch already limited budgets, leaving pupils without the tailored help they need. If we want every child to have a fair start, the resources must be there in every classroom. Change must not be about managing down costs or restricting service access, but about giving children the capacity, training and support to improve their lives. That will save costs by driving down the number of emergencies. But school is only the beginning. The real test is whether neurodivergent people can carry those skills and that confidence into adult life and into work.
Currently, the outcomes are stark. Only around three in 10 autistic adults are in employment, and for people with other forms of neurodivergence, the figures are often equally bleak. That is not because of a lack of ability but because workplaces too often fail to adapt due to lack of experience. Neurodivergent people bring enormous strengths—problem-solving skills, creativity, attention to detail and fresh ways of thinking—yet employers frequently tell us that they are unsure how to provide the right support. Governments across the UK must step up by offering clearer guidance, better training for employers and practical help to make adjustments simple and affordable. The Liberal Democrats believe that we need a national strategy that links education to employment, and ensures that children are supported early, parents are listened to and employers are equipped to provide opportunities.
This issue is about not only fairness but opportunity. Neurodivergent people have waited too long for a system that works. With the right reforms, we can give them the chance not only to learn but, as we have heard, to build fulfilling careers and to contribute fully to our society and economy.
Daisy Cooper (St Albans) (LD)
It is a pleasure to serve under your chairship, Ms McVey. I congratulate my hon. Friend the Member for Ely and East Cambridgeshire (Charlotte Cane) on securing this incredibly important and well-attended debate.
In my years of campaigning for disability rights, I have found that people are very interested in the difference between the medical system and the social system. The medical model sees people as having an impairment, whereas the social model sees the barriers as the disabling factor to people’s lives. One of the things that I have found so fascinating, inspiring and encouraging about this debate is that so many colleagues have identified that it is the very barriers that are disabling to people who are neurodivergent.
We started the debate with a very eager intervention from my hon. Friend the Member for Yeovil (Adam Dance), who made the strong point that this issue starts in schools. I know that he is tabling a ten-minute rule Bill tomorrow to call for universal screening in schools. I hope that the Government take that Bill very seriously. I put on record my admiration for my hon. Friend for speaking with such courage about his own experience of growing up with dyslexia, and for inspiring people young and old by doing so. I also put on record my admiration for the hon. Member for Hertford and Stortford (Josh Dean) for talking about his experiences.
My hon. Friend the Member for Glastonbury and Somerton (Sarah Dyke) spoke passionately about the SEND system. My own area of Hertfordshire is also in the f40—the 40 worst funded councils for special educational needs. We see the barriers that that poses to young people, who have huge potential but cannot reach it because there is not the support in place to help them tackle those barriers.
Throughout the debate we have heard from hon. Members from a number of political parties about the work of their local colleges, self-employment initiatives, job centres, businesses and so many other places that are actively going above and beyond to tackle those disabling barriers. It was wonderful to hear from my hon. Friend the Member for Tiverton and Minehead (Rachel Gilmour) about Foxes hotel in Minehead, which is regarded as the Oxbridge of employing people with neurodiversity.
If one thing that has come out from all hon. Members’ contributions, it is that the Access to Work scheme is anything but; it could be considered the “barriers to work” scheme by many people. The phones and the forms themselves are barriers, but delays are also a huge problem. In answer to a written parliamentary question that I tabled a few months ago, it was revealed that one person had waited 393 days—more than a year—for a response to an Access to Work application. How on earth will an individual get into a job or stay in their job, and how on earth can an employer offer a job with confidence, if it takes that long for the Access to Work scheme to work? I hope that the Minister will answer that question in his response to the debate.
We often hear the saying, “All politics is personal,” and that is more relevant to this debate than to many others. I imagine that many of us who have spoken in or attended the debate are here because our loved ones—our friends, family or relatives—our neighbours, or perhaps we ourselves have experienced neurodiversity. Given the age of many of us in this room, it is possible that some grew up in an age in which they were told that they were stupid and they grew up with the stigma, and they are now form-phobic, because they are still struggling with what they were told.
I hope that what people young and old will have taken from the debate is that we in this House consider those people to have superpowers. We recognise that neurodiversity is about creativity and ingenuity. People see the world in a different way, and their way of looking at the world in a different way actually will help businesses to make different, and better, decisions. On that note, I will finish. There have been a number of questions and suggestions, and I look forward to hearing the Minister’s response.
Mims Davies (East Grinstead and Uckfield) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey, and very good to see the Minister in his place after last week, when there were lots of changes. I thank the hon. Member for Ely and East Cambridgeshire (Charlotte Cane), who gave a brilliant opening speech in this important debate. All Members, across the Chamber, have contributed very strongly. It is always a pleasure for me to speak on behalf of His Majesty’s official Opposition, even though this afternoon I have missed the all-party parliamentary group on dyslexia event to which I had an invitation.
I absolutely agree about the breadth of impact of neurodivergence and the difference between it and learning disability. It was really important to set that out at the start. We are talking about different people with different needs. Like many of us, I have constituents who as parents find that funding issues are difficult, especially in rural areas, so I am very like-minded on better support for SEND. Education is what shapes us. Of course the impact, particularly in my part of the world, of the Government measure affecting small private schools and of choice being taken away from some parents has been very problematic. Many of us will have seen that in our constituency surgeries.
As Conservatives, we believe that no matter what someone’s background and talents are, their full potential should be realised, and neurodiversity as explained today is an amazing way in which difference can truly be harnessed. There have been brilliant speeches showing what real contributions people can make. Neurodivergence should be no barrier to someone’s future, yet unfortunately we have heard about challenges from too many Members today.
I thank those who have related their personal stories today. My yellow notes here remind people about my mild dyslexia—and the amount of cartridges that I go through in my constituency office. I think I have probably saved DWP a lot of money by leaving that Department, where I used a lot of yellow cartridges. But my brother has very severe dyslexia, and we go about things very differently, as people would expect. During the five years that I spent as a DWP Minister in the Conservative Government, it was my absolute privilege to work in that Department of wonderful people, as it was known when I was there—I hope it still is—helping to unlock potential and support people. As we heard today, with the right support and assistance, people can progress and thrive. In fact, this Minister is a great example of progression by being completely persistent and eventually getting his ministerial opportunity. It is great to see him there.
All of us this afternoon have spoken especially about young people, whom we want to see progress and who may face unseen and unrecognised barriers. I am thinking particularly of the covid generation—the young people who are coming through now. Under the Conservatives, people saw a transformation in disability employment, with 2.6 million more disabled people entering work since 2013—a target met five years early. There was the Back to Work plan, with a £2.5 billion price tag on it, to support that next stage; the £64 million for the WorkWell pilot; and the £53 million for universal support. I am very mindful that those are not just numbers: they represent lives changed, independence gained and dignity restored. I am very mindful, as I am sure we all are, that behind every single statistic is a person, a need and a community. We should have their backs and help them.
The Buckland review has been mentioned, of course. I had the pleasure of seeing its launch and the amazing work with the Autistica charity. The review offered 19 practical recommendations to help autistic people to start, stay and succeed in work, and to tackle the fact that around 30% of working-age autistic people are not in work. That is wrong. The supported internships mentioned today are absolutely vital, and the disability action plan—which I had the pleasure of helping to push forward—aims to ensure that the UK is the most accessible country in the world in the realm of work, tackling some of the inequalities faced in employment.
That key partnership between employers and Government, which we have heard about, helps to turn the aspirations and good practice of employers—things that look nice on websites or mindsets that people have—into the ability to support people in the workplace and make it truly inclusive. The DWP itself, and the health model offices, are about looking at it from the point of view of claimants and those who need support—to see it their way. I remember going to one office where the walls and the pillars in the room were painted differently, because neurodivergent people needed to access the room differently. That is the way that our Jobcentre Plus offices should be set up.
I am pleased to be supporting a Disability Confident breakfast in my patch to discuss and engage with the programme of understanding assistive technology and meaningful workplace changes, as we have heard today. It is vital that processes work for changed applications, and that access in technology means people are screened in rather than screened out.
Under Labour, I am afraid the welfare system is growing, and it is vital that those on universal credit, or whose lives are being wasted and potential squandered, are understood and helped. In fact, the Sussex chamber of commerce has been doing some great work in my own backyard with Little Gate Supported Employment, Genius Within and other great local employers such as PVL, Time 24, Thriiver and many others.
Removing barriers is hard for employers in all sectors and of all sizes, so partnership and best practice are vital. As the official Opposition, I offer to work collaboratively with the Minister and employers to help people to get in and stay in work. We in the Opposition will continue to focus on social mobility and life chances. I hope the changes at DWP make the impact that is needed, and I welcome the skills brief being brought into DWP. That is something I worked on and would have loved to have seen it realised.
We have heard about the challenges around Access to Work and the flexible support fund, but with technology and the right attitude, employers can make small changes that make a huge difference. Access to Work needs to be updated, and we recognise that DWP has certain needs in this. With employer adjustments—better training, HR and mindset—all this means that if someone is not the finished article, they can get through the door and become one.
Finally, Ms McVey—I can see you are rightly looking at me—welfare reform and living within our means are vital, because if we are to get back to being productive, to grow and to ensure there is support for those in the welfare system, we need people to be paying in. Sadly, Labour’s unemployment Bill is a concern, smothering employers with more red tape, making it more difficult for our constituents to generate revenue and offer jobs, and making it harder for young people—the ones particularly impacted by the pandemic—to get the start they need.
Labour rightly promised change—we have all seen the change in the last few weeks—and I hope this new opportunity is taken. Our mission in government, which the current Government should share, was to focus on delivery and on the vital outcome of making the UK the best and most accessible place in the world, where the employment needs of people with neurodiversity or other learning need, are met. That way, people can live, work and thrive in this economy.
The Minister for Social Security and Disability (Sir Stephen Timms)
I am delighted to serve with you in the Chair, Ms McVey; you have a long-standing record in this area. I congratulate the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) on securing the debate and the telling points she made in opening. I am grateful to everybody who has contributed to a good debate.
We want to achieve an overall 80% rate of employment, as key to delivering the economic growth and widely shared prosperity we all want. To achieve that, the employment rate among disabled people, those with health impairments and neurodiverse people has to increase. The disability employment gap was first measured in 1998 and fell steadily from then until 2010, when it reached about 30%, but it has been stuck there more or less ever since. It moved around a little bit, down to 28% at one point, but it is pretty much where it was in 2010. That means, as we have rightly been reminded, that many people who have a great deal to contribute and want to work have been denied the opportunity to do so. That needs to change. We specifically need to get the disability employment gap back on to a downward track.
As we have been reminded, the picture is worse still for neurodivergent people. Only 31% of autistic people are in any sort of employment, compared with 55% of disabled people overall. There is a gap within the disability employment gap, to which the Buckland review drew attention. I join my hon. Friends the Members for Dunstable and Leighton Buzzard (Alex Mayer) and for Hertford and Stortford (Josh Dean) and the hon. Member for Mid Dunbartonshire (Susan Murray) in highlighting how big a contribution neurodivergent people are making and can make if they have opportunities and if the barriers holding them back are removed. We need to do much better to deliver the economic growth we need and because good work is good for health and wellbeing.
Like others in the debate, I have made a series of visits to look at initiatives supporting people with learning disabilities into work. It is great to hear so many examples read into the record. Last December, I went to New Warlands farm in Durham, to the North East Autism Society’s vocational training centre. I met autistic adults working on the farm doing interesting things, such as making superb juice from apples grown in the orchard. The farm also had programmes on woodworking and IT.
In April, I visited Little Gate farm near Rye, mentioned by the hon. Member for East Grinstead and Uckfield (Mims Davies) when speaking for the Opposition. I was also impressed by what is happening there. We looked at two social enterprises that equip adults with learning disabilities and autism with skills and pathways into paid work. In June, I visited Northwick Park hospital, which every year recruits autistic people for supported internships, many of whom go on to permanent roles in the NHS. The staff love that impressive programme, which the hospital has been running for years. The hospital chief executive made the point that NHS staff find it extremely rewarding to support the interns and they enjoy that part of the job.
In July, I visited DHL at Heathrow to see how the DHL UK Foundation works alongside charity partners to provide work placements to 16 to 25-year-olds with learning disabilities or autism who are currently out of work. Last month, I went to Yusen Logistics in Wellingborough to see how that global supply chain logistics company is working with Mencap as part of its interns and outcomes programme, giving practical work experience to young people moving from education into employment—a difficult transition as we have rightly been reminded—or on to further study. The colleagues of the person with a learning difficulty I met in Wellingborough emphasised to me both how good he was at his job and, notwithstanding the support he needed, how much they enjoyed working with him.
Tom Gordon
The Minister has outlined a plethora of different places he has visited. I invite him to visit some of the fantastic organisations in my constituency, such as the Artizan café, for people who have learning disabilities and neurodivergence; Horticap, a garden centre with a similar scheme; or Henshaws college in Harrogate. I wish to press the Minister a little. He talks about how these are all fantastic organisations and schemes; many of them are charities and they face an increase in employer national insurance contributions. Will the Minister outline how he might support these fantastic organisations in helping and supporting people with neurodivergence?
Sir Stephen Timms
Unfortunately, I cannot promise to visit all the employers that have been mentioned in the debate, but we certainly want to support them because they are doing a great job. I will say a bit more about what we are doing, and planning to do.
We need evidence for policies to deal with the barriers that neurodivergent people face in getting into work and once they are in the workplace, such as those rightly highlighted by my hon. Friend the Member for Hertford and Stortford. We need evidence to establish and clarify the characteristics of successfully inclusive workplaces.
In January, as has been mentioned, we set up an independent panel of academics with expertise in and lived experience of neurodiversity, led by Professor Amanda Kirby. It is reviewing the evidence on neurodiversity in the workplace to assess why neurodivergent people have poorer experiences and a low employment rate, and what we can do about it. Its advice will also focus specifically on how employers can support neurodivergent people at work, which has rightly been an important theme in the debate. We need practicable strategies for employers that are simple for them to adopt, with low cost or no cost at all.
The panel conclusions will build on the Buckland review of autism employment, which focused specifically on autism. Together with my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), who was the Employment Minister until the weekend, I met Sir Robert Buckland after the election to discuss his valuable contribution to this policy area. I am looking forward to the panel’s findings and recommendations in the coming weeks—I think somebody asked when that would be.
Mims Davies
As well as the expert panel and the updates from the Buckland review, will the Minister undertake to use his good offices in the DWP and across government, including the NHS and other public sector employers, to ensure that the learning is used? As we have heard, it is tough in the wider labour market. Support is already given to care leavers across Government and by the Minister’s own Department; will he lead the way in the DWP?
Sir Stephen Timms
Yes, there are opportunities to do exactly that. We will look at the recommendations from the independent panel along with the results of the “Keep Britain Working” review, which is led by Sir Charlie Mayfield and is investigating how employers can reduce health-related inactivity. We want to bring all this work together to make a real difference. We are expecting the recommendations from Sir Charlie Mayfield in the autumn, so there will be a lot going on this policy area, with opportunities for improvement.
Jim Shannon
I thank the Minister for his response to all the requests we have made collectively and individually. I am very keen to show that we can have an exchange of views and share ideas. In particular, I want us to share some of those ideas with the relevant Minister in Northern Ireland, to ensure that the good things we do there can advise Ministers here, and vice versa. Does the Minister intend to ensure that will happen? If so, I would welcome it.
Sir Stephen Timms
I have had a number of opportunities to speak to my counterpart Minister in Northern Ireland and I am sure there will be more—I have always enjoyed those conversations. I have not yet had the opportunity to visit Northern Ireland but that might also be a possibility.
The new jobs and careers service that we are setting up is a key reform. To echo the points made in the debate, the new service will deliver much more personalised support than has been provided in the past, moving away from the one-size-fits-all, tick-box approach that far too many people think of as characterising Jobcentre Plus. We need to be different from that. The pathfinder we have set up in Wakefield is testing how a personalised offer could be much more responsive to different support needs, including those of neurodivergent people in particular. We are testing how to make the jobcentre environment more accessible for both jobseekers and DWP staff with support needs, including neurodiversity. The findings of the academic panel will also help us to shape the new service.
Our new Connect to Work service, which is being locally commissioned and will cover the whole country by early in the new year, includes a specialist pathway for those with particularly complex barriers, using the IPS—individual placement support—methodology and the supported employment quality framework, which has been overseen by the British Association of Supported Employment, which I think the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) mentioned. There has been close collaboration with BASE in drawing up Connect to Work, which I think will make a big difference over the next few years.
Participants in Connect to Work will be given a dedicated specialist employment support adviser to work alongside them, understand their career goals and help them to address specific barriers to employment. We are taking a very different approach. The methodology is being tightly defined—the IPS and the BASE framework—but the service is being commissioned entirely locally. The decisions about who to involve and which organisations will take part are being made entirely locally by, I think, 42 groups of local authorities around the country. I am hopeful that that increasingly devolved approach will allow us to make substantial progress.
Mims Davies
The Minister is being very generous in giving way. That commissioning model will be music to most constituency MPs’ ears. How will DWP monitor the local output and changes for people on the ground?
Sir Stephen Timms
The hon. Member raises a good point. What we will need to do, and what we are committed to doing, is to publish the outcomes from all 42 different programmes so that everybody can see how they are getting on. I am sure that some areas will do better than others, and where there is a problem, we will be able to provide additional support.
Daisy Cooper
We would all welcome a framework for monitoring the outcomes and the results, but we have heard today that people face many barriers in trying to access these kinds of schemes. Will the Government consider requiring service level agreements, so that when people apply to the schemes or engage with them, they know what they are going to get, how they are going to get it, and how quickly they are going to get it?
Sir Stephen Timms
I need to correct myself: there are 47 areas, rather than 42. It will be for each local area to work out how best to engage people and establish the kind of confidence that is needed. I hope Members will watch closely what happens with Connect to Work, because it is a big opportunity.
A number of Members understandably raised Access to Work. There are problems with Access to Work, reflecting the substantial surge in demand for the scheme over the years—I think last year it went up by 30%, and I think it went up by a larger proportion in the year before and the year before that. We have put well over 100 extra staff on to administering the scheme, to try to get on top of the growing delays and waiting lists, but they have continued to grow, so in the “Pathway to Work” Green Paper, published in March, we consulted on the reform of Access to Work. How can we do a better job, hopefully supporting a larger number of people, and certainly without the lengthy delays that people are suffering at the moment? We have set up a collaboration committee, which includes representatives of disabled people’s organisations, to work with us on the proposals. We are currently working on the consultation responses with that committee, and I look forward to bringing forward proposals for reform before too long.
Tailored support is crucial for young people. There are nearly a million people not in education, work or training, which is more than one in eight of all young people. A significant number of them are almost certainly neurodivergent. Our “Get Britain Working” plan includes the new youth guarantee for 18 to 21-year-olds, to ensure that young people can access quality training, apprenticeships or help to find work, and eight trailblazers are testing localised approaches to support young people, including neurodivergent young people who are likely to face additional barriers and who need further support.
A number of Members rightly reminded us of the crucial role of employers in all this, and we heard some great examples of employers committed to providing support for neurodivergent employees. The Government have a range of support in place for that. My hon. Friend the Member for Cannock Chase (Josh Newbury) was absolutely right to make the point that employers can find it difficult to know what they are supposed to do. It can be quite nerve-racking for conscientious employers who want to do the right thing. Our digital offer is support with employee health and disability, and tailored guidance on supporting employees, including how to effectively support those who are neurodivergent or have learning disabilities. My hon. Friend the Member for Bury St Edmunds and Stowmarket (Peter Prinsley) rightly highlighted the importance of that support.
I hope we are going to see more job carving, whereby an employer takes an existing role and reshapes it to suit the skills of a particular individual. One example that the Department knows of is a firm that had three vacancies for legal secretaries. It wanted to address the under-representation of disabled and neurodivergent people in its workforce, so it created a new support role across the team for tasks that did not require legal expertise, and that role was filled by an applicant with autism. That person did a great job, and other team members said afterwards said that the initiative made them want to stay with the firm. There is an important point here about the support from employees generally for doing the right thing for neurodivergent employees and would-be employees.
The disability confidence scheme that the shadow Minister, the hon. Member for East Grinstead and Uckfield (Mims Davies), referred to encourages employers to create disability inclusive workplaces. I think we can improve it. We need to make the criteria for accreditation more robust, and the Department has been consulting a wide range of stakeholders, organisations and individuals on ideas over the summer. Look out for more on that over the coming months.
In our ambitious programmes of strategic reform—the “Get Britain Working” White Paper, the “Pathways to Work” consultation, the “Keep Britain Working” review and the neurodiversity panel—we are starting to set a new course. We are keen to continue to work across Government—a point rightly raised—as when we jointly provided evidence to the House of Lords special inquiry Committee on the Autism Act 2009 earlier in the year. We all have a part to play—every Department of Government—and I look forward to seeing the report and the recommendations from that Committee on the development of a new strategy later this year.
This subject matters to every single neurodivergent person who has been denied the opportunity to thrive and achieve their best in the past—but it also matters to every one of us, to the whole economy and to our whole society. I hope we see substantial progress in the years to come.
Charlotte Cane
I thank everyone who spoke in the debate. It is good to see that across parties we are all agreed on this issue. We have heard about the many barriers that people face, but we have also heard about some really good employers and opportunities. I welcome the Minister’s commitment to build on the Buckland review and to work with the independent panel to come up with ways to overcome the barriers. I really welcome the personalised jobs and careers support, which can make a huge difference, and I am grateful that the Minister recognises the problems with Access to Work and is trying to address them, but mostly—
Motion lapsed (Standing Order No. 10(6)).
Housing: North Staffordshire
(1 day, 13 hours ago)
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Esther McVey (in the Chair)
I will call Dr Allison Gardner to move the motion and then I will call the Minister to respond. I remind other Members that they can make a speech only with prior permission from both the Member in charge of the debate and the Minister. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
I beg to move,
That this House has considered housing developments in north Staffordshire.
It is a pleasure to serve under your chairship, Ms McVey, and I thank the House for allowing this debate today.
With the publication of three draft local plans across my constituency, this is an incredibly timely debate. Too many of my constituents know the struggle of finding suitable affordable housing. Families need high-quality homes in which to raise their children, young people starting out need affordable homes, and many people need accessible bungalows. I understand our Government’s targets for house building and the three draft local plans for my constituency deliver on that commitment. My constituents deserve to have a home to call their own and I back every effort to support local people into good homes.
Jim Shannon (Strangford) (DUP)
I spoke to the hon. Lady beforehand and I congratulate her on securing this debate. Does she agree that housing for over-55s, with smaller units, must also be a priority, in order to free up larger homes for younger families, and that every local authority should consider the inclusion of such units when housing developments are being built?
Dr Gardner
I agree with the hon. Member: we are an ageing population and need to think about how we house our older residents. I am a big advocate of bungalows, having just moved into one.
That is not to say that proposals for new housing developments come without challenges. In Barlaston, the local community are trying to resist a planning application on green-belt land off Barlaston Old Road. The local parish council has proactively produced its own neighbourhood plan and is not against developments. It is offering suitable alternatives that will deliver more housing and address local issues regarding abandoned land. I hope that Stafford borough council engages meaningfully with the parish council and works to protect the integrity of the village while supporting new housing. Does the Minister agree that parish councils have a strong role to play in planning—indeed, increasingly so, as we proceed with devolution? The local voice must be empowered and heard.
Similarly, my constituents in Lightwood are concerned about the draft proposal to build up to 3,000 new homes in a neighbouring valley. A development of such size would create a whole new electoral ward. Although this proposal is in the very early stages of the local plan, should it proceed, it would have a significant impact on the surrounding communities. Residents are rightly worried about the scale of the development, the loss of green space and the strain on local infrastructure.
Leigh Ingham (Stafford) (Lab)
It cannot be denied that we are in the worst housing crisis since world war two. I thank the Minister for his engagement; we have previously discussed this issue in relation to my constituency of Stafford, Eccleshall and the villages. We need housing, but the village of Loggerheads, right in the north of my constituency, has been left in chaos due to large-scale housing developments that were allowed under previous Administrations, but put forward and built without the proper supporting infrastructure. Does my hon. Friend and constituency neighbour agree that while we desperately need housing—particularly bungalows—it cannot be delivered in the Conservative way, where there are houses but no infrastructure, and residents are left in limbo?
Dr Gardner
I wholeheartedly agree with my hon. Friend’s points.
The land I mentioned also contains a large quarry full of valuable reserves of Etruria marl. A major concern of mine with new developments is the impact on transport infrastructure. Access roads in Lightwood are minimal: one connects to a route already beset by traffic and speeding, while the other country lanes cannot safely accommodate significant traffic.
I have seen that in villages throughout my constituency, where villages are cut in half by major roads but not given safe crossings and speed restrictions. In Tittensor, villagers have been campaigning for over 30 years for a crossing, and in Draycott in the Moors, a large development and an industrial estate brought promises of high-quality traffic management measures that were watered down to a final proposal that will be incredibly disruptive to residents.
Reform-led Staffordshire county council has not supported my attempts to deliver safer roads, and the separation of responsibility between National Highways and the planning authority makes it an exceptionally difficult issue to solve. I ask the Minister, when responsibilities sit between multiple authorities, how can we ensure that the wider impact of developments on surrounding roads is properly considered, with co-ordinated action to support affected communities?
On a similar note, within the village of Tean, developments have led to an increase in flooding and sewage outflow. Developers tend to meet their requirements to build suitable infrastructure and flood mitigations on site, but the problem occurs when the outflow from the estates hits the water company’s mains, which have often not been updated to cope with increased demand. We then see flooding throughout the village and sewage outflow killing our rivers and streams.
Although water companies are consulted, they often put the onus on the developer to address increased demand. As far as I understand, there is no statutory requirement on water companies—in my case, Severn Trent Water—to upgrade their infrastructure to meet new demand. Without that, I question whether consulting water companies is anything more than a tick-box exercise. I ask the Minister, what powers can we enact to ensure that new developments are supported by upgrading main sewer systems, the responsibility for which lies with the water companies to deliver at their cost?
Many of my Lightwood constituents are concerned that the draft local plan does not make sufficient use of brownfield land. I reassure them that Stoke-on-Trent city council is doing the most building on brownfield sites on record. In my time as a local councillor, I had many battles with developers and the local council over proposed developments. That is not to say that I do not support new housing, nor that I always support residents’ objections, but I am a fierce advocate of green spaces and a built environment that support health and wellbeing.
That applies equally to our urban areas, which also deserve green spaces; in the push for brownfield redevelopment, I do not wish to see our urban areas concreted over. Innovative thinking and the use of existing buildings is therefore welcome. I commend plans to improve urban centres with thoughtful developments, such as the Tams building in Longton, and to increase housing in our town centres, utilising empty buildings and the upper floors of shops.
David Williams (Stoke-on-Trent North) (Lab)
My hon. Friend is right to mention historic and heritage buildings. Across Stoke-on-Trent we have many such buildings that have been left vacant for far too long. With the right support and partnerships, they can be brought back into use. Although Stoke-on-Trent city council is rightly taking a brownfield-first approach to development, as she rightly said, does she agree that unlocking those heritage assets is a central part of our ambition to deliver homes for families across our area?
Dr Gardner
I commend my hon. Friend for his hard work on transforming our heritage buildings. Many of those buildings are owned by private landlords who neglect them and they are an eyesore in our towns.
Indeed, in Longton we have had several fires in buildings that have not been properly maintained. While I welcome the high street rental auctions, many of those buildings are not fit for use in their current state. I understand that councils have several powers to take ownership of derelict buildings on our high streets, but I am told that the funds required and the time it takes to hold property owners to account is often prohibitive. I ask the Minister, what additional powers and resources can we give to local authorities to address empty and derelict properties in town centres, hold property owners to account and repossess empty town centre buildings if needed?
I acknowledge, though, that reutilising inner urban areas may not meet the full demand for housing and that such areas may not always be accessible for our ageing population. We need large developments in some places, but the new designation of grey-belt land has caused confusion. To many of my constituents, the area in the Lightwood proposal is not grey-belt land; it is the countryside. While much of the land is agricultural, it is a rich area with newts, bats and badgers. In redesignating the land as grey belt, I ask the Minister for greater clarification on the meaning of green and grey-belt land, and whether that extends to areas that have agricultural-grade land and minimal built spaces.
In such cases, we must consider the delivery of suitable infrastructure, and if a community must be enlarged, we can offer benefits that improve the lives of everyone in the area. For example, in Yarnfield, which has several proposed sites in the local plan, villagers have been in a long battle to gain ownership of their local pub. The owners, Stonegate, seem to prefer to keep a decaying building up for sale rather than allow the village to revive it. I would greatly appreciate an update on the status of the community right to buy, which was announced in the English Devolution and Community Empowerment Bill, and further clarification as to how it can support my constituents in Yarnfield.
We must not allow communities to lose their heart and soul. Big developments must not be swathes of housing estates; they must be communities with the right social infrastructure, including pubs, shops and public services. The Home Builders Federation estimates that local authorities in England and Wales held more than £6 billion in unspent section 106 moneys and nearly £2 billion from the community infrastructure levy in 2024. It also estimates that over £800 million provided by developers for affordable housing is held in local authority bank accounts. That is unacceptable when so many constituents are fighting for the correct infrastructure for their communities, yet the money is available. I therefore ask the Minister how we can ensure that section 106 moneys are utilised in a timely and local manner.
We must ensure that councils are sufficiently resourced to carry out enforcement against developers not meeting their required duties. My constituent, Dennis Rothwell, has fought a constant battle against dust pollution from nearby development in Trentham Fields, and residents in Broadway have been reduced to tears of frustration at noise and dust. However, councils cannot hold developers to account without sufficient resource. There is a national shortage of planning enforcement officers, and that needs urgent attention.
In addition, although councils have a statutory duty to investigate breaches of planning law, there is no statutory duty to enforce against breaches. I suggest considering a process similar to the decriminalisation of parking enforcement to ensure that there is an impetus for councils to act on planning breaches. In so doing, council sanctions would accrue money that could then be repurposed for our communities. I ask the Minister to consider the merits of introducing statutory ringfenced funding at the local authority level to pay for planning enforcement and a refreshed approach to planning enforcement.
Developers must also be held to account when building affordable and accessible houses, but that must not come at the cost of quality infrastructure, green spaces and community character. Building is not just about meeting metrics; it is about delivering real improvements to new and existing residents and invoking a sense of civic pride with good-quality and diverse homes in good-quality communities.
The Minister for Housing and Planning (Matthew Pennycook)
It is a pleasure to serve with you in the Chair, Ms McVey. I congratulate my hon. Friend the Member for Stoke-on-Trent South (Dr Gardner) on securing the debate and commend her for managing to fit a phenomenal number of issues into that very brief speech.
In general terms, I can assure my hon. Friend that the Government want to see more plan-led development and want development generally to provide all the infrastructure, amenities and services necessary to sustain thriving communities. While there is much more to be done, I trust that she recognises that the Government have already taken decisive steps to deliver on those objectives.
My hon. Friend will appreciate that I am unable to comment on individual local development plans or individual planning applications in her constituency due to the role of Housing, Communities and Local Government Ministers in the planning system, but I will seek to respond to as many of the general points that she raised as I can. If there are any that I am unable to cover in the time that I have, I will happily write to her with further detail.
I very much welcome the fact that the local planning authorities that cover parts of my hon. Friend’s constituency are all taking forward draft local plans. It is really important that local plans are put in place, and at speed. Having an up-to-date local plan, or, where one is not in place, ensuring that one is brought forward quickly, is the best way for a community to shape the development required in its area. Where local plans are not up to date or in place, there is a detrimental impact on individuals and communities. We really need to drive that point home: it is not cost-free to not have a local plan in place.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms McVey. I commend to the Minister the draft local plan in Stoke-on-Trent, which is very bold. It recognises that there is an acute waiting list for housing in Stoke-on-Trent, and that we need to build the houses that we need for local people, so that generations of families can live there. The council is taking some tough decisions and building on pieces of land that residents would not ordinarily want built on, but that is one of the trade-offs for having a growing city.
The Minister and I spoke about an urban development corporation covering Hanley, in Stoke-on-Trent, to allow land assembly in order to bring derelict brownfield sites back into use and build the homes that we need. Is that a conversation that we can pick up again? The opportunity is there with the local plan, but it just might need a shove from the centre to help get it over the line.
Matthew Pennycook
I thank my hon. Friend for that intervention. I am more than happy to pick up that conversation and see where we have got to. For the reasons I have already given, I will not be able to comment on the local plan in question, but suffice it to say that we have a local plan-led planning system, and such a system operates effectively only if coverage of up-to-date local plans is extensive.
My hon. Friends will no doubt be aware that the Government inherited a system in which less than a third of local plans were up to date. We have taken decisive steps to progress towards our ambition of universal local plan coverage, both by providing local planning authorities that are striving to do the right thing with financial support and by intervening where necessary to drive local plans to adoption as quickly as possible. We are also introducing a faster and clearer process for preparing local plans, which will set a clear expectation that local plans—as well as minerals and waste plans, it should be said—should be routinely prepared and adopted within 30 months. Other aspects of the reforms—such as the introduction of gateways; shorter, simpler and standardised content focused on the core principles of plan making; and a series of digital transformation initiatives—will support that aim.
I very much commend the efforts being made in the area in question to get the local plan in place. As I said, where local plans are not up to date, and where LPAs are not delivering in line with the needs of their communities, areas are open to speculative development. It is right that, in those circumstances, development comes forward outside of plans—the homes our country needs cannot be put on hold—but we have made it clear that that is not a route to poor-quality housing, and we have added new safeguards to the presumption in the national planning policy framework in order to ensure that.
It must also be said that the absence of an up-to-date local plan does not remove the need for local planning authorities to consider the use of conditions or planning obligations to make otherwise unacceptable developments acceptable. That can include the provision of necessary site-specific infrastructure at appropriate trigger points in development. Local planning authorities already have enforcement powers to ensure compliance with such provisions.
My hon. Friend the Member for Stoke-on-Trent South mentioned a number of issues in relation to brownfield development—development on previously developed land—as well as green-belt development. It should be said at the outset that, like all Governments over the last few decades, this Government have a brownfield-first approach to development. We want, in all cases, local authorities to exhaust their options for brownfield development. Indeed, we are making that easier: we made changes to the NPPF in December, and we have consulted on what we call a brownfield passport—essentially a means of making sure that, when applications on brownfield land are suitable, the default answer should be a straightforward yes.
David Williams
We have certainly talked about the brownfield-first approach being taken. As I alluded to earlier, one of the issues in Stoke-on-Trent is that we have a number of historic and heritage buildings lying dormant. I encourage the Minister to talk across Departments about how we could create a heritage building release fund, similar to the brownfield land release fund. Those buildings are at the centre of our towns and communities, but at the moment they tend to fall down on value for money.
Matthew Pennycook
I will happily take that conversation up with colleagues in other Departments, and I am happy to write to my hon. Friend about heritage policy in the planning system more generally if he would find that useful.
The point needs to be made, and it needs to be made again and again, that there is not enough brownfield land on registers—and certainly not enough viable sites in the right locations—to meet the demand for homes across the country. That is why we have taken a different approach to the green belt. We are committed to preserving green belts, which have served England’s towns and cities well over recent decades, not least in checking the unrestricted sprawl of large built-up areas and preventing neighbourhoods from merging into one another. We have acted quickly to replace the haphazard approach taken by the previous Government to green-belt designation and release with a more strategic and targeted approach.
I emphasise that Ministers do not themselves determine what, if any, grey-belt land is released in any given local planning authority area. It is for the local planning authority itself to determine whether exceptional circumstances exist that justify doing so. In those instances, we expect it first to demonstrate that it has examined fully all other reasonable options for meeting identified need for development, including making as much use as possible of suitable brownfield sites and underutilised land, optimising the density of development—a number of local authorities across the country are looking again at brownfield sites and exploring whether they can get additional density to make up housing numbers—and working with neighbouring authorities to assess whether identified need might be sensibly accommodated across borough boundaries.
Where those options have been exhausted, we expect local authorities to look again at green-belt land release. National policy makes it clear that, in those circumstances, local development plans must take a sequential approach: first exhaust previously developed land, then consider low-quality grey-belt land that is not previously developed, and only then consider other green-belt locations. Under our revised approach, the sustainability of green-belt sites must also be prioritised, and local planning authorities must pay particular attention to transport connections when considering whether grey belt is sustainably located.
Leigh Ingham
The Minister and I discussed this issue just prior to the recess, particularly in relation to Eccleshall, where greenfield sites with really poor transport infrastructure, as well as poor sewage and water infrastructure, are being proposed for development. I gently remind him that we were going to meet this month or early next month to discuss that further. It would be great to have that meeting put in the diary as soon as possible.
Matthew Pennycook
I am looking forward to that meeting. The relevant diary slots have moved around on several occasions, but I will ensure that it takes place in the very near future. We can discuss that and other issues.
Because we recognise the value that communities place on green-belt land, we have taken steps to ensure that any necessary development on it must deliver high levels of affordable housing; the provision of new green spaces, or improvements to existing green spaces, that are accessible to the public; and necessary improvements to local or national infrastructure. Our new golden rules, which are the mechanism by which we will deliver that public gain, will apply where a major housing development is proposed on green-belt land, released either through plan making or subject to a planning application.
Matthew Pennycook
I will make this the final intervention; otherwise, I will not be able to cover all of the many topics that were raised.
Gareth Snell
While the Minister is talking about green-belt land, I want to talk about the Stoke-on-Trent local plan. Berryhill Fields in my constituency has been given a reprieve from previous Conservative plans to build. Other green spaces in Stoke-on-Trent could be protected if there was a way of passporting the Homes England compulsory purchase powers to local authorities so that they could do land assembly in built-up urban areas where landowners who have no interest in building houses in the city are sitting on great swathes of land, which are just causing nuisance and antisocial behaviour. That would help with housebuilding, but also with urban and economic regeneration. If the Minister looked at that, Stoke-on-Trent would probably be up for being a pilot area and seeing what could be done.
Matthew Pennycook
It is probably worth me writing to my hon. Friend. The Government have undertaken a number of reforms—building, it has to be said, on reforms made by the previous Government in the last Parliament—to compulsory purchase powers. Some of those powers are novel; not many places, if any, have tried some of the new powers that I have brought into force. We are very encouraging of any local authorities that want to explore them. Let me set them out in writing to my hon. Friend so that he has the full detail.
In the time left, I want to address a couple of other issues that were raised, starting with infrastructure provision. As my hon. Friend the Member for Stoke-on-Trent South made clear, communities across the country want to see infrastructure delivered as early in the development process as possible rather than as an afterthought. The provision of infrastructure is incredibly important. The NPPF sets out that the purpose of the planning system is to contribute to the achievement of sustainable development, including the provision of supporting infrastructure in a sustainable manner. The revised NPPF we published last year also supports the increased provision and modernisation of various types of public infrastructure.
Planning practice guidance recommends that, when preparing a local plan, local planning authorities use available evidence of infrastructure requirements to prepare what is known as an infrastructure funding statement. Such statements can be used to demonstrate the delivery of infrastructure through the plan period. There is already detailed guidance and an infrastructure funding statement template on the planning advisory service website. However, the chief planner has written to local planning authorities to remind them of their statutory duty to prepare and publish an infrastructure funding statement where they receive developer contributions via section 106 or community infrastructure levy.
As my hon. Friend the Member for Stoke-on-Trent South knows, the Government also provide financial support for essential infrastructure in areas of greatest housing demand through land and infrastructure funding programmes, such as the housing infrastructure fund. The Government are also committed to strengthening the existing system of developer contributions to ensure that new developments provide necessary affordable homes and infrastructure. We will set out further details on that specific point in due course.
My hon. Friend mentioned the issue of section 106 moneys. While there is a variety of entirely legitimate reasons why local planning authorities may be holding unspent developer contributions, including to facilitate the effective delivery of phased development projects, we recognise the need to ensure that the contributions that developers make to mitigate the impact of development and make it acceptable in planning terms are used effectively and in a timely manner. Local planning authorities are expected to use all the funding received by way of planning obligations. Individual agreements should normally include clauses stating when and how the funds will be used and allow for their return after an agreed period of time where they are not.
The planning advisory service, funded by my Department, provides support to local planning authorities in the governance of developer contributions. Any local planning authority that receives a contribution from development through section 106 planning obligations must prepare and publish an infrastructure funding statement at least annually. Reporting on developer contributions helps local communities and developers see how contributions have been spent—and, in some circumstances, underspent—and what future funds will be spent on, ensuring a transparent and accountable system. I know from my own constituency, and I hear from many hon. Members, that what communities want is transparency about where those funds go and certainty that they are being spent on the right mitigations to ensure that development is made acceptable. As I said, we will bring forward further reforms to strengthen the section 106 system so that councils are better placed to strike those agreements and ensure that developers are held to the commitments they make.
My hon. Friend raised a number of other issues, including empty homes. I am more than happy to write to her on them. Community right to buy is not my responsibility as a Minister, but I will get the appropriate Minister in my Department to provide her with an update. She rightly mentioned the provisions in the English Devolution and Community Empowerment Bill, which recently had its Second Reading.
I commend my hon. Friend for securing this debate and other hon. Members for taking part. There is clearly a shared set of issues among a set of colleagues that needs addressing. I am more than happy to pick up conversations, and to meet them as a group rather than individually if that is useful, since some common concerns have been raised. I thank my hon. Friend for the clarity with which she expressed the concerns of her constituents and the points that she made.
I emphasise once again that the Government are in complete agreement with my hon. Friend on the importance of plan-led development that provides the necessary infrastructure, amenities and services that communities want. If they get those things—this will not be the case for all her constituents, as it is not the case for all of mine, but it will be true in lots of cases—and we ensure that we get better development as well as more development, that will be a way to assuage some of the concerns that communities have about what housebuilding in their area means. I look forward to continuing to engage with her to ensure that the changes the Government have already made, along with those to come, of which there are many, are of lasting benefit to her constituents as well to as others in the region.
Question put and agreed to.
Free-to-air Broadcasting: Cricket Participation
(1 day, 13 hours ago)
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Max Wilkinson (Cheltenham) (LD)
I beg to move,
That this House has considered the impact of free to air broadcasting on cricket participation.
It is an honour to serve under your chairship, Ms McVey. I don’t like cricket—I love it. How could I not love a sport that has given me the joy of the 2005 Ashes series, an England victory in the 2019 world cup and so many long afternoons in the sunshine, sometimes with whites on, sometimes with a real ale in my hand, and sometimes both at the same time? It is a sport that reminds us of patience, perseverance, heritage and tradition, and—rare in a world now dominated by doom scrolling and a 24/7 news cycle—the virtue of delayed gratification.
The English cricket calendar, however, has undergone a major change in my lifetime, particularly in the last few years. The season is now crowded, in large part due to the introduction of the Hundred: a competition focused on the search for a format that would work for that elusive thing, a new audience. We, of course, all applaud the England and Wales Cricket Board for searching for that audience.
At the outset I should state that I am open-minded about different forms of cricket. I enjoy all of it, but it is very strange that we have so many different formats in this country: five days for a test match, four days for the county championship, a 50-over competition, a 20-over competition, and now the Hundred, a new 100-ball contest run to a completely different pattern of play and contested by new franchises with which few long-standing cricket fans have any affinity. But it has brought new people in to follow the game—younger people.
Gideon Amos (Taunton and Wellington) (LD)
I congratulate my hon. Friend on securing this debate. On the T20, will he take a moment to congratulate Somerset county cricket club for reaching the finals—I heard the cheering from my garden at the weekend—and will he recognise that county cricket needs all the support it can get?
Max Wilkinson
Yes, I will congratulate Somerset. As a Gloucestershire fan, I can tell the room that I was a member at Somerset as a student. It was an excellent deal, and we used to travel from Weston-super-Mare to sit in the ground at Taunton. I spent many fun days there. It is a pity that Somerset triumphed over Gloucestershire this summer, but we will have to look past that.
Let us start with the good news about the Hundred. Although the debate is sometimes shrill and the suggestion is that it has been a total disaster, there have been some good points to the Hundred. It is pretty much the only high-profile cricket available on traditional free-to-air television, although some of the one-day internationals are on free to air too. The model has undeniably helped to fund the wider sport with new income. It has promoted the women’s game and there is more income for disabled cricket as well. The sale of franchises has brought new investment, which has been shared among the traditional counties. That success is to be welcomed, but it has not come without cost—I know that cost is acknowledged in the sport.
Even as somebody who is open-minded, I feel somewhat alienated by the Hundred. There is no team competing in the Hundred that represents my town, my county, or indeed the entire west region. For those who have suggested that the Welsh Fire is the west’s team, I beg to differ. I suspect Welsh cricket fans will be pleased to hear me say that I am not going to attend Sophia Gardens to support the Welsh Fire any time soon.
The creation of the Hundred means four-day county cricket has been pushed to the peripheries of the season, with August reserved for the short form of the game, although this year the amazing end to the final England-India test did just creep into the start of August, into the summer holiday period. As a knock-on effect, it is argued by many in the game that time and player availability for county championship cricket, which is crucial for test match preparation, has been greatly cut back. It is worrying to see the bedrock of the sport being pushed to the margins in that way. The fans who attend their county grounds and many of those involved in the administration of cricket at all levels could be forgiven for feeling overlooked and ignored. I have heard from many of those people.
What of the impact on the choices forced on test match players who deserve opportunities for time in the middle? What about the impact on the One-Day cup, which will never gather as much attention in August as the Hundred, despite serving up some absolutely brilliant cricket?
Charlie Dewhirst (Bridlington and The Wolds) (Con)
I thank the hon. Gentleman for securing this debate. Does he agree that another problem with the lack of four-day county cricket during the August period is that it is pushed to the margins, which impacts on batting development for future test players, as they are playing in the colder conditions of the early season, and inhibits the development of spin bowlers, who struggle at that time of year? We are perhaps inhibiting some player development in both batting and bowling for our future test stars.
Max Wilkinson
The hon. Gentleman makes some really good points that have been rehearsed by cricket commentators over the last few years. I believe we have to bear that point in mind, and I may come on to it a little later.
It is no secret that this jumble of the calendar has profound consequences. As I said at the beginning, the ECB is doing the right thing by looking for new audiences, increased participation and more cricket on television. It might argue that participation is increasing as a result of the Hundred and the investment brought about by deals with subscription channels for test matches and other forms of cricket. Indeed, there is clear evidence that watching sport leads to increased participation and more money flowing into the game. The ECB reported a 61% increase in amateur cricket club membership following England’s victory at the 2019 world cup. Sadly, however, these days only a handful of free-to-air cricket matches are available each year in the traditional media, and county club cricket takes a variable approach to broadcast.
We should consider the wider consequences of the situation. It is a jumbled calendar with multiple different formats that are confusing to many and a lack of free-to-air broadcast. That cumulative impact risks alienating existing fans while reducing the number of younger people engaging with different forms of the game that are not the short-form Hundred, and making it harder for our test team to thrive. It also puts at risk the long-term sustainability of the county game.
Peter Matthews, chair of Gloucestershire county cricket club, told me:
“Cricket needs to be played at a time when the next generation can be encouraged to go. If this isn’t the case, it will continue to be watched by retired folk and will not grow a new audience. This means that weekends and school holidays are important. Right now, there is very little county cricket in the school holidays, other than ‘The Hundred’ (only at eight venues) and the One Day Cup. Non-hosts have a total of four days home cricket at the height of summer. This cannot be helpful commercially or for developing the next generation of cricket lovers.”
That is a warning from the chair of a club that is doing a lot of good work with the ECB to make cricket more accessible for all through the Gloucestershire cricket talent pathway.
That warning comes as state school cricket continues to suffer decline, bringing about the opposite of the ECB’s aim to increase participation. Peter also told me about the difficulties presented to those counties that retain much-loved out-ground festivals. The Cheltenham cricket festival is the world’s longest-running out-ground festival, having started in 1872. These out-ground festivals bring cricket closer to communities and should be encouraged, but they risk falling victim to ever-higher running costs and an overcrowded cricket calendar.
The Liberal Democrats believe in giving sport back to the fans, which is why we are calling on the Government, the ECB and others to act. We favour taking the more televised fixtures out from behind paywalls. We favour boosting participation by investing in grassroots facilities—I know the ECB is doing that with new indoor domes. We favour supporting community sports clubs too. While the Government clearly cannot interfere in the governance of sport, and I am not suggesting that they should, the nation’s shared interest in cricket should provide Ministers and Members with an important opportunity to engages with the ECB and all others in cricket authority about options that lower barriers to participation, including discussions about the cricket calendar.
Finally, we should consider whether the apparent commercial success of the Hundred might have been achieved by other means. Could the T20 Blast have been adapted to bring new revenues and audiences? Will it be adapted like that in future? Could the Blast and the Hundred be combined or tweaked in a way that protects the traditional forms of the game while retaining new audiences, perhaps with some cricket broadcast via a free-to-air model? The Hundred came about after a well-meaning discussion about participation and audiences, but the challenges that cricket faces as a sport are nothing new. As David “Bumble” Lloyd recently told the excellent “Sports Agents” podcast,
“the game has been dying since I started in 1963.”
That game has constantly adapted to survive. Those with longer memories will recall the fierce debate when limited-overs cricket was introduced in the first place, but at least those formats took the existing pattern of play, making it easier for fans of traditional cricket to understand what was going on. If we can properly balance the cricketing schedule to bring county cricket back into focus, the game can protect its local links and cricket will continue to thrive. We must ask whether the long-term prosperity of the game, the counties and the England team is best served by the continuation of the Hundred in its current form—that is, distinct from the continuation of the Hundred at all.
As part of the discussion we must of course focus on the test game, or we put at risk exactly the sort of moments that cricket fans cherish the most: Shane Warne’s ball of the century, Graham Thorpe batting in the dark in Karachi, the heroics of Chris Woakes coming out to bat with one arm in a sling, the 2019 Headingley test match and my favourite, the 2005 Ashes series—I was there for the day when we won at the Oval. Without those kind of moments, cricket ceases to be the special game it is.
Navendu Mishra (Stockport) (Lab)
It is a pleasure to serve with you in the Chair, Ms McVey. I congratulate the hon. Member for Cheltenham (Max Wilkinson) on securing this important debate. I agree with him that cricket is a fantastic sport. I also love cricket. Where we disagree is that my drink of choice when I go to watch cricket is cider, and I think that the test format is the supreme format of the game, although I appreciate that people enjoy other formats.
I am proud to represent a constituency that has several cricket clubs, including Stockport cricket club, founded in 1855; Heaton Mersey cricket club, founded in 1879; and Heaton Mersey Village cricket club. Before the parliamentary boundary review I also represented Offerton cricket club, which is now represented by my constituency neighbour, the hon. Member for Hazel Grove (Lisa Smart), and which also has a rich history.
I do not want to repeat the points made by the hon. Member for Cheltenham, but participation in cricket could be a lot better, particularly among young people from lower-income backgrounds, and young people who do not go to private schools or boarding schools. The 2023 report of the Independent Commission for Equity in Cricket warned of an elitist culture
“driven…by the lack of access…in state schools”.
They reported that, at the time, 58% of England players had been privately educated. The data will have changed over the last two years but so much more could be done.
I wish to declare an interest as a member of the all-party parliamentary group for cricket. I place that on record. I love cricket, but as a Labour party member, who many people would call quite left wing, some people say to me that cricket is not really a sport enjoyed on the left. I make the argument that the majority of people who play and watch cricket across the world are from countries in south Asia and in the Caribbean islands. Many countries in Africa also enjoy cricket. We should make sure that cricket is introduced to young people in schools at all levels across England, Wales, Scotland and Northern Ireland. There is a lot more to be done.
I know that the ECB funds many programmes, and that Sport England supports several cricket programmes, but I do not think it is enough. The England and Wales Cricket Board announced a £2 million investment in programmes aimed at engaging black and south Asian communities and state-educated children. That is good, but £2 million will not scratch the surface in the 4,000-plus secondary schools in the UK. It amounts to about £480 per school if shared around. That is not much. There are also reports in the media—hon. Members can look them up if they are interested—that the latest deal between the ECB and Sky for television broadcasting rights is approximately £220 million. That is a lot of money. I was just speaking to one particular member of the House Service before I came into this debate, because I know he enjoys cricket. He said that the TV licence fee that most of us pay should contribute towards enabling people to watch live cricket games. A lot of people are excluded because they cannot afford the £35 to £40 per month to watch Sky Sports. A lot more could be done, and it should not be left to the Government. The ECB should be doing more, and Sky could be doing a lot more. We need to have a genuine debate about including more people from low-income backgrounds in cricket.
I want to finish on a more historical point. I have not mentioned this since I was elected to this House about six years ago, but according to data from the Association of Cricket Statisticians and Historians, the ACS, the earliest known reference to the sport being played in Lancashire has been found in the Manchester Journal, dated Saturday 1 September 1781. It concerned an 11-a-side match played the previous Monday, 27 August, at Brinnington moor—Brinnington is the ward I live in—between a team of printers and one representing the villages of Haughton and Bredbury, who were the winners. As Bredbury was in Cheshire, that account is the earliest reference to cricket in that county, going back to 1781, which is quite special.
There are so many fantastic sports available across the board these days, but cricket is so special. I do not think there is a sport that is more English than cricket. So much more could be done to encourage more young people and people from various backgrounds to play cricket.
Jim Shannon (Strangford) (DUP)
Again, it is a real pleasure to serve under your chairship, Ms McVey. This has been a special afternoon for me; I hope it has been special for you as well.
I commend the hon. Member for Cheltenham (Max Wilkinson) for setting the scene so incredibly well and so clearly outlining his love of cricket. As someone who is maybe not as enthusiastic, but who loved cricket during my time at school at Coleraine Inst back in the late ’60s and early ’70s—that has completely aged me—I can never understand why cricket is not more highly regarded. Indeed, some in those days might have seen the sport as upper class, but nothing could be further from the truth. Cricket is for everyone, and I believe that allowing more cricket to be broadcast will open the door to many others.
I am going to speak about the Irish cricket team. I hope I will not offend any English cricketers when I mention that the Ireland team, which is north and south—people from both sides of the community and both countries play for the Irish team; Ireland’s national team represents both the Republic and Northern Ireland—has increased the sport’s profile with key victories, for instance knocking out England in the 2011 cricket world cup. That boosted national interest and led to a boom in grassroots participation. That culminated in Ireland being granted elite test match status by the International Cricket Council in 2017, which was another step up in the level of cricket back home.
We have plans for the future, with Cricket Ireland initiating projects to build world-class facilities to support the sport’s growth, and the board has approved a strategic £1 million investment for phase one of a major redevelopment at the Northern Ireland Civil Service Sports Association at Stormont in Belfast. Just some four weeks ago, I attended an event at which games from both sides of the community were promoted. I spoke to the guy in charge of cricket and was really encouraged by what he told me they were going to do. This investment will transform the international venue of Stormont to host matches for the 2030 T20 world cup, which Ireland is co-hosting. We anticipate great things for that tournament, which will be an opportunity to celebrate right across the United Kingdom of Great Britain and Northern Ireland, and Ireland south—a cricket tournament in which we will be sharing venues for this special moment.
Despite the positive momentum, cricket in Northern Ireland still faces challenges. Although investment is under way, a lack of quality training and playing facilities remains a barrier to expansion—the hon. Member for Cheltenham set that point in perspective for his constituency and his area. The co-hosting of the 2030 T20 world cup, while a major boost, has faced funding challenges in Northern Ireland. A funding shortfall was reported in July 2025, just a few months ago, requiring consultation with Government partners to secure necessary investment. The Northern Ireland Assembly Member Gordon Lyons has been in touch with the Minister here to see how they could advance. I look forward to the Minister’s contribution, as I think we all do, because the Minister always brings energy and enthusiasm for the subject matter, and today it is cricket. I wonder whether the hon. Lady has played cricket. If she has, I am sure she would have been dynamic. There is no doubt about that.
On trying to find a way forward, it is important to have a joint approach delivering the cricket world cup, if we are hoping to sponsor it jointly. Cricket faces strong competition from more established sports in Northern Ireland, such as soccer, rugby and Gaelic games. For the sport to thrive it needs to be more widely available and accessible. I support the motion, as it would allow cricket to be a riveting game that is understandable and available to people throughout the United Kingdom of Great Britain and Northern Ireland.
Ms Julie Minns (Carlisle) (Lab)
It is a privilege to serve under your chairship, Ms McVey. I start by placing on record my membership of the all-party parliamentary group for cricket. I congratulate the hon. Member for Cheltenham (Max Wilkinson) on bringing this important debate. Although I share his love of the long-form game as by far superior, I disagree slightly on the Hundred, which I recognise has introduced an impossibly packed schedule. When I can find time to attend a Hundred match, I am struck by how accessible to families—girls as well as boys—that format has made cricket. That is a big difference I have noticed in the crowds that turn up to watch the Hundred.
I add my support to the remarks by my hon. Friend the Member for Stockport (Navendu Mishra) about the importance of widening access to young people and lower-income families. Sadly, we are long past the days of finding our most talented fast bowlers by sending the coach down the pit. As much as we would celebrate the achievements of Harold Larwood, those days have sadly gone. We need to find a way to bring more young people from diverse backgrounds into this wonderful game.
I have a confession: I do not play, nor have I ever played, cricket. I did not benefit from growing up in a first-class county or a family of cricket enthusiasts. My love of the game came entirely from being able to watch it on free-to-air broadcasting. From Richie Benaud’s dulcet tones, gently breaking over the fading chords of “Soul Limbo”, to lazy Sunday afternoons spent watching the John Player league on BBC2, televised cricket lit a lifelong love of a game with silly fielding positions and glorious cover drives.
When cricket is accessible, without the barrier of subscription fees, it becomes more than a sport; it becomes a shared experience. In the 2019 cricket world cup final, free-to-air broadcasting drew millions of viewers and, I believe, inspired the next generation of Nat Sciver-Brunts and Harry Brooks and, to echo the point, those from more diverse and lower-income backgrounds, I hope.
Free-to-air coverage also helps grassroots clubs, such as Lanercost, Carlisle, Rockcliffe, Scotby and Wetheral in my constituency of Carlisle and north Cumbria, not necessarily a county associated with heady summer days spent watching cricket. That club cricket creates the important pipeline of talent and passion that sustains cricket at every single level. In short, free-to-air broadcasting grows the game of cricket, widens access, sparks dreams and strengthens participation.
Charlie Dewhirst
Does the hon. Member agree that it is now 20 years since the last televised Test series—the greatest Test series of all time—and that since then participation has gradually declined? Is that not clearly an indication that fewer people are being exposed to the joys of this fantastic game?
Ms Minns
I certainly agree with the hon. Member. It cannot be denied that participation shrank in that period. We also have to look at how accessible our schools are in making cricket available to our young people. Lastly, I invite all hon. Members to join me in placing on record our very best wishes to the England women for next month’s ODI World Cup.
Sarah Dyke (Glastonbury and Somerton) (LD)
It is a pleasure to serve with you in the Chair, Ms McVey. I thank my hon. Friend the Member for Cheltenham (Max Wilkinson) for securing this important debate and for his excellent speech. This summer has been a great one for British sport with the Lionesses’ success in the Euros, and I hope the Red Roses will follow suit in the women’s rugby world cup later this month; the Hundred cricket tournament also finished recently. All have been viewable on free-to-air TV and watched by millions.
I recently met Holly Woodford, the co-founder of Her Spirit, a women’s sport platform. Her Spirit’s motto is, “You can’t be what you can’t see.” This matters for all sport, especially women’s sport and cricket. Her Spirit’s barriers survey last year found that nearly half of respondents wanted to see more coverage of women’s sport on TV, in the press and media. Research from Women in Sport has also found that equal visibility increases the number of girls believing they can reach the top in their sport.
As my fellow Somerset colleague, my hon. Friend the Member for Taunton and Wellington (Gideon Amos), who is no longer in his place, pointed out, Somerset has a proud cricketing history, with our county club celebrating 150 years “not out” this year. It is in cricket that we have already seen how free-to-air coverage changes perceptions. The women’s Hundred has consistently attracted hundreds of thousands of viewers on the BBC, many of them watching women’s cricket for the first time. This exposure has been directly linked to record levels of participation in grassroots programmes.
In Glastonbury and Somerton, we have a thriving network of women’s and girls’ cricket clubs, with the Street cricket club ladies’ team participating in the T20 softball Holland division; Ilton cricket club competing in the Somerset ladies’ softball league, cup and festival; and the Long Sutton cricket club ladies’ team continuing to grow year on year. However, we know that girls drop out of sport in their teenage years at a higher rate than boys. Some fear being judged, or all too often they are self-conscious or just do not feel good enough; some simply do not feel safe. There is also a lack of opportunities.
Meanwhile, the recent Government proposal to remove Sport England as a statutory consultee from the planning system could result in the loss of sporting facilities across Somerset. Research from the Department for Culture, Media and Sport suggests that converting spikes of interest in sport into long-term participation requires access to facilities and programmes. However, women and girls do not receive an equal share of available funding from Sport England. Those are all key barriers to boosting participation for girls and women.
Free-to-air broadcasting of sports such as cricket, however, should form part of the answer, as it generates demand. More coverage normalises women playing sport. It shows that women and girls have sporting skill, and that they are passionate and competitive, in the same way as our male sporting role models, who have been idolised for generations. There is a disparity between male and female coverage. Free-to-air TV covers less women’s sport than paid channels, hurting visibility. Research from the Women’s Sport Trust in 2023 found that the BBC and ITV accounted for just 11% of total hours of coverage of women’s sport, but 77% of viewing hours. The Liberal Democrats are clear: the list of women’s sporting fixtures available on free-to-air channels must mirror men’s. We need to expand the list of sporting fixtures with live free-to-air coverage. Key national sporting events—the crown jewels of sport—should be available to all television viewers, including those who cannot afford the extra cost of subscription television, especially during a cost of living crisis.
Analysis from the Somerset Cricket Foundation found that participation in the sport has a positive impact on wellbeing and generates savings for the public purse of more than £40 million. But women and girls still lag behind when it comes to participation. Only 250,000 women play cricket, compared with more than 1 million men. Somerset is encouraging further growth. In 2025, the region launched its first formal women’s indoor cricket league, with 33 teams competing. In addition to the girls-only Dynamos programme, Glow In The Dark cricket sessions have engaged nearly 300 girls this year alone.
In my playing days—yes, I did play cricket in the garden with my brother, Rupert, invariably beating him both in batting and in bowling; I also played for my village team, Buckhorn Weston, and I played county cricket for Dorset and Wiltshire—women’s cricket was entirely absent from free-to-air broadcasting, with aspiring players unable to see their role models on television, which reinforced the idea that cricket was just not a sport for them. Today, thanks to free-to-air coverage of the Hundred, England international Twenty20 matches and highlights of the women’s T20 Vitality Blast, women and girls across the country can see players who look like them, competing at the highest level and fuelling enthusiasm for the grassroots level, because let us remember:
“You can’t be what you can’t see.”
Mr Louie French (Old Bexley and Sidcup) (Con)
It is a pleasure to serve under your chairmanship as always, Ms McVey—fantastic umpiring, and hopefully no need for DRS. I start with a declaration of interest: over the summer I, alongside a number of colleagues, attended a cricket match with Sky. It was below the registrable threshold, but I am making sure that it is transparently disclosed.
I thank the hon. Member for Cheltenham (Max Wilkinson) for securing this important debate. After another great summer for English cricket and sport, and ahead of the Ashes series and the women’s one-day international world cup, it is timely that we are having this debate, and I thank all hon. Members for their fantastic contributions so far.
As many of us will remember, between 1999 and 2005, test matches were shown on Channel 4. That culminated in the historic 2005 home Ashes series, shown on Channel 4. There was an average of between 2 million and 3 million viewers per day for an average test match, before that soared to upwards of 7 million viewers for the 2005 tests and peaked at 8.5 million on the deciding and dramatic final day of the series. The impact of that fantastic series was clear, with the ECB reporting a massive increase in junior club memberships after the 2005 series, and waiting lists at many clubs across the country. Sport England data showed that junior participation rose in 2006 by roughly 7%, bucking wider trends across the sector.
However, there has been a decline, which has been referenced, in participation rates following the switch from free-to-air cricket to subscription-based broadcasting, and there is of course a discussion to be had, as always, about coincidence versus causation, which is why we are here today. For example, Sport England’s Active People survey showed a fall from 428,000 adults playing cricket weekly in 2007-08 to 278,000 in 2014-15. That represents a drop of about 35%, and over the same period participation halved among 16 to 24-year-olds.
More recently, we have begun to see a welcome revival in participation rates as more matches are shown on free-to-air television and England’s Bazball style has attracted new admirers. Most famously, that includes the 2019 cricket world cup final, sub-licensed by Sky and shown on Channel 4 as live international cricket returned to free-to-air television for the first time in 14 years. That thrilling final, which I also had the joy of watching, saw a peak of 4.8 million viewers for Channel 4 and 3.5 million for Sky—a total of 8.3 million. It was a huge audience for a huge moment for British sport. Data from the ECB has shown that more than 1 million under-16s watched that final, and I am sure each and every one of them took inspiration from what they saw.
Of course, all sporting bodies face a tension between ensuring that their sports are accessible to the widest possible audience and the need for financial stability and support as provided by subscription-based broadcasters. The broadcast contracts with Sky have been the financial engine of English cricket for some time now, and the most recent deal is worth more than £200 million per year. Those revenues have funded professional central contracts for men and women. That includes increasing the number of professional women cricketers from 17 to more than 100. It has also helped to sustain the England team at the top of the world game and finance grassroots programmes that have reached millions of children across the country. Without that support, the professional and grassroots structures of cricket would simply not be sustainable. As a fan of cricket, I applaud Sky’s innovative coverage—I had the privilege of seeing behind the scenes first hand over the summer.
Recent years suggest that a balance can be struck—and has been struck. The 2019 world cup final was shared by Sky and Channel 4, and reached millions of people. The Hundred has brought live cricket back to the BBC, with sizeable audiences for both the men’s and women’s games, and a clear impact on youth and girls’ participation, alongside vital grassroots community work.
I am pleased that women and girls’ cricket is growing fast across the country, including in my Old Bexley and Sidcup constituency. It is fantastic that local clubs, such as Bexley cricket club, Bexleyheath cricket club—they are separate clubs—and Sidcup are growing the girls’ game in my local community. Last year saw a 21% growth in girls’ teams, a 25% growth in women’s teams, and 1,000 new women’s and/or girls’ teams across the country. Moreover, initiatives such at Metro Bank’s girls in cricket fund have added to that momentum, delivering over 1,000 hours of dedicated coaching support and helping to grow the number of girls’ teams by more than a fifth in the past year alone. That contributed towards a record 192,000 recreational games being played across the country in 2024, more than 12,500 higher than the previous record.
Those moments and the data that follows show that when cricket is visible, it can capture the imagination of the public, regardless of background. That is why the previous Conservative Government were proud to invest £34.7 million to maximise the opportunity of the women’s T20 world cup in 2026, cricket’s inclusion in the Olympics in 2028, and a men’s T20 cricket world cup in 2030 to build a network of state school cricket programmes and facilities.
While the recent announcement regarding cricket dome funding from the Government over the summer is very welcome, this Government have so far only allocated £1.5 million to fund those two new cricket domes. The money was there, but the Government have instead taken the political choice to reallocate what remains of the capital fund. Will the Minister say whether clubs across the country, which will be listening to this debate, should expect more funding to come their way in terms of grassroots support in the years ahead?
The challenge remains trying to find a balance between reach and growth in participation via the exposure that free-to-air broadcasting brings, and with the financial resources provided from subscription funding. We can all agree across the House that too much of one without the other undermines the long-term health of the sport. That is an outcome that none of us wants. I thank all hon. Members again for this important debate, as well as the hon. Member for Cheltenham for supporting it.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to serve under your chairmanship, Ms McVey. I am pleased to be responding to this debate, and I congratulate the hon. Member for Cheltenham (Max Wilkinson) on securing it. His passion for cricket was incredibly clear in the speech that he gave.
Cricket is one of our nation’s most beloved and cherished sports. Whether it is played at Headingley or in a village’s local cricket club, it builds character and brings communities together. Indeed, I visited Darfield cricket club in the village where I live last weekend for one of their community events. Barnsley is the home of Dickie Bird—[Hon. Members: “Hear, hear.”] Indeed: hear, hear. Cricket is how he became lifelong friends with one of Barnsley’s other famous sons, Michael Parkinson. For those who want to hear more about Michael Parkinson’s views on cricket, he wrote a book on it and was a lifelong fan himself.
Cricket is an enduring part of our social fabric, played and loved by millions. It is right that we take the time to recognise the importance of cricket participation across the country. Grassroots cricket reaches a broad and diverse range of communities, with a third of recreational players coming from south Asian backgrounds, who otherwise make up just 8% of the overall population, a point made by my hon. Friend the Member for Stockport (Navendu Mishra). I am also delighted to see the strong growth in women’s cricket, with participation in England and Wales up by 22% last year, as the Liberal Democrat shadow spokesperson, the hon. Member for Glastonbury and Somerton (Sarah Dyke), outlined. It is also great to see the ECB youth programmes, such as All Stars and Dynamos, providing fun and engaging ways for young women and girls to participate in inclusive cricket.
The hon. Member for Strangford (Jim Shannon) asked if I had ever played cricket. I remember the predecessor to the youth scheme from when I was at school, Kwik Cricket, and I also grew up with my grandad, who was a huge fan of Warwickshire county cricket club, in the West Midlands. I did have a go a few weeks ago when I had the pleasure of visiting the women and girls cricket festival at Sheffield collegiate cricket club, just down the road from my constituency in Barnsley, alongside my hon. Friend the Member for Sheffield Hallam (Olivia Blake), to hear about the impact that grassroots cricket clubs have in their local communities, particularly on young women and girls. Of course, it was also a pleasure to cheer on England at Edgbaston back in July—I think the Member for Glastonbury and Somerton and I were at different matches.
I recognise that the hon. Member for Cheltenham has chosen free-to-air broadcasting as the subject of today’s debate, so I hope he will allow me to begin by touching on the wider investment into cricket participation, as it is essential to understand the position relating to broadcasting. The Government are committed to supporting cricket, from the elite game down to grassroots participation. The Government provide the majority of support for grassroots sport through Sport England, which annually invests over £250 million in Exchequer and lottery funding. That includes long-term investment to the ECB, which receives £11.6 million over five years to invest in grassroots cricket initiatives in local communities, to get people more involved in cricket.
I recently saw some of the great work that Chance to Shine does to provide opportunities for children to play, learn and develop through cricket, at its impact report event here in Parliament. I was delighted to see that in action myself when I visited the Chance to Shine project in my constituency, in Worsborough in Barnsley last year. Initiatives such as the ECB’s Chance to Shine, Premier League Kicks, the FA’s Comets and Premiership Rugby’s Hitz programmes are transforming young people’s lives through the power of sport, particularly those under-represented groups such as girls, those with a disability and those from ethnically diverse or lower socioeconomic backgrounds.
I am particularly proud of the Government’s recent commitment to invest £1.5 million in capital funding for two new state-of-the-art cricket domes. This investment, which is in addition to the funding that Sport England provides for the ECB to support grassroots participation, will see new domes at Farington cricket club in Preston and in Luton. These facilities will serve as community hubs focusing on women, girls and under-represented communities, and will form part of the legacy plans for the 2026 T20 cricket world cup.
I join my hon. Friend the Member for Carlisle (Ms Minns), as I am sure all hon. Members do, in wishing the England women all the best. I echo the points of the hon. Members for Glastonbury and Somerton and for Old Bexley and Sidcup (Mr French) on women’s sport. It was an absolute pleasure to be in Brighton this weekend to launch the Government’s women’s sports task force—in the interests of time, I will perhaps write to the hon. Lady to share some information about that.
The investment that I touched on aligns with our key strategic priorities on place-based policy, because Luton and Preston are poorly served by cricket facilities. In June, we announced that a further £400 million will be invested in new and upgraded grassroots sports facilities, which will remove the barriers to physical activity for under-represented groups, including women and girls; it will support more women and girls to take part in the sports that they love, particularly by ensuring that funded sites across the UK provide priority slots for them. That funding is in addition to the £1.5 million for the two cricket domes.
The hon. Member for Old Bexley and Sidcup says that the previous Government invested £34 million, but they did not as the money was not there. I direct him to the parliamentary written question that he posed to me, which I answered on Thursday 3 September 2025. That commitment was simply unfunded, and I made that point when I appeared in front of the Culture, Media and Sport Committee. The Government are now working with sports and local areas to decide how and where the £400 million will be spent, to ensure that more people can access a wide range of sports in the places most in need of investment. Cricket will clearly be part of that conversation.
I will now turn specifically to the impact of free-to-air broadcasting on grassroots sports participation. Sport has the power to inspire people to get active. Evidence suggests that viewing infrequent major events, such as the Olympics, that feature a range of sports, including sports that appeal to the inactive, have a greater impact on participation than regular broadcasts of professional sports. Evidence also shows that those events need to be followed up by the right grassroots facilities and programmes to support people to harness that inspiration and get active.
Watching elite sports inspires young people to engage in participation. At the same time, broadcasting rights deliver revenues for sporting bodies, which are often invested in activities to promote physical participation. It is therefore important that governing bodies consider access to live sports and maximising much-needed revenue. It is important to get that balance right, and that balance is for each sport’s governing body to determine.
The balance is demonstrated well in cricket, where certain fixtures are behind a paywall, including live television coverage of test and one-day matches. However, some fixtures, including the Hundred competition, radio coverage of test matches, coverage of some T20 fixtures and highlights of test matches are broadcast by free-to-air broadcasters. The ECB has considered the impact of free-to-air and behind-a-paywall broadcasting over the years, and has proceeded with this balanced approach. Approximately 75% of the ECB’s £310 million annual revenue comes from the sale of broadcasting rights.
The ECB is a signatory to “Broadcasting of major sporting events: a voluntary code of conduct for rights owners” in the UK. Signatories of the voluntary code should endeavour to ensure that broadcasting coverage of all major sporting events under their control should generally be available in the UK through free-to-air television in live recorded or highlights broadcasts and that a minimum percentage of broadcasting revenue should be reinvested to support the long-term development of their respective sport. That is why, between January 2024 and January 2025, the ECB invested £77.5 million—37% of total broadcast revenues—into activities to support the recreational game and the development of the game.
The listed events regime is designed to ensure that such events of national significance are available to as wide an audience as possible by prohibiting exclusive broadcasting of the event without prior consent from Ofcom. However, listing an event in either group A or B does not guarantee that an event will be broadcast live or on a free-to-air channel. Rights holders are not required to sell live rights for listed events and free-to-air broadcasters are not obliged to purchase them, because all UK broadcasters are operationally and editorially independent of Government.
The list of events works well to strike an appropriate balance between public interest and income generation for sporting bodies and includes a varied cohort of events that have had an enduring popular appeal. The Government have no plans to review the list at this time, but we listen carefully to people’s representations and developments continue to be kept under review.
In closing, the debate has been a brilliant opportunity to discuss the continued success of cricket. I recognise the strong desire to see more cricket on free-to-air television, but I hope I have been able to set out how the Government are supporting that directly as well as the balance we seek between free-to-air audience reach and commercial viability. I thank the hon. Member for Cheltenham (Max Wilkinson) once again for securing the debate.
Max Wilkinson
I thank all hon. Members for turning up for the debate. I have 12 minutes left, so I will take hon. Members through a rundown of my debut for the Uphill Castle cricket club under-13s back in 1997—it was a special occasion. I jest, of course.
This has been an important and instructive debate and there is a lot of common ground. I will quickly reflect on the point about “free to air”. It was in the title of the debate, but as we have heard free to air and broadcast coverage that is not free to air have a huge impact on how cricket is consumed, participation levels and the cricket calendar. The point I was attempting to draw out about the Hundred is that, although it has been a success in getting more cricket broadcast on free to air, there have been unintended consequences. That is the point that the ECB and everyone with an interest in cricket needs to work to unravel.
Reflecting on the Minister’s comment on cricket books, such as “Michael Parkinson on Cricket”, I can recommend —if she is up for a cricket read—Geoffrey Boycott’s “Opening Up”, which is one of the best, and “Boycott on Cricket”: two excellent summer reads.
I join the Minister in saying that it is good news that the ECB is investing in domes; clearly, with the changeable weather in this country, we need many more of them. Domes are obviously useful for winter nets for young people, too.
The shadow Minister, the hon. Member for Old Bexley and Sidcup (Mr French), set out the scale of the improvement in participation numbers, but clearly there is a wave here. Although in recent years participation has gone up a little bit—even quite a lot in some years, in which we have seen spikes in participation—the trend over the last 20 years or so has been downwards. That is what I think the ECB is trying to address by increasing participation and interest in cricket via the Hundred.
I will just reflect briefly on what various Members have said. The points about elitism, class, access and the availability of cricket to everyone are not lost on me. I went to a school where we played only one cricket fixture in five years and of course we got absolutely tonked in that one fixture. I do understand those points. I had to get all of my cricket by playing at a local club, Uphill Castle, and I am extremely grateful to all the coaches who gave their time there. Of course, increasing availability will come down to the levels of investment that the Government are making in education, the availability of PE teachers and the availability of sports pitches. Planning was also raised during this debate; it is an important point.
I would really hate for the hon. Member for Carlisle (Ms Minns) to leave this debate thinking that I am one of those people who spends my whole time ranting about the Hundred and saying that we must abandon the tournament. That was not the purpose of this debate. I have many friends who tell me repeatedly that the Hundred must be stopped immediately, but that is not my view. I have been to watch the Hundred. Indeed, as a Hundred orphan, I had to go all the way to London to watch London Spirit play, because I have no local team.
There needs to be a lot more thought about how the ECB reworks the cricket calendar, so that in a few years’ time, when my daughter goes to school, we will have an opportunity to go and watch some cricket in the school holidays. At the moment, it is really difficult; it will be the Hundred or nothing and we do not have a team in the Hundred. We would have to come all the way back to London, or go to Birmingham, or Wales, or maybe even Leeds—somewhere else.
Max Wilkinson
Lancashire, perhaps—yes, to Manchester.
Those are real issues that will have an impact on young people’s participation in cricket and so many people’s enjoyment of cricket. We need to think for much longer about how the calendar can work for everyone, whether that means the young people who want to go and watch cricket during their school holidays, or the old gents and ladies who attend games with their cheese and pickle sandwiches and their weak lemon squash, sitting all day in the sunshine watching the sport they love. That is the thing that I think is so special about cricket and it is why I love red ball and county championship cricket.
I thank all the Members who have taken part in this debate for their contributions and I thank you for chairing it, Ms McVey.
Question put and agreed to.
Resolved,
That this House has considered the impact of free to air broadcasting on cricket participation.
School Accountability Reform Consultation: Response
(1 day, 13 hours ago)
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The Secretary of State for Education (Bridget Phillipson)
Today I am announcing the Government’s response to their consultation on school accountability reform. It is vital we have a better accountability system that sets clear expectations, facilitates improvement and spreads excellence to drive high and rising standards for every child throughout each phase of their education. I would like to thank all who responded to the consultation—the Government value the feedback.
The consultation received 870 responses and officials met with stakeholders including groups representing teachers, school leaders, governors and local authorities, and with parents to discuss the proposals. It ran in parallel to Ofsted’s consultation on education inspection reform and report cards. Ofsted is publishing its response today also.
My Department consulted on:
our approach to improving school accountability, and the principles guiding our work, so there is a shared understanding of what drives our approach;
the Department’s future vision for school profiles—an accessible digital service providing information about schools, supporting parental choice and collaboration between schools; and
new arrangements for intervention in maintained schools and academies, including when academisation to change the governance of a school is needed to drive high and rising standards for every child.
The consultation demonstrated strong support for our accountability principles. In response to feedback, we have further strengthened our commitment to inclusion, ensuring that our reforms support all children and young people, regardless of circumstances. This supports the Government’s opportunity mission to break the link between background and success. Ofsted will also introduce inclusion as a stand-alone evaluation area in its renewed inspection framework, reinforcing its importance across the system.
There was also strong support for school profiles, with 77% of respondents agreeing that they should be the central source for up-to-date information on school performance. This academic year, we will develop two new digital services to support parents and schools. The first is school profiles, giving parents a more rounded picture by bringing useful information about schools together in one place and helping them to make informed decisions about their children’s education. The second is a digital school improvement service that will help schools compare their performance with other schools and support collaboration and sharing of best practice.
Subject to the passage of the Children’s Wellbeing and Schools Bill, structural intervention through issuing of academy orders will continue to be the default approach for schools in special measures, because no child should be left in a school that does not have the capacity to improve. For those schools that Ofsted judges do have capacity to improve, from September 2026 our regional improvement for standards and excellence—RISE— teams will get in quickly, working with the responsible body to begin implementing interventions to drive rapid and sustainable improvements. If, for whatever reason, a school in this position has not improved sufficiently within 18 months, we will normally issue an academy order to ensure it gets the leadership and support it needs. We will also expand RISE support to those schools with very low levels of pupil attainment with a further consultation on this. Using a combination of structural and RISE mandatory interventions we will drive improvement activity with, on average, around twice as many mandatory interventions as were covered in the two years prior to the policy change.
We welcome Sinéad Mc Brearty’s independent report on the workload and wellbeing implications of the inspection reforms, which Ofsted commissioned, and which it has published today. We are committed to ensuring, in line with our principles, that our reforms take into account the context in which schools and providers operate, and the impact of our arrangements on workload and the wellbeing of leaders, teachers and staff.
The Department’s reforms have been designed to work alongside Ofsted’s renewed education inspection framework and new report cards, the details of which have been published today as part of its consultation response.
Ofsted’s new approach completes the move away from oversimplistic single headline grades to providing parents and staff with a much clearer, much broader picture of how schools are performing—that is what report cards will provide. The renewed framework strengthens accountability and will help to drive high and rising standards. This includes a stronger focus on achievement, attendance, inclusion and how the needs of disadvantaged and vulnerable children and young people are being met. Enhanced monitoring will mean a swifter return from inspectors to check that progress is being made where it is needed.
Taken together, the measures announced by the Department and Ofsted today give parents the clear and reliable information they need to make informed choices about their child’s education. And they will give school leaders, staff and responsible bodies the necessary information and support to help all schools move forward towards excellence.
Copies of the Department for Education’s and Ofsted’s consultation responses will be deposited in the Libraries of both Houses.
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NHS Performance Data Tool and NHS Trust League Tables
(1 day, 13 hours ago)
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The Minister for Secondary Care (Karin Smyth)
I am updating the House about the publication of a data tool and league tables that make NHS performance under the NHS oversight framework open and accessible. This delivers a commitment in the “10 year health plan for England: fit for the future” to publish new league tables and as part of our plan for change, ensuring our investment in the NHS delivers meaningful outcomes, greater efficiency, and real value for patients.
At last year’s NHS providers conference, the Secretary of State for Health and Social Care announced league tables as part of our plan to stop rewarding failure and to create a better and more transparent health service. We know that this is more important than ever, and the public expect better care and value following the record investment in the NHS made by this Government. This is why today NHS England has published these league tables, along with a data tool that gives a high-level view of the performance of NHS trusts. With this, the public will be able to see how their local NHS organisations are performing, including data on key areas such as urgent and emergency care, ambulances and electives—data that MPs and peers can also draw upon. Everyone can now see for themselves how their local services are doing and better hold their local NHS organisations to account.
The top trusts will be rewarded for their performance with greater autonomy, including the ability to reinvest surplus budgets into frontline improvements, such as diagnostic equipment and hospital repairs. We are also introducing a new wave of foundation trusts, which will give the best-performing trusts more freedom to shape services around local needs.
Meanwhile, trusts facing the greatest challenges will receive enhanced support to drive improvement, with senior leaders held accountable through performance-linked pay. The best NHS leaders will be offered high pay to take on the toughest jobs, sending them into challenged services and turning them around.
This is not a “name and shame” exercise; we know that there is amazing work carried out every day in every NHS organisation, and the information we are releasing will shine a light on the achievements of the frontline and back-office staff who push hard every day to improve the lives of everyone in this country. We are publishing these tables to drive high-level performance changes and, where needed, to inform difficult conversations about organisational performance, to inspire improvement and deliver a better NHS for all. We are also improving the fundamentals of oversight through the NHS oversight framework, which NHS England published on 26 June. It sets out a revised transparent approach to the oversight of integrated care boards and trusts following feedback from these organisations and wider system partners. The streamlined set of metrics within the new framework will enable systems and providers to focus on the recovery that we know the NHS needs, while maintaining quality, safety and patient experience. Trusts will be placed into one of four segments based on their performance against these metrics. The framework explains how NHS England will use the segmentation of providers to inform incentives and consequences for performance, and support improvement.
This is a transitional year for ICBs, as they transform in line with NHS England’s model ICB blueprint to focus on strategic commissioning and implement plans to meet the running cost reductions the Government require. We have decided, therefore, that they will not be scored, segmented or ranked this year. NHS England will still conduct annual assessments of ICBs to review how well each is performing its statutory duties, and will introduce ranking in the next performance year, 2026-27.
The league tables, data tool and underpinning framework are an important first step in both the recovery and the transformation of our health service in line with the 10-year plan. We will continue to refine our approach to both the league tables and the data tool in the light of feedback from the NHS, experts, and the public. They will make what the NHS is good at—and what it needs to improve—more visible to the public, so that they can hold us to account for its successes and failures.
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Integrated Care Boards: Running Costs and Boundary Alignment with Strategic Authorities
(1 day, 13 hours ago)
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The Minister for Secondary Care (Karin Smyth)
Today I am updating the House on progress towards reducing the running costs of integrated care boards and the Government’s ambition to align the boundaries of integrated care boards and strategic authorities where feasible.
We have committed to reducing the running costs of ICBs and to redirect this funding to frontline services. To deliver this, our “10 Year Health Plan” sets out that ICBs must focus on their role as strategic commissioners, ensuring the best possible value in securing local services that improve population health and reduce inequalities.
In directing ICBs to focus on strategic commissioning, we are reducing duplication of functions that are undertaken by other NHS organisations such as performance management and assurance, freeing up vital resources.
To deliver a reduction in running costs in this financial year, a number of ICBs will cluster together to share leadership and functions; clustering ICBs remain legally separate organisations with their own financial allocations. It will mean that during this financial year the number of ICB senior leadership teams will go from 42 to 26.
In the longer term, there will be fewer, larger ICBs enabling them to harness a shared budget of sufficient size to improve efficiency and reduce running costs. Our ambition is for these ICBs to be coterminous with one or more strategic authorities wherever feasible, a commitment made in the “English Devolution White Paper” and reaffirmed in our “10 Year Health Plan”.
Aligning public service boundaries facilitates service integration, harnesses the opportunities of strategic planning between the NHS and strategic authorities, and supports delivery of a “health in all policies” approach.
I am today announcing the first of these new ICB footprints. These will come into effect on 1 April 2026 and are:
Norfolk and Suffolk ICB
Essex ICB
Hampshire and the Isle of Wight ICB
Surrey and Sussex ICB
North West and North Central London ICB
Thames Valley ICB
Central East ICB (Hertfordshire, Bedfordshire, Luton, Milton Keynes, Cambridgeshire and Peterborough).
In the case of Thames Valley ICB and Central East ICB, we are progressing with these new ICB footprints on the understanding that these may be reviewed in future to allow for alignment with any future strategic authorities, and newly established unitary authorities resulting from local government reorganisation.
Next summer, as local government reform progresses, we plan to decide further ICB mergers and boundary changes to come into effect on 1 April 2027.
The Department of Health and Social Care, alongside NHS England and the Ministry of Housing, Communities and Local Government, will continue to work closely together, and with ICBs and their local partners, to ensure future changes to ICB footprints achieve the best outcomes for patients and citizens. ICB leaders will continue to engage with all local partners, including Members of this House, on the further development of plans, as we stride towards delivering the ambitions set out in our “10 Year Health Plan”.
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