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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Ending Homelessness
(1 day, 23 hours ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Bob Blackman (Harrow East) (Con)
I beg to move,
That this House has considered progress on ending homelessness.
It is a pleasure to serve under your chairmanship, Mr Efford. I thank the Backbench Business Committee, which I chair, for granting this debate—I am not surprised that it took that very sensible decision. I begin by welcoming the new Minister to her place and congratulating her on her appointment and the recent funding announcement to support local authorities in addressing homelessness. Her prompt action and proven commitment to tackling child poverty gives me, and I am sure the whole House, confidence that we can look forward to a constructive and purposeful debate today. I am grateful to the many Members who have attended.
The Minister needs no persuasion that homelessness is one of the great injustices in our society and an affront to human dignity that we have a moral duty to end. I think we share that belief across this House. We see every day the human cost of homelessness. We see it far too frequently in the constituent letters we receive, in the stories we hear at our surgeries, and even outside the parliamentary estate on the streets of Westminster as we walk to work each day. But behind every statistic and every person is a unique story. This morning at least 4,600 people woke up on our streets, uncertain where they would sleep tonight. More than 132,000 households live in temporary accommodation, facing constant instability, and more than 172,000 children went to school today knowing that when they return it will not be to a home, but to a mouldy bed and breakfast, a run-down hotel or a short-term let that they could be asked to leave at any moment. They are not just numbers on a page; they are lives in limbo.
Homelessness is a moral crisis, but also a practical one. Local authorities in London—I know colleagues will refer to their own areas—are now spending almost £5 million every single day on temporary accommodation that is often of such poor quality that it damages health and education and hinders opportunity. It is difficult to imagine another area of public spending where we would tolerate so much money being spent to achieve so little outcome. As winter approaches and the nights grow colder, the urgency deepens. This is the moment for decisive, co-ordinated action, so I ask the Minister when we can expect the Government to publish and deliver the promised cross-Government strategy for homelessness. Can she confirm that the interministerial group will continue to meet regularly under the chairmanship of the Secretary of State to drive that strategy forward? If she needs a vehicle to make that happen, my private Member’s Homelessness Prevention Bill, which received an unopposed Second Reading, could go into Committee with a money resolution and we could help get a legal position to support the work that she is going to do.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Member on securing the debate. Does he agree with me that, difficult as it might be, the key to the problem that he has correctly outlined is the availability of lower-cost, good quality social housing? We must aim to expand that as quickly and successfully as possible in the next few years.
Bob Blackman
Clearly, the hon. Member anticipates something I will say later in my speech. I have long advocated that we need to build 90,000 affordable homes for social rent each year to meet the demand.
As co-chairman of the all-party parliamentary group for ending homelessness, I want to draw the Minister’s attention to our new report, “Homes, Support, Prevention—Our Foundations For Ending Homelessness”. The report brings together evidence from across the country, from local and combined authorities, charities, service providers, academics and, crucially, people who have lived experience of homelessness themselves. The report distils a complex problem into three simple but essential pillars that any effective strategy must deliver: first, preventing homelessness wherever possible; secondly, rapidly rehousing people who still need help; and thirdly, improving support for those experiencing the most severe forms of homelessness.
The best way to end homelessness is to prevent it happening in the first place. Almost everyone with lived experience who contributed to our APPG’s work identified a point at which their homelessness could have been prevented. That is a missed opportunity where timely help could have made all the difference. Prevention should not be a political issue; it is simply common sense and morally right, socially responsible and economically wise. Research by Shelter found that one in 10 people in temporary accommodation had to give up work due to their housing situation. That statistic alone should galvanise us to act earlier, before people lose not only their homes but their jobs, stability and self-confidence in a downward spiral.
Through my private Members’ Bills, I have worked to put prevention at the heart of our response. The Homelessness Reduction Act 2017 focused on preventing people becoming homeless and presented the largest and most comprehensive changes to the rights of homeless people for more than 39 years. Fundamentally, its purpose is to ensure that everyone at risk of being homeless or who is currently homeless is legally entitled to meaningful help from their local authority, regardless of their current status.
Previously, local authorities had been entitled to assist only those who were deemed a priority and at crisis point. That excluded the majority of people, including almost all of those who were single. The Act also addressed the significant lack of meaningful advice and assistance, which more often than not in the majority of cases was not tailored to the individual’s needs and requirements.
The Act implemented a duty on specified public bodies to refer any person whom they believed was at risk of homelessness within the next 56 days to the relevant housing department. That helps to direct appropriate and efficient support and resources to those in need and prevent them from sleeping rough before it is too late. The 56 days marks a significant extension; previously only those at risk of homelessness in the first 28 days would potentially receive some help. The extension to 56 means that people have a longer opportunity to relieve their situation.
I am pleased to say that, in the first year of implementation, the Homelessness Reduction Act prevented 37,000 people from becoming homeless. It continues to be just as effective today, some six years later. In the first year alone, an additional 60,000 people who were previously ineligible for homeless support were assisted in getting off the streets and into appropriate accommodation. That is a rise of almost 50% on the previous year to the Act’s implementation. Today, I am proud to say that the Homelessness Reduction Act has prevented more than 1.7 million people from becoming homeless, with more than 777,000 now in stable and secure long-term housing.
I am pleased that the Act has helped thousands avoid the trauma of homelessness, but the truth is that we can and must go further. Across our APPG’s evidence sessions, we repeatedly heard of cases where other public services missed crucial opportunities to step in: hospitals discharging patients on to the street; jobcentres overlooking signs of distress; prisons releasing people with no plan for where they would go next. Those are not isolated incidents; they are systemic failures. Recent analysis from the Institute for Government found that discharges from public institutions now account for almost half the recent rise in homelessness applications. If we are serious about tackling homelessness we cannot leave the burden solely on housing departments. It must be a whole-system effort, covering health, justice, education, welfare and local government. We must all work together to stop people falling through the cracks.
Prevention is not only compassionate; it is cost-effective. When someone keeps their home, they recover faster after illness, they are half as likely to reoffend and they find it easier to get back into work. Will the Minister meet me and colleagues to discuss how she intends to embed prevention firmly at the centre of the Government’s homelessness strategy?
Even with the best prevention measures, there will always be times when homelessness cannot be avoided. When that happens, our goal must be to get people back into stable, affordable homes as quickly as possible. That requires a clear, long-term commitment to increasing the supply of social and affordable housing. I have long argued that if we are serious about ending homelessness we must build more homes that people can actually afford.
The Secretary of State’s recent commitment to delivering more social and affordable homes is welcome, but words must now turn into action, and that delivery must be targeted where the need is greatest. Too often, affordable homes are built in the wrong places or at rent levels that are out of reach for those most in need. I ask the Minister to confirm that she will work closely with the Housing Minister to ensure that the long-term plan for housing delivers social homes where they are most needed, and that people experiencing homelessness are given fair and equal access to them, because rapid rehousing works only when the homes are there for people to move into.
We must also ensure that temporary accommodation truly is temporary—a stepping-stone, not a dead end. I have met families who have spent years moving between short-term lets, B&Bs and converted offices, never knowing where they will be next. It is impossible to rebuild their lives under those conditions. A genuine rapid rehousing model backed by adequate social housing can break this cycle. It restores stability, improves health and education outcomes and reduces long-term costs. We owe it to those families, and to the taxpayers footing the bill, to make that a reality.
The third and final pillar of the APPG’s framework is support for those whose homelessness could not be prevented, and who need more than housing alone to rebuild their lives. Supported housing plays a crucial role in that effort. I introduced the Supported Housing (Regulatory Oversight) Act 2023 after receiving extensive evidence of rogue landlords exploiting vulnerable people and the taxpayer. Rogue unscrupulous landlords were setting up supported housing schemes and claiming public money through housing benefit, while providing little or no care whatsoever. Devastatingly, those abuses were not just financial ones; they destroyed lives. Through the Housing, Communities and Local Government Committee I saw how deeply that issue runs.
The challenge now is to strike the right balance: driving out the rogue providers while protecting the good ones, and ensuring that vulnerable residents are not made homeless again as a result of reform. That is why I agreed that the powers within the 2023 Act should be subject to consultation so that we can get this right; but we are two years on from Royal Assent and those powers have yet to see the light of day. I ask the Minister to provide an update on three points.
When will the Government publish detailed guidance and timescales for implementing that, including funding for councils, strategic needs assessments and licence fees? What steps are being taken to ensure that local authorities are not misusing their powers to close providers down through housing benefit reviews without proper care for the residents’ welfare? Will the Government confirm that domestic abuse refuges and dispersal providers will not be required to register every individual property separately? That is an administrative burden that would put vital services at risk.
Beyond regulation, however, lies a deeper issue: the collapse of support capacity. Across all our APPG evidence sessions we heard from charities, councils and service providers struggling to meet the growing complexity of people’s needs. The cuts to local support services over the past decade have hollowed out the safety net, leaving too many people without help at the moment they need it most. I have long been a champion of Housing First, a model that provides stable housing alongside intensive wraparound support. The evidence for its effectiveness is overwhelming, yet too many areas lack the funding to deliver it at scale.
When I worked on the supported housing Act, it became clear that rogue operators had thrived precisely because legitimate, well-regulated support had been stripped back. If we want to eliminate exploitation and end homelessness we must rebuild the foundations of proper support. I ask the Minister: what discussions is she having with colleagues across Government about addressing the chronic underfunding of support services? Will the forthcoming homelessness strategy include clear measures to ensure that everyone, regardless of their needs, can access the right help to rebuild their lives?
Homelessness is not inevitable. It is not a natural part of modern life. It is the product of policy choices, systems that fail to intervene soon enough and services that are no longer adequately resourced to meet the need. We have an opportunity and a duty to end that. This is a moment to bring together not only Government Departments, but local authorities, charities, faith groups and communities to deliver on our shared ambition that everyone should have a safe and secure place to call home.
At oral questions last week, the Minister said she never knowingly misses an opportunity to meet an APPG. In that spirit, I warmly invite her to join us at the APPG for ending homelessness annual general meeting, which will take place between 1 pm and 2 pm on 11 November, where she can discuss these issues further—and of course we will benefit from her words at the meeting. I place on record my sincere thanks to the APPG secretariat—Rosie, Matt, Jasmine and all the team at Crisis—for their outstanding work in co-ordinating our efforts, and to the 47 parliamentarians and 27 sector organisations serving on the steering group. Their commitment, expertise and compassion drives this agenda forward every single day.
This debate is not just an opportunity to restate our concern; it must be a catalyst for action. Homelessness is not inevitable. It is solvable. The test of any Government and any Parliament is whether we have the courage and compassion to solve it. Let us make sure that no child grows up without a place to call home, and that no person has to face another winter on the streets. Let us act together to end homelessness once and for all.
Clive Efford (in the Chair)
Order. There is a lot of interest in this debate. If a Member is intending to speak, please stand so that we have a chance to make sure everyone can make a contribution.
Paula Barker (Liverpool Wavertree) (Lab)
It is a pleasure to serve under your chairmanship, Mr Efford. As co-chair of the APPG for ending homelessness and the co-sponsor of this debate, I thank all colleagues who have attended; our new Minister, my hon. Friend the Member for Birkenhead (Alison McGovern); Crisis, the secretariat for the APPG; and our fantastic steering group, comprised of organisations that support people who are homeless.
This debate comes at a vital moment. In 2023-24, some 1,611 people died while homeless—up 16% on the previous year. Eleven of them were children. Four were babies aged under one. Long-term rough sleeping is up 13% compared with last year, and long-term rough sleepers now outnumber those who are new to the streets. We have already waited long enough to see a strategy that addresses the moral injustice of homelessness, and I hope the Minister can share an update on progress.
The Prime Minister was absolutely correct to say in Liverpool that we must renew Britain. However, true renewal is possible only with deep roots and strong foundations. We often talk about the importance of a home as a foundation for a good life. Today, I would like to set out how ensuring that the cross-departmental strategy for homelessness delivers secure, affordable homes for everyone can be the foundation of a good society and a better Britain—a country where parents know they will be able to feed their kids after they have paid their rent, where workers can focus on their job and not where they are going to sleep that night, and where people are welcomed into secure communities, not left on the streets.
The latest report of the APPG for ending homelessness, “Homes, Support, Prevention—Our Foundations For Ending Homelessness”, sets a clear blueprint to build that foundation, and I urge the Minister to consider it. The report includes the ambition of halving the use of temporary accommodation and ending rough sleeping by 2030. I am incredibly proud that in their time in office the last Labour Government managed to drastically reduce rough sleeping and the use of temporary accommodation. As an heir to that Government, will the Minister commit to that target and to emulating the progress made on this issue by her Labour predecessors?
This is no utopian target. Our report sets out how to get there by delivering social homes, improving support systems and prioritising prevention to address the root causes of homelessness. On that first point, I welcome the new Secretary of State’s enthusiasm for building and his recognition that we need homes to end homelessness, but England has seen a net loss of 180,000 secure, truly affordable social homes over the last decade, and we must be mindful that our current plans will not match the 90,000 social homes a year that the National Housing Federation and Crisis have calculated we need. It is therefore doubly important that the homes built are accessible to people experiencing homelessness.
For example, domestic abuse survivors often have to leave at short notice, with little to no help. Although the changes to the local connection rule for survivors are welcome, it remains the leading cause of homelessness among women. Too often, survivors cannot access a secure home. When compiling evidence for our APPG report, we heard a heartbreaking story from a survivor of domestic abuse who had been stuck in temporary accommodation so filthy that she could not let her children play on the floor. Will the Minister set out how she intends to work with the Housing Minister on the long-term housing plan and with the Safeguarding Minister on the violence against women and girls strategy, to ensure that those plans complement her own strategy and that every survivor who takes the decision to leave has a secure home to go to? Will she also consider a full roll-out of the “whole housing” approach?
On improving support, the evidence we collected from frontline services and homeless charities was clear: they need to secure funding to deliver effective support for people with multiple needs who need more than a home to end their homelessness. People and local authorities are trapped in a cycle in which the scale of urgent need is overwhelming services, leading to worse outcomes despite higher spending. The National Audit Office gave evidence that the current system was “unsustainable” and over-focused on crisis management, not prevention. We need to break the cycle with both an emergency response to spiralling rates of homelessness and an ambitious, resourced plan to transform homelessness support within a decade. Will the Minister commit to matching the calls for homelessness funding to be consolidated, flexible to needs and based on multi-annual contracts?
Finally, on prevention, the hon. Member for Harrow East (Bob Blackman) spoke about the importance of breaking down silos in public services, but it is also important that broader departmental spending decisions do not cause homelessness. For example, when compiling our report, the APPG heard evidence from charities and local authorities that the decision by the Department for Work and Pensions to freeze local housing allowance is making homes unaffordable as rents continue to rise. I can see that playing out in my Liverpool Wavertree constituency: according to analysis by Crisis and data from Zoopla, just three in every 100 properties advertised for rent last year were affordable for people who rely on local housing allowance.
When people inevitably miss out, they have nowhere to go but the local authority. It is therefore entirely unsurprising that council spending on TA is spiralling, with a 25% rise across England in the last year alone, and as the Minister has rightly identified, record numbers of children are now homeless and housed in temporary accommodation. Does the Minister agree that although the Secretary of State for Work and Pensions has every right to be prudent, we cannot simply ignore the economic reality of how much it costs to rent a home and ask local authorities and society to pick up the pieces?
Will the Minister also consider rolling out Housing First? The pilots in Greater Manchester, the Liverpool city region and the west midlands achieved 84% tenancy sustainment—84% of people sustained long-term tenancies after three years—and measurable cost savings. Analysis from the Centre for Social Justice finds that for every £1 invested in Housing First, the public purse saves £2 through reduced A&E, policing and justice costs.
Social homes, secure support and a truly preventive system that helps people to avoid homelessness are the kind of common-sense steps that will build the foundation of a Britain that we can all be proud of at the next election.
Several hon. Members rose—
Clive Efford (Eltham and Chislehurst) (Lab)
Order. A lot of the people who are standing did not provide their names to the Chair. I am sorry, but I will have to impose a two-minute limit if I am going to get everybody in and bring in the Front Benchers at 10.28 am.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Mr Efford. I thank the hon. Member for Harrow East (Bob Blackman) for setting the scene so well, and I wish the Minister well in her new role. I will ask her for one thing at the beginning. This morning I met representatives from Centrepoint, which looks after homeless young people, and I understand that they have written to the Minister, as part of the youth chapter collective, to ensure that youth homelessness is a central part of what the Government are doing. Will the Minister agree to a meeting on that?
In the short time available, let me give a quick perspective on Northern Ireland, the stats for which are incredibly worrying. Some 7,600 households presented as homeless in 2024-25. Of those, 67% were accepted as statutory homeless, with 5,200 living in temporary accommodation. Here is the big thing: the cost of temporary accommodation, according to the Northern Ireland Audit Office, is some £39 million. For us in Northern Ireland, it is a massive issue. In my office, housing issues and affordable housing make up most of the issues we deal with. I think of those living in accommodation, but then the landlord decides to sell the property and makes them homeless, and when they go for private accommodation they find that the price is absolutely out of reach.
One of the solutions would be for uninhabitable homes to become habitable. In Northern Ireland we have almost 1,600 or 1,700 of them. A nationwide campaign on that could turn around accessible housing very quickly. It is not the Minister’s responsibility, but we need to be able to offer first-time buyers affordable homes. That would take some of the pressure off. Those are my quick requests; in two minutes that is all I can say.
Liam Conlon (Beckenham and Penge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Efford. I am grateful to my hon. Friend the Member for Liverpool Wavertree (Paula Barker) and the hon. Member for Harrow East (Bob Blackman) for securing this important debate. I thank the APPG for ending homelessness for its comprehensive recent report, as well as all those across the homelessness sector who work tirelessly and those whose experience and expertise informed the report.
Homelessness in all its forms is rising. In my borough of Bromley—a borough also represented by you, Mr Efford, and by the hon. Member for Orpington (Gareth Bacon)—nearly 2,000 households are now in temporary accommodation. Most of them are placed out of borough, in part due to the failure of the Conservative council over several decades to invest in building new homes. I have spoken to families in Beckenham and Penge who have been placed as far away as the midlands, uprooted from their homes, work, schools and support networks in south London. I remember, on my first visit to a school after the election, hearing about the dozens of children at that school who live in the Travelodge, and the impact of that on them.
We are short of time, so I want to make a couple of quick points. I welcome the steps the Government have already taken, including the £39 billion of investment to deliver the biggest increase in social and affordable housing in a generation, the measures in the Renters’ Rights Bill, and an £84 million cash boost to support families in temporary accommodation. If we are to meet the scale of the challenge, we must work with charities such as St Martin-in-the-Fields and its brilliant chief executive officer Duncan Shrubsole, who is a constituent and a very good friend of mine. To the point made by my hon. Friend the Member for Liverpool Wavertree, the last Labour Government achieved so much, and it is in our DNA to tackle this issue. We are making progress, but we need to accelerate. I look forward to the Minister’s response.
Adam Dance (Yeovil) (LD)
It is a pleasure to serve under your chairmanship, Mr Efford. I thank the hon. Members for Harrow East (Bob Blackman) and for Liverpool Wavertree (Paula Barker) for securing the debate.
Since I was elected, housing and homelessness has been the biggest issue that my team have been dealing with in Yeovil. We have had hundreds of cases. I will share a few stories to highlight the impossible situations in which some people find themselves in my constituency, but I will not share their names due to the nature of the cases.
One constituent has been homeless since April, after the breakdown of his long-term relationship. As he shared a tenancy with his ex-partner, he was left in a complex legal position. If he removed himself from the tenancy, he risked being labelled purposely homeless, but if he remained on the tenancy, the council would consider him still to have suitable accommodation.
After several months, the council accepted a release duty and offered him a placement in shared accommodation. However, he had to decline the offer because of the high level of drug activity at the property—he feared he would relapse. Since then, he has been denied any further housing support. This constituent, as is the case for so many constituents like him, is just trying to get his life back on track, but now he is living in a garage with no access to basic facilities.
Unfortunately, there are so many other stories. For example, my office was made aware of a blind woman sleeping rough in Ninesprings park; she was forced out of her home because squatters took possession of it. She would have remained entirely off the radar, with no engagement from local authorities, if a member of the public had not approached her and told her to reach out to my office.
A country is only as good as the support it gives to the most vulnerable, and right now we must do more to end homelessness. But homelessness is not just a housing issue. We desperately need to invest more in drug treatment and rehabilitation, and get more mental health hubs in rural communities. We also need more community centres and police officers, to tackle crime and reach out to vulnerable people.
Finally, as that last case shows, we must ensure that local authorities’ homelessness relief systems are accessible to those who are visually impaired, neurodiverse or homeless with no access to technology. I ask the Minister to review this matter urgently. Hearing today’s heartbreaking stories, it is difficult not to feel hopeless and powerless. But we are not powerless; we have the power.
Kim Johnson (Liverpool Riverside) (Lab)
It is a real pleasure to serve under your chairship today, Mr Efford. I thank my good friend and constituency neighbour, my hon. Friend the Member for Liverpool, Wavertree (Paula Barker), as well as the hon. Member for Harrow East (Bob Blackman), for securing this debate. I welcome the Minister to her place.
As the MP for Liverpool Riverside, I have witnessed at first hand the devastating impact of homelessness. Before I was elected, I worked for Liverpool adult services and supported a number of service users living in hostels or on the street, many with multiple complex needs, including mental health issues, addiction and disabilities. There were people losing their legs due to injecting, or using drugs or alcohol to self-medicate because they were abused as kids in care; care leavers left to fend for themselves; and victims of domestic violence arriving in Liverpool from other cities.
Homelessness can affect many people for very different reasons, and what is needed is not just decent, affordable homes but wraparound care to meet a variety of needs and to prevent homelessness from happening in the first place. The crisis in homelessness cannot be overstated, but under this Labour Government we have the opportunity to end it, with the political will and a much-needed homelessness strategy.
We have heard the devastating data and statistics, particularly about children living in temporary accommodation. Those figures should shame us all, but particularly those rogue landlords. We need a homelessness strategy that tackles the disproportionate impact on black communities. Shelter’s report, “My colour speaks before me”, shows that from the moment black applicants engage with social housing, they face greater hurdles than white applicants.
We must move away from costly crisis-response strategies that rely on expensive and insecure temporary accommodation, and instead invest in decent, affordable, secure and permanent homes. A Labour Government can achieve this; we just need the political will to make it happen.
Steve Darling (Torbay) (LD)
Thank you for chairing this debate, Mr Efford, and I congratulate the hon. Members for Liverpool Wavertree (Paula Barker) and for Harrow East (Bob Blackman) on securing it.
Homelessness—what we see on the streets across the United Kingdom—is just the tip of the iceberg of the crisis in our housing system. For more than 30 years, I have campaigned on this issue while serving my local community. One of the sad pleasures is occasionally going out with our outreach team in Torbay and knowing that there is somebody going up to a person sleeping in a doorway, saying to them, “Hello, I’m from Torbay council. Would you like something to eat or drink, and how can we help?” That is extremely humbling, and I pay tribute to those members of staff.
Clearly, we have seen a massive reduction in our social rented housing stock—from 34% of housing stock when Thatcher came into power to just 17% now. In Torbay, only 7% of housing stock is social rented. The private sector has stepped up, but that leaves people with massive bills to pay for what is sometimes not the best housing. I pay tribute to some of those who pick up the pieces of this challenge: Kath from PATH, an excellent charity; Rev. Sam Leach and his team at St Mags who do incredible work supporting our street homeless; and also the Unleashed theatre, which won the King’s award for voluntary service, supporting homeless people across Torbay.
Massive cuts to the Supporting People budget were at the root of those challenges, and I am afraid to say that under the Labour Government, we have a quarter of a billion pounds of cuts to our NHS, our mental health service has lost £21 million, and the homeless and rough sleepers team in Torbay is being ripped out. Will the Minister intervene with the Devon Partnership NHS trust over the savage cuts that are leaving some of the most vulnerable people even more on the edges of our society in Torbay?
Rebecca Long Bailey (Salford) (Lab)
I thank the co-sponsors of this debate, my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) and the hon. Member for Harrow East (Bob Blackman). We start from a position where we have lost more than 260,000 social rented homes in the last decade. Even now, most so-called affordable homes are out of reach for the people who need them most. Ultimately, if we are serious about ending homelessness, we must give local authorities the power, funding and freedom to build social homes at scale.
That starts with looking at the affordable homes programme, which is sadly not enough. It too often delivers homes at supposedly affordable rents that, in many places, are anything but. Councils need grant rates high enough to deliver homes at true social rent so that ordinary families can actually afford them. While we are at it, we must lift the shackles from council borrowing and address the issues that councils face in meeting borrowing rules. From cuts to budgets, maintenance backlogs, right-to-buy losses and falling rent yields as local housing allowance fails to meet housing spend, housing revenue accounts are in a state of crisis and that must be addressed to remove barriers to borrowing.
We must also fix the planning system and rebuild council capacity. Decades of cuts have gutted planning departments and valuable experience has been lost. We must also rebuild those local housing teams and council-owned development companies that can plan for the long term and with social purpose at their core. Salford city council has led the way on that with its own model, Dérive, and that could be replicated across the country.
I know that the Minister agrees with much of that, which is why I am hopeful about her response. When we truly invest in council housing, we do not just end homelessness; we create jobs, strengthen communities, cut carbon emissions and give people a stake in their own future.
Clive Jones (Wokingham) (LD)
It is a pleasure to serve under your chairship, Mr Efford. I thank the co-sponsors of this debate, the hon. Members for Harrow East (Bob Blackman) and for Liverpool Wavertree (Paula Barker), for securing it.
Local housing allowance is meant to help people on low incomes afford private rent by covering the cheapest 30% of homes in an area, but it has been frozen for years while rents have continued to rise. The result is that housing benefit no longer reflects the real cost of renting, and thousands are struggling to keep a roof over their head with no extra support.
Getting a discretionary housing payment is not simple. Renters already face barriers such as needing guarantors or are discriminated against for needing extra help, and delays in securing support mean that many lose their homes entirely. Raising the local housing allowance alone is not enough, however, because without increasing the benefit cap, which has barely moved since 2013, many households would not see the full benefit.
My constituent, Yasmin, said that finding somewhere affordable that would also take someone on benefits was like finding a needle in a haystack and that the whole process was one of the worst times of her life. She was made to feel as though she was not even a human being. What Yasmin wants is what we all want: a safe, secure home that is affordable and has long-term stability. As she says, “I really hope we can have a country where this basic human right is accessible for everyone.”
It is time for a system that supports people, rather than leaving them behind. Will the Government act urgently to address the inadequate LHA rates, which have been frozen until 2026, and implement extra support that is not first come, first served, but designed to help everyone who needs it?
Nadia Whittome (Nottingham East) (Lab)
The UK’s homelessness crisis has been decades in the making. Thanks to Thatcher selling off social housing, a large proportion of our country is now at the mercy of private landlords—like those in my constituency who issued section 21 notices to three buildings on Mansfield Road, putting dozens at risk of homelessness.
Low pay and low levels of benefits compared with soaring rents make it even harder for people to access the private rented sector at all, and we have the scandal of children growing up in hotels. I welcome the Renters’ Rights Bill to shift the balance of power towards tenants and away from landlords, and the Government’s commitment to build 1.5 million homes, but we cannot rely on private house builders to build the genuinely affordable homes that we need. The Government must implement a mass public house building programme of homes for social rent.
When I was on the Levelling Up, Housing and Communities Committee, I repeatedly questioned the previous Government on why they refused to set a target on new homes for social rent. Our Government must set a target of at least 90,000 homes a year and ensure that they are built. Right to buy must also be scrapped. The action to tackle no-fault evictions in the Renters’ Rights Bill is essential, but landlords can evict by the back door by putting up the rent instead. We should be looking seriously at rent controls to stop the scandal of ever-growing rents gobbling up a higher proportion of people’s wages and costing a fortune in housing benefit—which, of course, needs to rise with rents; that is something the Government must commit to.
In the meantime, there are immediate steps that we can take to ease homelessness for those at the sharpest end while we tackle the structural issues. I was privileged to spend time with the street outreach team in Nottingham, who highlighted the need for more permanent shelters that are easier to access and that could support people with more complex needs. We also talked about the need for more housing like Grove House in Nottingham, which is made up of self-contained units for women with complex needs and provides wraparound support.
Josh Babarinde (Eastbourne) (LD)
I thank the co-sponsors, the hon. Members for Harrow East (Bob Blackman) and for Liverpool Wavertree (Paula Barker), for securing the debate.
Although Eastbourne might be the sunniest town in the country, its light and sun also cast deep shadows on our town, including through the temporary accommodation crisis and the out-of-area placements that make up 46% of placements in Eastbourne. In many circumstances, there are good reasons why out-of-area placements are appropriate—for example, for survivors of domestic abuse who need to relocate—but all too often, local authorities wrongly take “out of area” to mean “out of responsibility”. In such cases, local authorities leave vulnerable people stranded without the networks or support services that they need, and expect the receiving local authorities and charities to voluntarily meet those needs instead.
In Eastbourne, that trend is increasing. For example, two years ago, in October 2023, Brighton and Hove city council had 42 placements in Eastbourne; today it has 195. That is concerning because in January 2023, for example, a 25-year-old man, who was placed into the Eastbourne area from Brighton and Hove city council, was found dead, but in the month before he died, the council had undertaken no welfare checks. Earlier this year, two more people died in Wilmington Square. In Newhaven, part of the neighbouring constituency, that of my hon. Friend the Member for Lewes (James MacCleary), 10 people have died.
Shockat Adam (Leicester South) (Ind)
Does the hon. Member agree that being homeless should not prevent people from using primary care services, such as GP and dental practices, and the Government must support those practice providers as much as they can?
Josh Babarinde
I agree that the Government must provide support, but local authorities must do so too. I will come to that point shortly.
This summer, I wrote to the Minister’s predecessor to ask what intervention the Government could make in relation to out-of-area placement policy. In response, the Government said that they will review their out of area placement policy, including considering ways
“to further define where out of area placements are acceptable and expectations on placing and receiving local authorities.”
I welcome that, but could the current Minister confirm the timeline for it? Will she meet with Eastbourne borough council’s leader, Stephen Holt, and me to discuss it? In the meantime, will she also urge Brighton and Hove city council to take responsibility and ensure that it does not let down folks who are vulnerable and need its support?
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
I thank the co-sponsors of today’s ever-important debate, the hon. Member for Harrow East (Bob Blackman) and my hon. Friend the Member for Liverpool Wavertree (Paula Barker). As hon. Members have mentioned, homelessness is so much more than an individual not having a roof over their head; it is about the loss of safety, dignity and the often complex support that they need.
In Wolverhampton North East, for far too many years, we have seen the scale of the challenge, with the loss of social homes and increasing rents and mortgage costs. We have also seen the strength of our community’s response. In Wolverhampton, homelessness rates are exacerbated by those stuck in temporary housing and the “unofficial homeless”, who manage by sofa surfing. More than 600 children are growing up in temporary accommodation, and hundreds of families are living with uncertain housing situations.
The number of people sleeping rough in Wolverhampton is relatively low, with around eight recorded last autumn, but I want to share one such story from my constituency. Due to a local shopkeeper called Max, who could not turn a blind eye, the community of Wednesfield and I became aware of John, who had found himself sleeping rough on Wednesfield High Street. He had lost almost everything: his home, his ID, access to social security benefits and hope that anyone cared. But then something remarkable happened: members of the community, led by Max and including Sharon, John Paul, Sherrie and Jade, came to help him. I was deeply moved by that, and with my team and the support of P3, a fantastic national charity with roots in Wolverhampton, helped him rebuild his life.
Emily Darlington (Milton Keynes Central) (Lab)
My hon. Friend is making a fantastic speech. Does she agree that supporting people from rough sleeping into solo accommodation involves a continuum of support from the charity and public sectors? That creates the system that holds people up and supports them, with trauma-based support at its heart.
Mrs Brackenridge
Absolutely. We have to heal the person and the family and respond to their situation, rather than simply securing a safe home, although that is of course important too.
Finally, I put on record my thanks to Wolverhampton’s wonderful community services, including the Good Shepherd, P3 and the Alternative Giving initiative, which gives 100% of donations directly to organisations and charities that work in Wolverhampton city centre to provide long-term support for those who need it.
Andrew George (St Ives) (LD)
There is no time for courtesies. Homelessness is one end of a continuum that starts with thousands of wealthy people purchasing holiday and second homes in places such as Cornwall and ends with 5,000 people annually presenting to the local authority as at risk of or experiencing homelessness. For a number of years, I led the Street Food Project in Penzance and saw these issues at close quarters, speaking to the people involved and those experiencing homelessness. It was a very distressing picture, and it continues today.
The other contrast I want to draw attention to is the fact that £500 million of taxpayers’ money is provided through small business rate relief in Cornwall to holiday home owners, subsidising the second homes of the wealthy. If we put that money into housing to meet the needs of those who are homeless and in housing need, we would solve this problem overnight. We need to address that inequality.
I wish I could draw attention to the good work the local authority is doing and to the outcomes of that work, but I want to ask the Minister about the housing benefit subsidy loss that local authorities experience when they put people into bed-and-breakfast accommodation. They only receive housing benefit for that accommodation, and that needs to be reviewed.
I agree with the hon. Member for Harrow East (Bob Blackman) that we need to reward the good landlords and not just regulate the bad ones. We also need to address the perfect storm in the construction industry, which has resulted in us not being able to get on and deliver the shovel-ready projects that are available to the Government. They are going forward with the Renters’ Rights Bill, but it will take another four or five years to get those new developments off the ground. They could do that now.
Dave Robertson (Lichfield) (Lab)
It is a pleasure to serve with you in the Chair, Mr Efford. I thank my hon. Friend the Member for Liverpool Wavertree (Paula Barker) and the hon. Member for Harrow East (Bob Blackman) for securing the debate, and the Backbench Business Committee for scheduling it. Last week, my hon. Friend and I had the privilege of speaking at events hosted by Standing Together Against Domestic Abuse and the Domestic Abuse Housing Alliance. It is so important that we bring domestic abuse into this conversation, because it is the leading cause of homelessness for women in this country.
However, the real reason I am here today is my constituent Caitlin. Caitlin is a survivor. She was in a relationship that turned abusive, and unbeknown to her family she was coerced into co-signing a lease for a flat with her abuser, naming herself as guarantor. Four days after she signed that lease, he was arrested, charged and later convicted. Caitlin has never lived in that flat, but despite her former partner’s conviction, there was no way to release her from that contract. He refused to pay rent, as another way of exerting control over her, and that put Caitlin at huge financial risk. It took until last week to resolve the issue, with months of back and forth from my office, and eventually the threat of legal action, before the agent backed down. There was no compassion and no understanding, and Caitlin knew things could have been much worse if she did not have a supportive family.
I am proud that the Renters’ Rights Bill will take us a step closer to solving that problem by doing away with shorthold tenancies, but there is a lot more we need to do. Standing Together and DAHA have pioneered the adoption of what they call the whole housing approach, and last week they published the findings of a trial in Cheshire East. It was astonishingly successful, preventing 98% of the women involved from becoming homeless, up from 63% before the pilot began. What consideration is the Department giving to expanding that approach across the country?
Under that approach, Standing Together and DAHA have also developed a new accreditation targeted at the private rented sector, and I want to see a trial of that new accreditation fully funded. I have written to the Secretary of State, and I would love to hear from the Minister what the consideration the Department will give to funding the next stage of that pilot.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Efford. I thank my hon. Friend the Member for Liverpool Wavertree (Paula Barker) for her tireless work on the APPG, and the hon. Member for Harrow East (Bob Blackman) for his work on this topic. It was hard to disagree with much of what he said in his speech, which is testament to the cross-party commitment on this issue and the growing political consensus that ending homelessness really is possible.
It is a source of great shame that the centre of our capital is also the centre of homelessness. Last year, there were 2,612 people living on the streets in the City of Westminster, and 878 in the City of London. Last year, Westminster city council spent £95 million on temporary accommodation costs, and the City of Westminster’s costs have gone up by 50%.
I believe that we can tackle the causes of homelessness and that this Government are tackling the causes of homelessness. We are ending no-fault eviction and supporting vulnerable people, and I welcome the additional £2.35 million the Government have invested in homelessness services in Westminster, such as The Passage, St Mungo’s, King George’s Hostel, the Single Homeless Project and St Martin-in-the-Fields. We are bringing forward solutions, and we can prevent homelessness, but I ask the Minister to consider the impact of the local connection test and the cost for local authorities and homeless families.
Ending homelessness is the right thing to do. We cannot accept children living in hotels, we cannot accept vulnerable people living on the streets and we cannot accept the damage that homelessness does to families, communities and our economy. We can end homelessness, and we look forward to the cross-departmental homelessness strategy and its proposals.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
I thank the hon. Member for Harrow East (Bob Blackman) and my hon. Friend the Member for Liverpool Wavertree (Paula Barker) for securing this important debate.
I am angry and frankly embarrassed that I am here today to discuss the deepening homelessness crisis in Scotland, which is inseparable from the scandal of rising child poverty. After nearly two decades in power, the SNP has presided over that crisis; in fact, the Scottish Government fuelled it by cutting the affordable homes budget by £200 million, or 26%, despite mounting political pressure to declare a national housing emergency, which they finally did. The fact that the SNP failed to respond to that growing crisis over years with either urgency or even compassion demonstrates its lack of leadership; quite simply, it was abandonment. After 20 years of the SNP, Scotland has nothing to show, only a national disgrace: rising homelessness, rising child poverty and a Government who have lost their way.
As of March 2025, over 34,000 households in Scotland were assessed as homeless or at risk of being homeless— the highest number in over a decade. Temporary accommodation figures also hit a record high, with over 17,000 households—a 6% rise—affected. That is a scandal.
Behind those numbers are children. Over 10,100 children were living in temporary accommodation, with no home to call their own—young lives in limbo, with no stability, no security and no dignity. A further shocking fact is that 242 people died in 2023 while homeless, half of them under the age of 45. Some of those deaths were linked to drugs misuse—another crisis the Scottish Government have failed to address. These are not just policy failures; they are moral failures.
The SNP has lost sight of why it was elected. It has no solutions and no answers. Frankly, Scotland demands better from its Government: bold, radical policy, investment, leadership to end the scourge of homelessness, and temporary accommodation to restore stability, security and dignity for every homeless child and adult.
Rachael Maskell (York Central) (Ind)
It was Rowntree’s work on poverty in York that gave rise to the 1919 Housing Act, which addressed homelessness. It is in this rich tradition of social reform in York, and in order to reduce poverty and inequality, that executive member, Councillor Michael Pavlovic, with his vast experience, dedication and determination, and Labour’s City of York council are today leading the way, along with academic Nicholas Pleace, who leads on housing first, and looking at how to integrate a person-centred, trauma-informed pathway delivered by multidisciplinary, multi-agency approaches. This is pragmatic, but we also need the supply, including of one-bed flats, to ensure that social housing is available, so that services such as mental health and substance dependency services can be integrated. We also need to recognise the complex and varied causes of homelessness.
Wrapping services around somebody in their own home not only provides a practical pathway out of homelessness, but builds resilience, independence and dignity. Wider support can also ensure that people have new levels of security. Barriers to accessing health and social care can contribute to high numbers of preventable deaths. Involving partners in ensuring wellbeing and physical health, which the Salvation Army has done in setting up a new boxing gym in the city, will improve people’s holistic outcomes. As many have highlighted today, focusing on the causes, but also on the opportunities to support women and children out of homelessness, must be a first step. The governance arrangements being introduced in York will ensure that city partners hold the authority to account through multi-agencies. With York on a new cutting-edge path from homelessness to hope—one rooted in evidence and best-practice approaches—I invite the Minister to meet the team in York, the university partners and clients too.
Gideon Amos (Taunton and Wellington) (LD)
It is a pleasure to serve with you in the Chair, Mr Efford. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this debate and on all the work he has clearly be done in this area—of course, the fact that he is Chair of the Backbench Business Committee has absolutely nothing to do with the compliments I am giving him. This is an important debate, because homelessness touches every part of the United Kingdom, in every local community, and everyone who believes, as the Liberal William Beveridge did then, and we do today, that homelessness and poor housing are part of the giant of squalor and need to be defeated. Unless people have the shelter of a decent home, they cannot be truly free to lead the fulfilling lives they wish to lead.
The level of homelessness today has rightly been termed a crisis by the Housing, Communities and Local Government Committee, and it is one that demands our attention and our action. Across England, over 117,000 households were living in temporary accommodation at the end of March 2024, including more than 151,000 children. That is a fail of national proportions. While the issue might be most visible in urban areas, rural homelessness has risen by 40% over the past five years, leaving many without access to services or support. In my county of Somerset, over 12,000 households languish on the waiting list and are unlikely to get the homes they need, after decades in which we have lost millions of council houses, which were never replaced—4.3 million sold off since the 1980s, part of a net loss of 2.2 million social rent homes in this country.
But statistics, of course, do not tell the whole story. Take Ed, who is in his 50s, came to my surgery. He is living in his car, trying to hold down a good job as a lorry driver, but not one good enough to be able to afford a home near his family in Taunton. Take Mary, who is sharing her bed with her teenage daughter, while her younger daughter shares the only other bedroom with her grandmother; or the young mum and baby who had all their belongings put on the pavement outside their hotel on a Saturday morning, when they were turned out with nowhere to go. These are the real casualties, and far too many of them are children.
Councils struggling with the rising costs of the care crisis and special educational needs system are often unable to devote the resources to homeless people that are needed. That is why the Liberal Democrats have, among other things, called first and foremost for a cross-Whitehall plan to end all forms of homelessness—an approach that co-ordinates action across Departments, ensuring that solutions are integrated, effective and comprehensive. The interministerial group recommended by the Select Committee would therefore need to take forward a homelessness strategy, which we urge the Government to deliver as soon as possible.
Secondly, a cornerstone of our approach must be a “somewhere safe to stay” legal duty, to ensure that anyone at risk of sleeping rough can have shelter. That would provide a realistic basis for restoring stability, rebuilding trust and giving people the support they need to move forward with their lives. That is something that the nearly 4,000 veterans found to be homeless in England particularly deserve, in addition to the decent homes standard for forces’ families, which we are delighted to be helping to bring into legislation in the Renters’ Rights Bill this week.
Thirdly, the Liberal Democrats would abolish the two-child benefit cap—something brought in by the Conservatives in 2017, once the coalition was no longer there to moderate their instincts. No child should bear the consequences of such an arbitrary financial restriction. Fourthly, those experiencing homelessness should be exempt the indignity of only being allowed the shared accommodation rate, because forcing vulnerable people into unsuitable sharing only exacerbates the risk of them returning to rough sleeping and undermines their security. Fifthly, councils must be empowered and properly funded to provide safe accommodation for survivors of domestic abuse, to ensure that escaping violence never has to mean making oneself homeless.
The housing support system is also failing those in need. The housing support allowance has not kept up with inflation and has not been increased for some years, leaving many unable to meet rent costs and at higher risk of homelessness. The Liberal Democrats would restore it to the 30th percentile of local rents and ensure that it was automatically uprated against that benchmark every year in future, so the support keeps pace with the reality of the housing market. That is a simple but vital reform, preventing families from slipping through the cracks simply because a policy has failed to keep up with rising costs.
Recent Government funding announcements have, of course, been welcome in principle, but they must be judged by their impact. The previous rough sleeping initiative was replaced by the rough sleeping prevention recovery grant, yet in Somerset this amounted to a 0% increase on 2024-25 levels, or a real-terms cut. That must not happen again. More fundamentally, local authorities must be equipped to deliver permanent accommodation, to integrate medical, social and emotional support, and to provide a permanent pathway out of homelessness, not merely a temporary respite, not least to escape the rip-off of hotels and private B&B landlords draining public funds from hard-working taxpayers.
Housing supply therefore remains crucial to this whole challenge. In Somerset, we urgently need more accommodation suitable for homeless people and more follow-on accommodation. That needs to be tackled by unlocking more council sites and speeding up delivery. Ultimately, it does need more funding. In parts of Somerset, such as Minehead, my Lib Dem colleagues are building the first new council houses there for a generation and have just announced another £40 million for more council houses. However, local young families deserve genuinely affordable council and social rent homes in far greater numbers. Liberal Democrats would therefore build 150,000 new social homes a year, and in our manifesto we included a £6 billion a year investment to get up to that level of delivery. For the generation locked out of home ownership, we want to see a generation of rent-to-own houses, where renters gain ownership after 30 years or can port their equity if they move sooner.
We have long called for a statutory target of 150,000 new social homes a year, so it is disappointing the Government propose only 20,000 social homes a year and are relying far too heavily on private developers to fix a crisis that is not in their remit. Liberal Democrats also propose an £8 million a year emergency upgrade programme to ensure that homes are safe, warm and energy efficient, tackling fuel poverty by cutting energy bills. Only by addressing housing and energy insecurity together can we prevent homelessness before it begins and support those already at risk.
Homelessness is preventable. It is a product of policy changes, neglect and underfunding. Councils like Somerset have just committed to an ambition to achieve 1,000 affordable homes a year, but what it and other councils need from the Government is support that is meaningful, sustained and accountable. Last year the Shared Health Foundation found that between 2019 and 2024, in just one Parliament, 74 children died in temporary accommodation. Not only that, but temporary accommodation was officially cited as a contributory factor in those deaths. I am sorry to say that 58 of those children who died were babies under the age of one. Let us ensure that this stops and that next winter does not see the tragic ending of the life of even one more rough sleeper, or one more family deprived of safety and stability. Liberal Democrats will fight to ensure that homelessness and poor housing are no longer a crisis but are consigned to the past, a chapter in Britain’s history, as William Beveridge intended.
Gareth Bacon (Orpington) (Con)
It is a pleasure to serve under your chairmanship, Mr Efford, and to take part in this debate about the progress on ending homelessness. I thank my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Liverpool Wavertree (Paula Barker) both for securing this debate and for their opening remarks. I know that both those hon. Members have made combatting homelessness a central part of the force that drives them in Parliament. As we have heard, their excellent work as co-chairs of the all-party parliamentary group for ending homelessness has been solid, earnest and methodical, and has produced robust conclusions. My hon. Friend the Member for Harrow East in particular has made a demonstrable difference in this field, with his 2017 private Member’s Bill, which went on to become the Homelessness Reduction Act 2017, which I will refer to shortly.
I do not doubt that all Members gathered here today share a strong desire to end rough sleeping and homelessness for good. Homelessness is a social tragedy, wherever it occurs and for whatever reason. No one in our society should be forced to live on the streets, and it is incumbent on us all to do our best to ensure that constituents can live in a safe, decent and secure home. Although progress was made to that end under the previous Government, work remains to be done, as my hon. Friend the Member for Harrow East said in his opening speech. I offer my full support to the Government for their shared desire to end homelessness once and for all.
As policymakers have increasingly come to appreciate, homelessness does not simply begin at the point someone finds themselves on the street; rather, it is rooted in long-term causes, whether persistent issues with mental health or substance abuse, offenders stuck between prison and the streets, with no place to go, or young people in care leaving the system without a fixed destination. The Homelessness Reduction Act 2017, sponsored by my hon. Friend the Member for Harrow East and implemented by the previous Government, recognised that fact in law, placing an enhanced duty on local authorities to intervene at an early stage in an effort to prevent homelessness from occurring. Over 740,000 households have been prevented from becoming homeless or were supported into settled accommodation since the introduction of the 2017 Act—an achievement that should be acknowledged.
As my hon. Friend the Member for Harrow East and the hon. Member for Liverpool Wavertree said in their opening speeches, prevention must be at the heart of any national strategy for tackling homelessness, which is why I welcome the Government’s decision to continue the previous Administration’s approach of offering more effective support to prevent rough sleeping from happening in the first place. At the heart of the previous Administration’s approach was the rough sleeping initiative, which saw pioneering work across society between local authorities, voluntary organisations and healthcare providers to tailor support where homelessness occurs, meeting the individual needs of people facing homelessness and helping them to build an independent life once off the streets.
Ending rough sleeping for good will require a whole-Government and a whole-society effort to be achievable, which is why it is vital that there is a sense of purpose from the very highest levels of Government to drive change. Although the Government’s ambition to carry on this work is laudable, it is disappointing that the full cross-Government strategy for ending homelessness that they promised in their manifesto has yet to emerge, despite repeated promises from Ministers of its publication.
Commentators such as the Institute for Government have already warned that a lack of co-ordination between Government Departments is undermining progress when tackling homelessness, preventing public bodies from working together to be proactive and focus on the root causes of homelessness. The previous Government’s “Ending rough sleeping for good” strategy brought together seven Departments from across Government to that end. I fear that, without a similar statement of intent from the current Government, their approach to ending homelessness will fall short and fail those in need.
The consequences of the lack of clarity are already becoming clear, not least in the effects of the Government’s Renters’ Rights Bill on the housing market. Although Ministers and Labour Members continue to claim that that legislation will make it easier to find a home, the message from the private rented sector appears to be quite the opposite, with 41% of private landlords saying, at the end 2024, that they were planning to sell their properties. The Government’s proposals look set to cut supply in the private rented sector, which will in turn inevitably risk driving rents up and making it harder for people to find a rented home. That is exactly what we have seen in Scotland, where similar measures to what the Government are proposing were implemented in 2017.
In England, we have already seen a seven-year drop, with Savills reporting that the number of rental properties on its books dropped by 42% in quarter 1 of this year compared with the same period in 2024. That means 42% fewer homes available for families, less choice and more pressure on rents. That is not theoretical; it is happening now, and the Renters’ Rights Bill is accelerating that trend.
Of equal concern is what effect an increasing number of people who are unable to rent privately will have on the temporary accommodation provision. An accessible private sector is vital to providing the housing stock that reduces homelessness pressure. If the Government are serious about reducing the demands on local authorities for temporary accommodation, they need to do far more than simply announce stop-gap measures. That is especially pressing, as has been repeated during this debate, when 172,420 children in England are living in temporary housing, which is up 7.6% on this time last year.
Only by making a concerted effort to reduce the cost of living and make private housing more affordable will the Government get people out of temporary accommodation and into long-term secure homes of their own. Sadly, the signs on that front are not encouraging, and the same goes for the Government’s plans to deliver 1.5 million homes. The most recent estimates for additional net dwellings for 2024-25 show the Government on course to miss their house building target by more than 100,000 homes this year.
According to the Institute for Fiscal Studies, the latest spending review, which promised more funding for the affordable homes budget, is less generous than on first appearance, with funding hardly different from previous levels. I am sure hon. Members will agree that Britain desperately needs new affordable homes to ensure the long-term supply of housing for those currently without a place to call their own. That is why under the previous Government, 800,000 people bought their first home, through schemes such as Help to Buy and stamp duty relief.
Yet in the current economic climate, more social and affordable homes look increasingly difficult to deliver. Ending homelessness must not be simply an idealistic ambition, but a clearly defined goal, with policies set out to achieve it. None of that is possible without a clear vision of what steps need to be taken. I urge the Government finally to publish—
Gareth Bacon
With great respect to the hon. Gentleman, given that I have to allow time for the Minister and the two proposers to speak, I cannot give way.
I urge the Government to finally publish the strategy in full and provide much-needed clarity to the individuals and organisations on the frontline of tackling homelessness about how they plan to support them to do so. No amount of good intentions or Government interventions can compensate for the unaffordable economic reality facing those trying to find permanent housing. I further urge the Government to consider the long-term consequences of many of their housing policies. A private rented sector, where supply is driven out of the market by over-regulation and costs that continue to rise, can lead only to even more people being unable to find a secure place to live—a fate the Government must do everything they can to avoid.
I end my remarks by calling on the Minister to respond more quickly and effectively to ease the temporary accommodation issue, to work with local communities to supply good-quality homes for families, and to publish the homelessness strategy, which was promised more than a year ago.
The Minister for Local Government and Homelessness (Alison McGovern)
It is a pleasure to serve, as ever, under your chairship, Mr Efford. I thank my hon. Friend the Member for Liverpool Wavertree (Paula Barker) and the hon. Member for Harrow East (Bob Blackman) for their excellent co-chairing of the all-party group and for bringing this business to the House today. I hope it can be reported back to the Backbench Business Committee that 17 Back Benchers contributed, that hon. Members across the House care deeply about this issue, and that it would be good to have more parliamentary time dedicated to this important subject.
It is clear from this debate that there is appetite across the House to get this right. The APPG’s recent report provides excellent food for thought, as we complete the homelessness strategy, and I am grateful for it. I am going to get into serious trouble, but I have checked my diary for 1 o’clock on 11 November and, as far as I can tell, I am free—my diary manager can hate me later, but I think that is a date. I look forward to spending more time discussing the homelessness strategy with colleagues in the all-party group.
I never fail to feel lucky when I get home to Rock Ferry, where I live, and shut the front door. I have seen the consequences of homelessness on enough people in my life to know the fear it brings. Hon. Members in all parts of the House, as we have heard, care deeply that the Government have a plan to bring down levels of homelessness. I am hopeful that we can all work together on that. In opposition, it took me the best part of a decade to get a small number of new homes built in a derelict part of my constituency. That was not good enough. Things have to change. We can all see the number of people sleeping rough on our streets growing. The last annual count of people sleeping rough, which many have mentioned, was two and a half times higher than it was in 2010. It is not good enough. It has to change.
There is even more homelessness that we cannot see: the record number of people in temporary accommodation. It has been heartening recently to see a small amount of progress in our efforts to reduce the number of families and children in B&B accommodation, with the latest stats showing a drop—but I cannot say anything other than the facts: children living in B&B accommodation has to be brought to an end. Even if we have seen a small drop, it is not yet good enough.
That is why earlier this month the Government announced £84 million additional funding this year for homelessness and rough sleeping, bringing our total investment to record levels—more than £1 billion, and an increase of £316 million on the previous year. Our spending includes more than £644 million for the homelessness prevention grant, and more than £255 million for the rough sleeping prevention and recovery grant. That is a big investment, but, as Members have mentioned, we need a whole-of-Government approach. I will cover that in a moment. but I must also make the point that we will decriminalise rough sleeping by repealing the antiquated Vagrancy Act 1824.
Mr Jonathan Brash (Hartlepool) (Lab)
Throughout this debate the issue of community has been raised repeatedly. A challenge we face in my constituency is the fact that local authorities in other parts of the country often discharge their homelessness duty by packing families into taxis at short notice and moving them hundreds of miles to places where they have no connection with the community. That is bad for the individuals and bad for the communities such as Hartlepool. Does my hon. Friend agree with me that we have to end that practice in order to solve homelessness effectively?
Alison McGovern
That question was raised in the debate, as my hon. Friend rightly says. We are keeping the homelessness code of guidance under review, which includes the issue of out-of-area placements. I am particularly concerned about disruption to children’s education; if any Member wanted to give me specific examples that can feed into the homelessness strategy and demonstrate what is wrong, I would welcome that. I hope that also answers the questions raised about reviewing the guidance.
Separately from the funding that I just mentioned, we are also providing a huge investment in the local authority housing fund, which is there for councils to buy better accommodation and stop using expensive bed and breakfast hotels. That funding, we think, can get us up to 5,000 extra homes. Councils need funding certainty and flexibility to provide appropriate support to those who need it, which is why this Government are providing the first multi-year funding settlement in a decade. We are simplifying our approach to funding local government so that it can work flexibly to deliver on our shared priorities and make sure that people who need accommodation and support get it.
Numerous colleagues asked about multi-year funding. It is absolutely crucial, which is why we are providing it to councils, and I will work with organisations to make sure that we get more stability in the system. Those are the things that are happening already, but I know we have to go further. Later this year we will publish our long-term homelessness strategy.
My predecessor, my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali), did a great amount of work, on which I will build. We have heard from colleagues that there is a deep understanding of the importance of prevention, so I want to get this done as quickly as possible. We need to get that strategy out of the door and into the action and delivery phase. I say to colleagues, “Work with me to make sure we can get it done as quickly as possible.”
A couple of colleagues asked about the inter-ministerial group. I have already spoken to some ministerial colleagues on that group. We will meet formally very shortly, and I am sure those meetings will keep going—as colleagues have said—under the chairship of the Secretary of State. There are areas, including the strategy to reduce violence against women and girls, the child poverty strategy and our house building goal, where that homelessness strategy will need to connect with the other bits of work that the Government are doing. I am very seized of that. Colleagues will know that I spent some significant time working on the child poverty strategy, so I feel able to hit the ground running and work with my colleagues, the Safeguarding Minister, the Housing Minister and Health Ministers, to make sure that we get this done in a good way and as quickly as possible.
Liam Conlon (Beckenham and Penge) (Lab)
I welcome the Minister to her place. Part of what she mentioned is subject to the ongoing fair funding review, and the index of multiple deprivation is part of that. Alongside a number of London colleagues, I would like that to fully reflect housing costs and the impact of homelessness. Once housing costs are factored in, London has the highest rate of poverty in the country, with one in four households in poverty. Some good movement has been made on the positive indication of the income domain, but currently the fair funding review would give the same weightings to homelessness as to distance from a post office. Would the Minister meet with me and others—and I know that she has offered time later—to discuss that and to ensure that the formula reflects the cost of housing in London?
Alison McGovern
I thank my hon. Friend for his question. I am sure I will be meeting a lot of hon. Members regarding the fair funding review—he should not worry about that. I hear the point he makes about the indices of multiple deprivation, and we will have more to say about it very shortly. I know the situation in London only too well from my work over the past year. It is important to make sure that children in London do not grow up in poverty. The strategy we will publish on homelessness will get to the heart of the problem, with more homes incorporating all the work that we have done to change planning.
My hon. Friend the Member for Salford (Rebecca Long Bailey) mentioned planning officers. It is crucially important to get investment there so that we get those homes built. We also need to bring the Renters’ Rights Bill into effect, so that we can abolish section 21 evictions and prevent private renters from being exploited and discriminated against. The hon. Member for Orpington (Gareth Bacon) mentioned the effect of regulation; I wonder if he would support any regulation, because of the argument that we might reduce supply. Nobody wants over-regulation, but are we really saying that renters in this country are not vulnerable and in need of more protection? Most people think that is not right. I will work with him to make sure that we do all we can to get it right, but we have got to take a balanced approach.
Josh Babarinde
I will be quick. I want to repeat my questions from earlier on the subject of regulation. I asked earlier what the timeline was for out-of-area placement review, whether the Minister would meet me and Eastbourne borough council to discuss it, and whether she will urge Brighton and Hove city council to step up with their responsibilities. Can the Minister address those questions?
Alison McGovern
I did mention keeping the matter under review and, as I said, I am sure that we can meet to discuss it.
Prevention must be at the heart of our strategy. We heard that from the APPG’s report and I agree with it. That is why we are making record investment into prevention services and why the spending review protected that funding for the next three years. We have done work on top of that to increase it, because it is so important and such a crisis at the moment. As hon. Members have said, however, sometimes housing alone is not enough to tackle homelessness; people need support that is appropriate for their needs to sustain that accommodation. For some people, that means supported housing. Good-quality supported housing can prevent further cycles of homelessness and help people to get back on their feet.
I know that we have more to do to make sure that the supported housing system is functioning properly, and we are not stuck with some of the problems that the hon. Member for Harrow East mentioned. We are acting to implement the measures in the Supported Housing (Regulatory Oversight) Act 2023. We consulted on locally-led licensing and new national supported housing standards for support and changes to housing benefit, and we will publish our report as soon as possible. I look forward to discussing that further—on 11 November, if not before.
We will press forward with the duty for local authorities to produce supported housing strategies, and guidance will come early next year. These strategies will help local authorities to understand how much and what type of supported housing they have, and identify where their unmet need is. A couple of Members correctly mentioned support for victims of domestic abuse and refuge providers. We want to take action on that; I have spoken to the Minister for Safeguarding and we anticipate working together on it.
We know that we cannot fix the housing crisis overnight, and that we have to act now to support people who are facing the worst forms of homelessness. That is why we are ensuring that people in temporary accommodation today are in accommodation that is suitable for their needs. I say again that we still have the underlying causes of homelessness—not enough homes and insufficient incomes—and a real crisis in rough sleeping and long-term rough sleeping, as mentioned by my hon. Friend the Member for Liverpool Wavertree. I agree that this is a desperate situation that needs attention through the strategy.
Coming into this role, I have been utterly shocked by the situation regarding the use of B&Bs and our children. That is why we are working with the 20 local authorities with the highest level of bed and breakfast use for homeless families to identify solutions that actually work for their local circumstances. Backed by £8 million-worth of funding, the emergency accommodation reduction pilots will kick-start new initiatives to try to find the best possible way to get families into better accommodation. Whether through local authorities expanding what they are able to provide because of the investment we are giving, or preventing the use of B&Bs in the first place, we are working hard to try to make that happen.
I will finish there, as we will have more opportunities to discuss this issue. I welcome the involvement of all colleagues, and I stand ready to work with everybody on it. The Government inherited a crisis. We have tried to make some progress quickly, and I hope that colleagues will see that I have wasted no time in getting more money to local authorities to help now, while we complete the strategy. In the end, the long-term approach is what we need. I thank again my hon. Friend the Member for Liverpool Wavertree and the hon. Member for Harrow East for securing this debate and setting out that case.
I look forward to working with all Members in this House on our shared goals. No one in this House can be comfortable while our fellow citizens experience such discomfort. None of us believes that our future is secure while our children live in poverty. I do not think that anybody who has taken part in this debate will rest until those injustices are brought to an end.
Bob Blackman
I thank the Minister for her response, and I thank Members for, by my reckoning,18 speeches and four interventions, which demonstrate the importance of this debate. Through the Everyone In programme, we proved during covid that it is possible to solve homelessness and rough sleeping. Unfortunately, that programme was not built on afterwards to end rough sleeping.
Given some of the things that Members have added to the debate, I point out that the law exists to prevent local authorities from pushing homeless people far away from their homes, particularly if they have children or jobs. The law is in place; what is needed now is a coherent cross-Government strategy to combat homelessness, so that we can end it once and for all.
I thank you, Mr Efford, for your chairmanship, and I apologise to colleagues who were short-changed in terms of time. That demonstrates the importance of this debate, and how we need to have another debate on the issue in the near future.
Question put and agreed to.
Resolved,
That this House has considered progress on ending homelessness.
Electricity Infrastructure: Rural Communities
(1 day, 23 hours ago)
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John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I beg to move,
That this House has considered the impact of electricity infrastructure on rural communities.
It is a pleasure to serve with you in the Chair, Mr Efford. I am delighted to have secured this important debate, as it is an issue that affects many communities across our United Kingdom. However, it particularly affects the Scottish Borders and other parts of Scotland, such as the highlands. Frankly, the Borders are being inundated with plans for new energy infrastructure: wind farms, solar farms, battery energy storage units and mega-pylons.
This weekend, I joined other concerned local residents on Lauder Common, near Threepwood. It is a beautiful part of the Scottish Borders, an area of unspoilt landscapes and natural habitats that Scottish Power Energy Networks plans to destroy with a new electricity substation linking giant mega-pylons.
From a vantage point on the southern upland way, we were able to look over the award-winning Threepwood Moss, a special area of conservation and home to curlews. Threepwood Moss is at risk from major construction works for the new electricity substation, a battery energy storage system and a nearby solar farm.
The total site will cover approximately 24 hectares, which is equivalent to around 40 football pitches. This is at the heart of what is called the cross-border connection, which would see more than 75 km of overhead lines installed across the Scottish Borders, looping through the new substation near Lauder—called Gala North by Scottish Power Energy Networks, which I will call SPEN for the rest of this debate—and down to a second proposed substation south of Newcastleton.
Several hon. Members rose—
John Lamont
I will take interventions, but I will make a little more progress. Patience, colleagues!
It means giant mega-pylons running through communities and landscapes across the Scottish Borders. We all understand the need for a modern, resilient electricity network, but there must be a balance. It must be done in a coherent and organised way that does not come at the expense of our rural environment or the wellbeing of our communities. This project is deeply unpopular with local people and will do huge damage.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Does the hon. Member agree that it seems strange that the proposed grid upgrade in Scotland does not take into account the future of nuclear power which we understand will be developed right across the UK?
John Lamont
I share the hon. Member’s concerns, and I will come on to nuclear a little later.
Ann Davies (Caerfyrddin) (PC)
In my constituency, pylon proposals are causing huge distress among our rural communities. They will not bring any real benefit to those communities. In fact, developers often bypass the rights of landowners, and the proposed developments will ruin our beautiful landscape. Does the hon. Member agree that electricity infrastructure anywhere must be done with communities, not to them?
John Lamont
The hon. Member makes an excellent point about taking communities with us. We all accept, I believe, the need to invest in our electricity infrastructure, but it must be done in a coherent way that takes local communities with us.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Would the hon. Member agree that transmission line operators should consider the impact on local communities by leaving legacy housing, employing graduate apprentices from the area and not swamping local villages with workers’ camps?
John Lamont
The hon. Member makes a key point, which I will come to later, that often these projects generate many jobs while the developments are being constructed, but the jobs disappear as soon as they are finished. That is unlike nuclear power, which the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned, with 300 jobs in Berwickshire alone directly connected to Torness power station. Those are permanent jobs, for people living and working in the local communities. We do not get the same employment opportunities with some of the current proposals for energy infrastructure.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman is right to mention resilience and modern technology. I declare an interest as a member of the Ulster Farmers Union. The National Farmers Union and the UFU have indicated that infrastructure needs to be upgraded to ensure that whenever storms come, there will not be loss of electricity or broadband outages. Does he agree that we must ensure the livelihoods of our rural constituents and their businesses when we look to the future?
John Lamont
The hon. Member makes a key point about the need to invest in the electricity network, but it needs to be done in a coherent and organised way with buy-in from the local communities. That is what is lacking dreadfully with some of the proposals.
I will make some progress. The issues are clear. First, the proximity of pylons to people’s homes will impact their quality of life and the visual amenity of their community. Secondly, our countryside will be scarred, damaging tourism and leaving businesses that are already badly suffering out of pocket. It will also damage our environment and natural habitats. Agricultural land will be damaged or lost, impacting farms, reducing the amount of produce made in the Borders and harming our drive for food security. We are not saying that we do not want any energy infrastructure—we already have a lot in the Borders. It is about finding the right solution that protects our rural communities.
Harriet Cross (Gordon and Buchan) (Con)
I thank my hon. Friend for his contribution. Although he is speaking about the Borders, we are seeing something similar in the north-east. We have a huge amount of energy infrastructure across our region, whether that be pylons, batteries or substations, and the communities feel like things are being done to them. Our agricultural land is vanishing. Housing are having substations put right outside—I have heard from one household who have a substation right outside their child’s front window. There is no planning or organisation. Things are being imposed on communities who have very little say. The ways in which consultations are done are not up to scratch. It seems that there is nothing communities can do to have a say and actually be heard.
John Lamont
My hon. Friend is demonstrating what a doughty campaigner she is for her constituents in the north-east of Scotland. I agree with everything she has said, and I will develop some of those points.
Wendy Morton (Aldridge-Brownhills) (Con)
We have a similar issue in the west midlands, although it is not entirely a rural area. On the edge of Birmingham in my constituency, battery energy storage systems are being imposed upon local communities. What was green belt is now being defined as grey belt. Local communities feel that they get all the pain and no gain, and they have no say at all. Does my hon. Friend agree that it is time for the Government to sit down and have a real rethink?
John Lamont
My right hon. Friend is right. She has consistently raised this issue in the Commons, and I know how passionately she feels about it on behalf of her constituents. I will come on to battery storage shortly.
It is important that alternatives are considered. For example, rather than overhead cables, why is underground cabling not being considered? That proposal has been simply dismissed on cost. [Interruption.] I have a lot of time for the Minister, but he is dismissing these concerns out of hand. He is laughing and scoffing. These are real concerns that my constituents feel passionately about. I would be grateful if he showed the same respect that I give to him for the concerns that I am raising on behalf of the people of the Scottish Borders, the highlands and the north-east of Scotland. These concerns are legitimate and I would be grateful if he treated them as such.
The proposals for underground cabling have been dismissed by ScottishPower Energy Networks on cost grounds alone. It may be more expensive for the developer, but what is the cost of destroying our natural environment forever? Rather than using the route through the Scottish Borders, why can we not use the route of the existing cross-border electricity infrastructure following the M74 motorway and railway corridor?
Throughout the process, SPEN has not listened to our local communities in the way we would have hoped. It is another example of decision makers in cities with little regard for the people and landscapes affected. I have organised a number of extremely well-attended public meetings about the cross-border connection and some of the other infrastructure projects being proposed. We have set up the Action Against Pylons: Scottish Borders Alliance, a voluntary coalition of 10 independent community action groups made up of people who live along the proposed route of the pylons and the other infrastructure projects being imposed on us—the people whose lives are going to be made a misery if this project goes ahead. Local people are coming together to fight the plans: there are too many people to mention, but I wish to pay tribute to a few of them. Edward Kellow and Rosi Lister put in many hours of hard work to get the group up and running. Campaigners such as Rory Steel and local councillors Leagh Douglas and Julie Pirone have done much to raise public awareness, alongside many others. As a group, we invited SPEN and representatives of the Scottish Government to walk the proposed route of the pylons, to come and see the landscape and communities that will be most impacted by their plans, and to hear the concerns of local residents. It was a perfectly reasonable request but they refused. It seems that the people who live in the areas most affected are secondary to SPEN’s plans.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I pay tribute to the hon. Member for securing the debate. I gently remind him that there is an alternative to opposition: participation. In the Western Isles we have the highest level of community-owned wind farms in Britain: 22 MW, alleviating fuel poverty and powering community economics. Our council is ready to take a 20% stake in two big wind farms, leaving the local authority—one of the smallest local authorities in Britain—in charge of 89 MW of power on an island chain with a daily demand of 39 MW. Do the maths: the communities benefit. GB Energy has been set up with substantial sums for community involvement and I ask the hon. Member to consider what my island community and communities across the highlands and rural areas have done: buy in, participate and have a share. People might object to the pylons going past them, but they really object to the profits going past them. By having community participation, and a community share, we can make sure that communities benefit.
Clive Efford (in the Chair)
This is a half-hour debate, so interventions should be shorter than that.
John Lamont
The Borders already has a significant number of electricity infrastructure projects, including wind farms and battery storage plants that have already been developed. Some are community owned—Berwickshire Housing Association co-owns a wind farm—but it has gone too far. Many people who previously supported those types of projects feel that we have our fair share. We are now tipping the balance into changing the Borders beyond recognition. That is why people who previously consented to such projects now say, “Enough is enough.”
It is about not just the size and scale of the pylons, but the connected electricity infrastructure that comes on the back of the pylons, with the new substations and new projects rushing to get a connection to the upgraded power supply. Barely a week goes by without a new planning application: wind turbines, solar farms, battery energy storage units, data centres. The borders have been expected to take a disproportionate burden in the transition to net zero. As we have heard in this debate, other rural communities across the UK feel much the same. There will be those who say that we need to suck it up. Take for example the Secretary of State for Energy Security and Net Zero, the right hon. Member for Doncaster North (Ed Miliband), who said he would happily live next to an electricity pylon or a wind turbine. That is very easy to say for someone who lives in north London; it is an entirely different matter for someone who lives in the countryside.
There is a hidden impact of the new electricity infrastructure too. Last week, we heard that data centres in Scotland powering artificial intelligence are using enough water to fill 27 million half-litre bottles of water a year—a shocking statistic. It is made all the more shocking when we discover that it is our precious tap water that is being used. According to Scottish Water, the demand is growing. There is also the agricultural land that is lost to those projects. Rather than filling productive agricultural land with solar panels, why not adopt a rooftop-first approach to protect our farmland and greenfield sites while maximising existing infrastructure?
Community consent and local democracy are vital, and I am afraid that my constituents too often feel that these projects are simply a done deal—that the projects are being done to them rather than with them, without meaningful and constructive engagement between the developer and local communities. We feel that SPEN and other developers will go through the motions of a consultation but ultimately know that they will get their own way because they are pursuing Government policy objectives. That attitude was evidenced when the Information Commissioner’s Office recently ruled that SPEN appears to be seeking to “obfuscate” concerns about major power projects. That is totally unacceptable.
We live in a democracy, and people are supposed to have a say on what happens in their community. We have an alarming situation in which many local residents are saying no and elected councillors are objecting, but the local council is powerless. Members of the Scottish Parliament are saying “Enough is enough,” but the SNP Government will not engage. Members of this Parliament are pressing the alarm bell, but the Labour Government say that it is nothing to do with them, which is utter nonsense.
We live in the United Kingdom, and we should respect local decision making. We do not live in China, but it increasingly feels like that. Whatever the Government want is bulldozed through regardless of local opinion or the impact on our environment, habitats or landscapes. That is not how we do things in this country. My concerns centre not only on the projects affecting the Scottish Borders; they are about the lack of co-ordination and cumulative impact assessments.
I have already highlighted the concerns about the cross-border connection and the process used for that. Separately, there is a rush to get connections to the new, high-voltage power line, which is what is generating the applications for battery storage sites, solar farms, wind farms and data centres. Where is the National Energy System Operator in all this? It should be dictating how many connections it will permit, as well as looking at the cumulative impact of those projects, but it is not. The situation has become a free-for-all, and both the SNP and Labour Governments seem happy to sit back and watch the chaos unfold. Who pays the price? Communities and the environment, such as those in the Scottish Borders.
It is not just people in the Borders who have been left dismayed by the way SPEN has behaved. In the highlands, my Scottish Parliament colleague Douglas Ross MSP and Highland councillor Helen Crawford have been leading the battle, and I am pleased they have joined us in the Gallery today. Councillor Crawford organised two conventions with community councils to issue a unified statement on the importance of local democracy to new energy infrastructure. That was backed by politicians from the Scottish Conservatives, Labour, the SNP, the Liberal Democrats and independents—strong, cross-party backing—because the issue is above party politics, and because people deserve a real say in what happens in their community.
In the highlands, local communities are grappling with more than 1,300 major electricity infrastructure projects. Despite these concerns, the Scottish Government refuse to engage or meet local residents. I have a letter from Gillian Martin MSP, the Cabinet Secretary for Climate Action and Energy, in which she refuses to meet the affected residents, hiding behind the ministerial code.
This summer, I visited Torness power station. Some might call it a blot on the landscape, but it has been there for decades, generating vast amounts of electricity. It is a key source of high-quality jobs and an essential part of the energy network. Many of my constituents work there, as have generations of their families. Nuclear power is cleaner and greener than most alternatives. Frankly, it is the best way to produce more renewable energy while protecting our environment. Nuclear energy uses 3,000 times less land than wind does, and it can safely and reliably produce far more power than other alternatives. However, unbelievably, the SNP Government in Scotland have an ideological obsession against any form of nuclear-generated power. That means that in a few years’ time, Torness will close, jobs will be lost and our energy security will be weakened.
We should be increasing the use of nuclear power, not pursuing developments that will ruin our countryside and communities. New electricity infrastructure simply does not provide jobs and opportunities in the same way. Yes, jobs are created while the projects are built—although often for those outside the area—but then they disappear. The developers pack up and local communities pay the price for generations to come.
The issue matters to my community and to millions of people across the United Kingdom who are affected by new electricity infrastructure. Some of the most beautiful parts of our great country are at risk of permanent destruction. It is nonsensical for anyone to say that they want to protect our natural world while they simultaneously destroy it. We need a better deal for our rural communities when it comes to new energy infrastructure. The Government should urgently look at how developers engage with local people, consider options such as underground cables to protect our environment, and consider alternatives such as investing in nuclear, which is one of the most underused energy resources. If we do not do that, our rural communities will pay the price for generations to come.
I have one ask of the Minister today: will he meet me in the Scottish Borders, together with local residents who are raising concerns about this, so that he can see and hear at first hand what is at stake?
The Minister for Energy (Michael Shanks)
I thank the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for securing this debate. I have a huge amount of respect for him. He and I sparred at Scotland Office questions when we faced each other from different places in the Chamber. I genuinely take these issues seriously. In his list of quotes, I do not think he will find one in which I have dismissed community concerns. I have said repeatedly in Parliament that I take community concerns seriously, and I have met MPs from across the House to talk about these issues. I have probably had more meetings on these issues than previous Ministers have, so I do take them seriously, but they have to be balanced with ensuring that we are building infrastructure for the country’s future. That balance is difficult, and I will get into that throughout my speech, but I challenge the idea that I do not take these issues seriously, or that I do not respect his constituents’ views, because I do.
I will start with two points on which we agree, and then go on to answer some of the hon. Gentleman’s specific points. First, and most importantly, I will pick up on the point that he and the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made about the role of nuclear, which we should not forget has a hugely important role in our future energy mix. We are extremely ambitious about the role of nuclear and have announced funding for projects across the UK, but unfortunately not in Scotland at this stage. I genuinely hope that position changes soon, because there is huge potential.
A few weeks ago, I visited Torness nuclear power station, which the hon. Member for Berwickshire, Roxburgh and Selkirk mentioned. I met the workforce, some of whom have been working there for decades. It is long-term, good, well-paid employment, and there is an opportunity on that site to look at the future of new modular reactors. I hope we will have that opportunity, but the SNP Government block us from even considering sites in Scotland at the moment. I hope that will change.
Jamie Stone
Is that not ridiculous, given that at Dounreay we have a skilled workforce, a fully licensed site and a local population that would warmly support new nuclear?
Michael Shanks
It is entirely ridiculous; the hon. Member is absolutely right. The thing about nuclear is that it often builds communities around it that respect the role it plays in the energy mix. Generations of people have worked at these power stations—they often start as apprentices and are still there decades later—so we do not disagree on that point. We should be building nuclear in Scotland, and I hope the SNP either loses in May so that we can change the position, or that the SNP changes its position. There are no SNP Members here today to answer that point.
The second point on which I agree with the hon. Member for Berwickshire, Roxburgh and Selkirk is the role of rooftop solar. We will be saying much more about that, but in the solar road map, we are clear that we should be building on every rooftop possible. It is a no-brainer, and there is support right across the country for it. Wherever we can put solar panels on rooftops—warehouses, car parks, supermarkets and so on—we should. That is why, in England, we have been funding schools and hospitals to do so. We would have liked to do it in Scotland as well, but once again the Scottish Government did not want to partner with us on that project, so it is for them to take that forward.
I will now reflect on what we are trying to achieve, because it is important not to forget the overall ambition for where our energy system needs to be. Every piece of infrastructure that we build across the country, whether it is wind turbines, solar panels or network infrastructure, is critical to protecting this country from future price spikes, like those that have hit households so much.
However, on infrastructure and the network in particular, there is a wider question about decades of under-investment in our grid, which has been holding back not just our energy system from working as we would want but economic growth. I gently challenge the hon. Gentleman’s points on AI and data centres. I understand the challenge they present, but they are also a huge economic opportunity. Right across the country, we are seeing good economic growth prospects being closed down because we do not have the grid connections that would allow them to be switched on. They are going to other countries as a result, so we need to fix this issue.
Delivering any infrastructure, whether it is energy, prisons or hospitals, involves tough choices, trade-offs and local impacts. That is precisely why we have a robust planning system. It is not a cop-out to say that I am not responsible for planning decisions in Scotland, and the hon. Gentleman knows that. It is for the Scottish Government to answer for the planning and consenting decisions they have made in Scotland, but every individual project is assessed independently and fairly through the Scottish planning system for proposals in Scotland.
If there are specific points about consultations not being done effectively, I am very happy to receive correspondence on that from the hon. Gentleman. It is for the Scottish Government, as part of their planning process, to follow that through, but I am happy to facilitate the exchange of that information.
Michael Shanks
I will just finish this point, as I have very brief time. It is right that the consultation is genuine and that people have a voice in what happens. I will give way very briefly, but I have only four minutes.
Mike Martin
In Wales, companies such as Bute Energy and Green GEN Cymru, which are both owned by Windward Energy Ltd, are prompting local concerns that the rules separating electricity generation and distribution are being undermined by corporate restructuring tricks. Is the Minister confident that Ofgem’s rules will deliver operational independence?
Michael Shanks
I am, and I am always happy to have more conversations with Ofgem about its regulatory role. If the hon. Gentleman has specific things he wants to raise, I am happy to follow up. I will not give way again, as we have very short time.
While it is absolutely right that communities should have a voice in this, should be able to scrutinise planning applications, should be able to object and should be able to understand how those objections affect the proposals, it is also right that we recognise as a country that we have to build infrastructure and that it has to be built somewhere. That is vital for our energy security and for the future of our country.
The grid has suffered from decades of under-investment. The legacy means we are constraining the amount of cheap, clean power we have in our system. Upgrading and expanding the electricity grid is not optional. The reason I challenge some of what the hon. Member for Berwickshire, Roxburgh and Selkirk said earlier is because a number of his proposals were not in the previous Government’s plan for the future of the energy grid. It was the previous Government who said that we need a great British grid upgrade, and they outlined many of the plans that are now being delivered across the country. Undergrounding was not a feature of those plans either.
It is critical that our current grid, which was largely built in the 1960s and was not designed to handle the type of power generation or electricity demand we have now, is upgraded. In 2023, the previous Government estimated that four times as much transmission infrastructure would need to be built by the end of the decade as had been built by 1990. This is not a Labour Government plan; it is the previous Conservative Government’s plan.
The hon. Gentleman mentioned the role of NESO, and I want to reflect on the point that he and other hon. Members rightly make that strategically planning the future of our energy system has been a significant failure. The truth is that decades ago, under the previous Labour and Conservative Governments, we should have more holistically planned the future of our energy system to make sure we get the most out of it, and to make sure that we are building the least possible amount of network infrastructure. That work was not done, so NESO is now leading the strategic spatial energy plan to make sure that, across the country, we have a holistic view of what our future energy system should look like.
Michael Shanks
I will not give way; sorry.
That will also include a centralised network plan so that we have a network that fits generation across the country, and so that we build as little as possible while still getting the most out of the energy system.
In the minute or two I have left, I want to say that we recognise the point about community benefits. Because of the network infrastructure, electricity is flowing through communities that do not necessarily understand the benefit they get from it. First, cheaper power in the system brings down everyone’s bills, so it is in all of our interest. Secondly, we have recognised the problem, which is why we have introduced community benefits for households directly affected by transmission infrastructure—the first time we have done that as a country. There is money off bills for people who have infrastructure in their locality, and there are also community benefits for substations and other infrastructure. That is currently commonplace for onshore wind and solar, but not for network infrastructure. We want to change that so there is a direct benefit from this infrastructure.
We need to be honest about the scale of the challenge we face as a country. We cannot meet future electricity demand without building grid infrastructure. I am sorry to say that means it has to be built somewhere. There is no magical third place where we can build infrastructure. We want to work with communities to make sure it is done with them, wherever possible, and so they benefit from it, but ultimately the whole country benefits when we have a functioning grid that delivers cheap, clean, secure electricity to people’s homes and businesses.
I have 20 seconds left, but I am very happy to meet the hon. Member for Berwickshire, Roxburgh and Selkirk, as I am genuinely happy to meet Members on both sides of the House. It is important that we do this with communities. I want to hear their concerns and questions. That does not mean it will always be possible to do exactly what every community wants, but I am happy to have those conversations. I thank the hon. Member for Berwickshire, Roxburgh and Selkirk for securing this debate.
Question put and agreed to.
Co-operative Sector: Government Support
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Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
I beg to move,
That this House has considered Government support for the co-operative sector.
It is a pleasure to serve under your chairmanship, Mr Turner, in this important debate. I pay tribute to those leading this great movement in our co-operative societies, our mutuals and the Co-operative party, of which I am proud to be the chair. My thanks go to the national executive committee and to our general secretary, Joe Fortune, and his team for their tireless work in growing and strengthening co-operation across the United Kingdom.
This year, as we mark the UN International Year of Co-operatives, it is fitting to reflect on the difference that co-operation makes, and the extraordinary opportunities available to us. The roots of our movement run deep, back to 1844 and the Rochdale pioneers: 27 working people who, through solidarity, challenged exploitation and built something that was lasting. Their values of open membership, democratic control, member participation, autonomy and education all remain a living framework for economic democracy today. If their call to give working people power and a voice was important then, I think we can all agree that that call is ever more urgent today.
Liam Conlon (Beckenham and Penge) (Lab)
As my hon. Friend will know, the co-operative movement is a pillar of ethical business in Britain—owned by its members, rooted in its communities and committed to fairness. It includes the multiple Co-op stores that we have in Beckenham and Penge, which not only provide good jobs and affordable food but reinvest in local causes. Does he agree that it is important that we champion and expand co-operatives as part of building a fairer, more democratic economy?
Jim McMahon
I think a lot of people in Britain feel as though it does not matter what they do, how hard they work or how big their contribution is; they are just not able to make ends meet or get on in life. The communities where they live have been incrementally eroded and hollowed out, and they do not feel like they are getting on and doing well.
The founding principle, if we take ourselves back to Rochdale and towns like Oldham, where this is part of our heritage, history and identity, was a sense that if we build something together, we share the dividend that comes from it—that we redistribute the value that we create in order to build an even stronger community. I think we observe a country and economy where the wealth that we create is taken off to foreign lands and international investors more than it is reinvested back in the local community. Co-operation is of course about power, but it is also about place and identity, and the co-operative movement is central to that.
Paul Waugh (Rochdale) (Lab/Co-op)
My hon. Friend kindly mentioned Rochdale and its proud history in 1844 of the Rochdale pioneers founding this global movement for social justice. It is still a movement that is alive and kicking today. It is not a relic, as is evidenced by the Metro Moneywise credit union, which celebrated its 35th anniversary last week in a town hall ceremony in Rochdale at which I was pleased to be present. Does my hon. Friend agree that the most important point is that the Labour party has agreed to double the size of the co-operative economy, and that the whole of Government needs to get stuck in to achieve that—not just the Treasury, and not just the brilliant new unit in the Ministry of Housing, Communities and Local Government, the co-operative development unit, but every part of Government?
Jim McMahon
If it is to work, the whole of Government has to own this agenda. It is important that the Treasury and the Department for Business and Trade take a leading role, and of course, the community anchor in the MHCLG is important too, but the truth is that communities function in a dynamic way, and every bit of Government across health and social care, education and our school system, and everything else that Government have oversight of, comes into play. I absolutely agree that if we want to double the size of the co-operative economy, and for that to be felt in every part of the country, the whole of Government has to own that agenda.
Across Britain, too many people feel that the economy no longer works for them—that decisions that shape their lives are made far away by investors they will never meet and for reasons they do not agree with. We see the results in hollowed-out high streets, in local businesses that are bought and closed by distant investors, and in a growing sense of powerlessness. If we want to rebuild trust in politics, we must rebuild trust in the economy alongside it. That means giving people real ownership and control over the businesses that shape their lives, because ownership matters; that is exactly why those with wealth fight to keep it. We want more people to benefit and to have a stake in the future.
The good news is that the UK’s co-operative economy is thriving. Today there are 7,400 co-operatives, with 16.6 million members, and 240,000 employees working hard in their communities. Together they span retail, housing and agriculture, and beyond that, of course, social enterprise, creating decent jobs and trying to provide food and shelter for millions of people in this country.
Going further, our 42 building societies, owned by their 27 million members, contribute £7.2 billion to the UK economy. They account for nearly a third of UK mortgages and maintain over a third of all bank branches. Of course, as my hon. Friend the Member for Rochdale (Paul Waugh) said, our credit unions serve their 2.3 million members and hold nearly £5 billion in assets. Do people know that there are more members of building societies and credit unions than there are people who voted in the last general election? This is not a fringe part of the economy; it is absolutely foundational.
After years without a mutual bank presence on the high street, the recent acquisitions of Virgin Money by Nationwide and of the Co-operative bank by Coventry building society mark a welcome return of mutual principles to mainstream banking on the high street. Employee ownership is rising, too, from 600 employee-owned firms in 2020 to 2,500 today. That shows what happens when Government action aligns with co-operative values: co-operatives are more likely to grow and more likely to survive.
However, despite our proud history, the UK now lags behind other countries. If we are to fulfil our potential, the Government must create an environment that enables co-operatives to thrive.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
My hon. Friend knows that for many years I worked in co-operative development, including running co-operatives in Yorkshire and the Humber. To start new co-operatives, particularly co-operative legal forms, is a complex business. Under the last Labour Government, there was a significant level of support on the ground for co-operatives: the co-operative enterprise hub; Business Link had social enterprise units; and other forms of support. Does he agree that we need to try to establish new forms of co-operative support on the ground for people who want to start and develop new co-operatives?
Jim McMahon
The fact is that those of us who believe in co-operatives as a movement and as a principle get it, but we can be quite selfish about it, and we quite enjoy co-operatives and mutuals being the best-kept secret in the UK economy. Well, I am sick and tired of their being a secret and I want them to be mainstream. When somebody is setting up a business in this country, I want them to look at co-operatives and say, “That is the obvious choice for us and for our community.” I do not want co-operatives to be a sideline any more.
That is why co-operative development agencies and the whole of Government approach are important. It is also why education, access to finance, the surrounding legislation and, of course, creating a level playing field so that co-operatives can thrive are all important, too. We need to mainstream the idea of co-operatives and spread it out. If we do that, the economy will benefit even more, because co-operatives are more resilient and survive longer than many other businesses, and they return more to the UK economy, which can be reinvested in the community.
The barriers to co-operatives are well known; my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) touched on some of them in his intervention. There is difficulty in accessing finance; obviously, there are issues around equity investment and the barriers that exist there. There is an outdated and fragmented legal framework, and there is limited awareness of co-operatives among banks, businesses and advisers, and even in Government itself.
So, I would be grateful if the Minister, when he responds to the debate, could update us on Government plans: first, to progress the Mutual and Co-operative Sector Business Council; secondly, to work to improve access to finance for co-operatives; thirdly, the Government’s response to the Law Commission’s review of the Co-operative and Community Benefit Societies Act 2014; and finally, the plan to establish the co-operative development agency within Government.
Beyond that, on building societies and credit unions, we need action on the Building Societies Act 1986 (Amendment) Bill, on fair limits for individual savings accounts or ISAs, and on reforming the common bond, so that more people can join building societies and credit unions.
On community ownership, we need clarity about the future of the Community Ownership Fund, so that local people can secure the assets that matter to them the most. On housing, co-operative models must play their part in delivering the Government’s promised ambition for 1.5 million new homes by providing homes that people do not just live in, but have a stake in. On agriculture, we should recognise that food security is national security, and support co-operation among farmers in the same way as the US Government do. This is about delivering a level playing field and doing what is needed to deliver on Labour’s pledge to double the size of the sector. Growth is critical, but growth must be shared by everyone who contributes, in every community across the country.
The co-operative model was born when ordinary people said that enough was enough, chose to build something better for themselves and their community, and recognised the benefit of the shared dividend that would follow. That same spirit of collective action is exactly what our country needs again. Last week, alongside Joe Fortune from the Co-operative party and Paul Gerrard from the Co-operative Group, I joined the Co-operative Group’s national members’ council in Manchester, chaired by Denise Scott-McDonald. The sense of purpose, partnership and hope was absolutely inspiring. People across the country want to do more to collaborate and to create new enterprises, not because it is fashionable but because it is instinctive to them. Let us make this the decade when co-operation again becomes a defining force in rebuilding Britain from the bottom up: politics done with people, as it always should be.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Mr Turner. I thank the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this debate. The hon. Gentleman is right that co-operatives are incredibly important, including in Northern Ireland. I will give some examples from my constituency.
I am sold on the co-operative idea because it brings opportunity to those who might not have such opportunity in normal life, and it is really important that we do that. The co-operative sector is of course deeply rooted in local community and aims to reinvest in local services, to support goals and to help people elevate themselves from where they are to better, and because of that we should encourage it in every way that we can. I look forward to giving the local perspective from my constituents on how the co-operative sector goes above and beyond to help and train local people.
Our co-operative sector carries a wide range of economic and social benefits both for its members and for the wider community. Co-operatives are a worthwhile alternative to traditional business models. They give a different perspective, give a different opportunity and enable people to better themselves. In my Strangford constituency, they have an impact. We have the Newtownards credit union. The hon. Member for Oldham West, Chadderton and Royton mentioned credit unions and we have buoyant credit unions in Newtownards, Portaferry and Kircubbin.
The Newtownards credit union was established in 1993 and serves constituents throughout the Ards and North Down borough council area. The credit union is a member-owned financial co-operative, meaning that people living or working in the area can save and access loans. I remember when a credit union was started in Greyabbey, which then transferred to Newtownards. The first thing I did when my boys were younger was to start a credit union account for them, both to support the credit union and to give my boys an idea, at a very young age, about saving money—helping themselves while also helping others, because that is what co-operatives do.
The credit unions offer a wonderful service: a community-oriented alternative to commercial banking that retains financial value within the community. As we all know, community is at the heart of everything, as it should be and as this debate will indicate. Portaferry Cohousing undertakes fantastic work in housing and accommodation. Residents are involved in the design and the ongoing management of a small development and its communal spaces. That is crucial to the co-operative sector, as members collectively own and participate in the governance of their housing environment, rather than simply being tenants of a large developer or landlord. It is co-operatives at their best, doing what they do for their members and enabling them to be part of that.
Liam Conlon
I have always wanted to intervene on the hon. Member—the shoe is on the other foot. He mentions Portaferry; my dad is from there. It is where he was born, went to school and learned his trade as a carpenter before moving to Britain. The project the hon. Gentleman mentions is very special—it is the first cohousing project in Northern Ireland and I go there quite a lot. I have seen it; it is intergenerational, mixed-income and run by the community. Is not Portaferry Cohousing a fantastic example of how co-ops can keep decisions local, build trust and create housing, jobs and services that fully reflect the values and priorities of the local community?
Jim Shannon
I absolutely agree. I spoke to the hon. Gentleman beforehand; I was fairly sure that he would come up with a Portaferry connection to the debate, because he has family connections down there. I am very pleased to see him doing so well. He had to leave Portaferry to come here and do well, but those who stayed there are doing well too. I thank him very much for that intervention and wholeheartedly support it. He has summed things up really well. That is what Portaferry Cohousing does: gives people a vision for the future and a better place in life.
I also admire the work of the Ards community network, the third group I wish to speak about and one I have discussed in the House before. The network is a voluntary and community sector organisation that upholds and supports local community groups and facilitates training for development. It is truly wonderful. I am aware of the work undertaken by Cathy Polley, the lady who runs it, taking the time to instil co-operative values and shared goals for the betterment of the community. That is a third example of how co-operatives work so well in my constituency of Strangford, and indeed across many parts of Northern Ireland.
I understand that the Government have plans to double the size of the mutual sector. I am pleased at that news, as we must endeavour to encourage social value while also increasing business performance. Co-operatives UK has said that
“the planned changes do not go far enough in enabling the sector to raise finance”,
which may cause some problems. When the Minister responds, can he tell me what discussions he has had with co-operatives on this issue? Have the Government gone far enough, and if not, why not? First of all, as I should have done at the beginning—apologies for not doing so—I welcome the Minister to his place and wish him well in his new role. He is there because he is the right man for the job, and we all thank God for that.
There must be more financial backing for the sector, including for training and support systems to encourage more people to avail themselves of co-operatives’ services to protect their finances and communities. Co-operatives are a wonderful thing, and this debate encapsulates my feelings towards them and those of others who will speak shortly.
I conclude with this: the co-operative sector is a people-first movement rooted in fairness, equality and opportunity. In Northern Ireland, co-operatives offer real solutions—from finance to housing support. However, for this sector to thrive, Government support is essential through funding and education that recognise the challenges the co-operative sector can, does and will face. We can build a sector that is inclusive and resilient, where ownership is shared and voices are equal. I look to the Minister for a commitment that he will continue to do just that.
Jo Platt (Leigh and Atherton) (Lab/Co-op)
It is an honour to serve under your chairmanship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for bringing this really important debate to the House.
I am immensely proud to represent the communities of Leigh and Atherton—towns that embody the very best of Britain, built on pride, kindness and hard work. They show what can be achieved when people pull together. We talk about co-operatives, but I also want to talk about social enterprise. Together, they form a broader movement of collective ownership, where people have a direct stake in the success of their community.
These models share the same DNA: accountability, reinvestment and a belief that decisions should be made for people, not just for profit. They are vital to building fair, resilient economies from the ground up. Time and again, I have seen that spirit in Leigh and Atherton—people rallying on Facebook groups to help neighbours; volunteers restoring heritage sites; and grassroots projects breathing life back into our town centres. That is why I stand here today championing the co-operative and social enterprise sector. This is not just about business; it is about community pride, regeneration and empowerment. Town regeneration is happening right now. The Government are making real progress through the English Devolution and Community Empowerment Bill, the pride in place programme and the Crime and Policing Bill, all of which were designed to revitalise our high streets and restore confidence in our towns.
However, none of that will succeed without local people leading the charge. In our area, we have seen exactly what that leadership looks like. In Tyldesley, For Tyldesley has helped attract investment and given local people ownership of their town centre. In Atherton, the Snug—a Music Venue Trust asset, led by grassroots music champion Rachael McEntee—is building a vibrant cultural scene from the ground up. In Leigh, Leigh Works is creating space for small businesses and digital innovation to thrive. These are not isolated examples; they are part of a growing movement of local ownership and community-driven success.
Co-operatives reflect the values that we hold dear: self-help, democratic ownership and giving back. Across housing, agriculture, energy and retail, co-ops provide long-term stability, inclusive employment and ethical business practice. They fill the gaps that the traditional models often leave behind. I have seen that first hand; it will be no surprise to anybody that I am going to mention Leigh Spinners Mill—I mention it often. During my sabbatical years, in between being elected, the once-disused red-brick giant has become a thriving hub of creativity and enterprise. Leigh Film Factory, which is based inside, born from an empty space, shows what happens when working class towns back creativity and reclaim their stories. That is community wealth in action.
Nationally, there are 131,000 social enterprises in the UK, with a turnover of £78 billion and a workforce of 2.3 million. They outperform traditional businesses in growth, innovation, job creation and reducing inequality. They also better reflect the country that they serve: they are in our communities, with more women and diverse leaders at the helm. These organisations align perfectly with the Government’s vision of local empowerment, encouraging communities to take ownership of their spaces and their futures.
However, as we have heard from my hon. Friend the Member for Oldham West, Chadderton and Royton, for many navigating the world of finance business advice and investment remain a challenge. We all recognise that these are complex areas, and progress requires co-ordination across Departments and sectors. That is why I welcome the manifesto commitment to double the size of the co-op and mutual sector and the forthcoming call for future evidence on co-operative growth. That is an opportunity to shape a joined-up approach that helps co-operatives, social enterprises and community interest companies to thrive. Supporting them means supporting our communities from the ground up, rebuilding pride, creating opportunity and putting ownership back where it belongs: in the hands of local people.
Andrew Pakes (Peterborough) (Lab)
It is a pleasure to serve under your chairship, Mr Turner, especially as some of my earliest co-operative meetings took place in what is now Kingston upon Hull East, your constituency. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate.
One of the first visits that I undertook as a Member of Parliament was to 28 Long Causeway in Peterborough, home of my local Nationwide building society branch. It has been there since 1974 but it started its life in the city in 1954, a few doors down from its current location, as the Co-operative Permanent Building Society—at a time when Winston Churchill was the Prime Minister and the world was very different.
For a post-war generation, building societies and co-operatives were part of the new social contract—if they worked hard, they could get on in life, get a home and make a future for their children. The co-operative and mutual ideal has always been strong in the UK, but the idea of a purpose-driven economy feels even greater in today’s world. Against a backdrop of division, short-termism and populism, mutuals offer purpose and social value to our economy and communities. The co-operative and mutual sector is a vital part of the inclusive growth agenda of this Government, worth £93 billion in gross value added and £180 billion in turnover. Building societies have more than 27 million members.
Despite moves to demutualise the building societies in the UK—an act of economic vandalism by a previous Government—we still have more than 40 building societies holding nearly one third of UK mortgages. Nationwide, still standing strong in my city and many others, is the biggest lender to first-time buyers in the UK.
My constituency is home to the English Mustard Growers co-operative, which I often talk about. My constituency and that of my hon. Friend the Member for Norwich North (Alice Macdonald) supply the seed that goes into Colman’s mustard—many people will know the brand. I am pleased we have an agricultural co-op in Peterborough and our surrounding fenlands. It is an illustration that the mutual drive covers a wide range of industries, not just retail, as many will know.
More widely we see the return of co-operative ambition after a generation of consolidation. It is good to see that happening, with the Co-op Bank coming back into the mutual fold and merging with the Coventry Building Society; with Nationwide expanding with the takeover of Virgin Money; and with the Co-operative Group adding more members year on year. I join my hon. Friend the Member for Oldham West, Chadderton and Royton in paying tribute to my good friend Joe Fortune and also Shirine Khoury-Haq, chief executive of the Co-operative Group, for their sterling work on behalf of the movement.
We should all remember that the movement started many years ago from co-operative principles. A few months ago I attended the Co-op congress in Rochdale town hall with my hon. Friend the Member for Rochdale (Paul Waugh). Rochdale was the birthplace of a movement, with the power of 28 pioneers organising against the odds and today still a living force for social and economic justice in all of our communities. The Rochdale principles still stand tall in the world.
I am proud to be part of a Government with ambition for the co-operative sector: a clear commitment to double the size of the co-operative and mutual sector and to support social enterprises, as my hon. Friend the Member for Leigh and Atherton (Jo Platt) said. Such ambition has not been seen by Whitehall before. With ambition will come challenges. It is not the role of Government to build co-operatives, but it is the role of Government to ensure there is not a block to growth. Co-operative activity, as we have heard, spans many sectors and many Government Departments. With that ambition, we also know it will bring the challenges of how cross-Government working supports it. We know that sectors, which often work across Government Departments, struggle to find effective cross-Government working and effective time. So I welcome the announcement of a co-operative development unit as part of the Government’s pride in place plans.
Like my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel), who is no longer in his place, I am an old lag of the movement who spent many years working in co-op housing and co-op development, so I welcome the fact that we now have something that will look at co-op development in housing and local government. But I say to the Minister that the unit needs to work with the Treasury, the Financial Conduct Authority and other Government Departments to deliver the reforms we need to support it.
Co-operation is living proof that our collective endeavour can be greater than our individual efforts. There is no stronger message for co-operation than the world we stand in today. We need to make sure that that message rings true in Whitehall, where all of these initiatives add up to something greater than their individual aims. These developments have happened as a result of the Government’s new focus, but it is up to all of us to ensure they deliver on those.
Finally, why does this matter? It matters because it is about ambition for our communities and also the kind of world and economy we want to live in. If this is the co-operative moment, as I believe it is, we also need co-operative ambition. We need to create the conditions in which mutuals can flourish and succeed, where communities can come together and start up their own ventures, and where destiny for our families and communities is not determined by shareholders or Government alone, but by the people themselves. This truly is a co-operative moment.
Alice Macdonald (Norwich North) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate. Like him, I am proud to be a Labour MP and equally proud to be a Co-operative MP. I also thank Joe Fortune, the party’s general secretary, who has joined us here today. I pay tribute to the many co-operators across our constituencies. There are too many in my constituency to name, but in particular I pay tribute to Danny Douglas and Councillor Chrissie Rumsby, who work tirelessly to make the case for co-ops and to drive the practical changes we need.
Founded in 1917, the Co-operative party has for over 100 years been the bedrock of community-driven enterprise, shared endeavour and equal empowerment. In Norwich, our connection with co-operativism extends even further. It was in 1858 that Norwich formed its first co-operative society, embracing a movement that has shaped my city ever since. As co-operators, we recognise that there is more than one north star guiding business. A successful enterprise can be run not only by the largest shareholders in a boardroom, but through the democratic will of those who use the business, work for the business and provide for the business. Members of a co-operative seek prosperity for one another and the community they serve. These enterprises are not only enriched by their social contract; they are enriching our economy by exhibiting a resilience that surpasses other business models. In fact, co-operative businesses are twice as likely to survive their first five years, compared with businesses following other ownership models, so this makes economic sense, too.
It is therefore no surprise that the Government plan to double the size of the co-operative sector through their small and medium-sized business strategy, which I welcome. With growth being the Government’s No. 1 priority, now is the time for us to seize the opportunity of co-operativism and knock down the barriers holding it back. So many people think of the food store when they hear the word “co-operative”. Many of us shop there, and in fact, many of us campaigned with it for some of the changes we have seen, such as the crackdown on shoplifting.
Too few people know that there are co-operative ventures across virtually every sector, and we have heard about some of those today. They range from animal health to arts and culture, childcare, finance, energy, housing, telecommunications and tourism. There is so much more we can do to increase awareness of the opportunities of co-operativism, how to access them and, indeed, how to establish a co-operative. By virtue of being a member-run organisation, access to finance can be a particular challenge. That is important, and I hope the Government will consider all options to increase access to external investment among co-ops.
I also want to mention credit unions, which play a very important role. It is important to think about what co-operatives are, but also what they are not. I was just reading about Norwich’s Wherry Dragon credit union, which has won a national award for its campaign against loan sharks. Credit unions offer an important facility to many people in different areas. They are financial institutions owned by members living in the same area, working for the same employer or having a common bond, who all hold savings in the union. Not driven solely by profit, they are relative unicorns in the financial world, but they are competing against giants that can overpower those that are smaller. We must therefore do more to support credit unions, to increase their access to finance and to support them as they take their first steps. I know the Government have already signalled their intention to do so, and I hope they will engage closely with members of the co-operative movement to achieve the best outcomes.
At the beginning of my speech, I referred to Norwich’s, and indeed Norfolk’s, history in this movement, but now I want to look to its future. With local government reorganisation and enhanced devolution on the horizon, Norwich stands to gain even more from co-operation. There are huge opportunities to provide co-operative solutions to the ownership and delivery of local services and governance—protecting public assets, empowering communities and spreading wealth fairly. I pay tribute to my hon. Friend the Member for Oldham West, Chadderton and Royton for all the work he has done on the devolution agenda. It is important that co-operativism is at the heart of that, and I hope that we will soon see more co-operatives in Norwich, Norfolk and across the nation.
Jack Abbott (Ipswich) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Turner. I, too, thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate, and Joe Fortune, general secretary of the Co-op party, in the Gallery. My hon. Friend has been a tireless champion for the co-operative movement, and rightly so. This part of our economy combines purpose with productivity, and values with tangible social value. I am wearing my hybrid Labour and Co-operative tie—it is not official merch, although the general secretary might want to consider that. I am incredibly proud to stand here as the Labour and Co-operative MP for Ipswich, and to represent a town and region where the co-operative movement runs deep.
The East of England co-operative began in 1861, when a group of people in our region decided to trade fairly, work together and reinvest profits for the common good. From one small store, the movement has grown into a network of more than 200 businesses across Suffolk —including many in and around Ipswich—Norfolk and Essex, providing jobs, training and investment where they are needed most. That legacy still shapes our community today.
Co-operatives are rooted in their places. They keep wealth local, invest for the long term and give people a genuine stake in success. Those are principles that this Government proudly celebrate and learn from as we seek to build a fairer and more resilient economy. The co-operative spirit is also alive and well in Parliament, as we can see here this afternoon. There are now dozens of Labour and Co-operative MPs, including Ministers across Government, from the Treasury to the Department for Education and the Ministry of Housing, Communities and Local Government. Fairness, participation and local ownership run deep in this Government’s approach to growth, local empowerment and building an economy that truly works for everyone.
In Ipswich, the spirit of shared ownership and civic pride is something we see every single day. For too long under the previous Conservative Government, our town centre was allowed to decline, but local people never gave up on it. That is why I am so pleased that our Labour Government’s Pride in Place programme is investing £1.5 million in Ipswich, plus millions of pounds across our region and our country, to revitalise our high streets, bringing empty buildings back into use and empowering communities to take control of the spaces that mean most to them. That is more than simply a regeneration grant; it is co-operation in practice. Pride in Place is built on the same principles that drive the co-operative movement: local decision making, long-term stewardship and reinvestment for community benefits. It is designed so that local people, local councils and local businesses can come together to shape projects, not have them imposed from Westminster.
That means supporting community ownership of assets, backing partnerships that keep wealth circulating locally, and giving neighbourhoods the tools to plan and deliver the change they want to see. Whether refurbishing an empty shop for social enterprise or helping a community group take over a much-loved building through a co-op or trust, this policy puts power and pride back into local hands and connects directly with the other work the Government are doing to grow our towns more fairly and sustainably, from the community ownership fund to the local skills improvement plan and the growth mission fund.
Those are all examples of looking to boost growth, yes, but also sustain it. Together those policies form a clear picture of what co-operative economics looks like in action: growth that is built with communities at the centre. Ipswich is leading the way with projects that bring long-empty buildings back to life, and with community groups exploring new co-operative models to run venues and services that matter to them. There is a genuine sense of momentum in our town, a belief that when we work together we can shape the future of Ipswich ourselves. Although there is much to do, progress is being made. Co-operatives and community enterprises are essential partners in building a stronger, fairer economy that works for everyone.
Ministers have rightly spoken about the need for economic growth, not simply seeking growth for growth’s sake, but the type of economic growth that serves people and places. The quality and distribution of growth matter just as much as its pace. Politics has been guilty of seeing communities as an afterthought or a nice-to-have, not as the serious policy tool they should be. The truth is that members have a direct stake in their co-operative’s success because they own it. In fact, they are more than businesses; they are routes to power, ownership, decision making and community.
Ipswich’s story, from its proud co-operative roots to its renewed sense of local pride, shows exactly why that matters. True growth is achieved when local communities shape their own future, when we grow our economy from the grassroots and when we keep wealth and power local. That is why the future of our economy, our country and my town must have co-operation at its heart. That is what the Co-operative party’s Community Britain campaign is all about, and why I am proud to be a Co-operative MP.
Josh Newbury (Cannock Chase) (Lab)
It is a pleasure to serve under your chairship, Mr Turner. I congratulate my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) on securing this important debate and his impassioned opening speech. I can think of no greater or better-informed champion of our co-operative sector. Although he is a huge loss to the Front Bench, he is our gain in this debate.
I associate myself with the remarks about the incredible work of the Co-operative party, of which I have been a proud member since the age of 18, and Co-operatives UK. The co-operative and mutuals sector is one of the UK’s quiet success stories, with an economic contribution seven times greater than its share of the business population. It is not a sector that is standing still. The number of employee-owned businesses has trebled in five years, and the number of community-owned pubs has grown by 51% in the same period, bucking wider high street trends.
Why does that matter? Because co-operatives are more resilient, more likely to pay the minimum wage and simply more inclusive. In my constituency of Cannock Chase and across the country, we see that in community energy groups, credit unions, housing co-ops and the pub that stays open because the community refused to let it call last orders for the final time. Co-ops root wealth locally and give people genuine power over the things that shape their lives.
In my patch, for example, 10 years ago, under a Labour and Co-operative council, Chase Community Solar partnered with Cannock Chase district council to install solar panels on 314 council-owned bungalows, cutting the bills of tenants by between one third and a half. Five years later, after becoming a Labour and Co-operative councillor, I was proud to be one of the cabinet members who signed off on an investment that enabled a further collaboration with Chase Community Solar, that time alongside the charity Beat the Cold, to install batteries to make even more clean energy and cut bills even further.
John Slinger (Rugby) (Lab)
I declare an interest as a member of the Co-operative party. My hon. Friend is speaking about renewable energy. Does he agree that one benefit of the co-operative movement and principles is that it can be innovative for local communities? A constituent of mine approached me about a problem faced by people living in flats: they do not have driveways and cannot charge electric vehicles at a good rate. It strikes me as a good example that a co-operative approach could help that large section of the community gain access to EVs, which would be socially useful and progressive for them, society and the environment. That is innovation in the interest of the entire community.
Josh Newbury
My hon. Friend has given us a prime example of how thinking about problems differently and more collaboratively is rooted at the heart of co-operatives. The roll-out of EVs to people who do not have a driveway and perhaps do not have ready access to charging infrastructure is one of the many challenges that the Government are facing in the move towards net zero. It is a prime example of how we can use co-operative principles to tackle a problem in a different way that helps the community to benefit.
Similarly, I want to make sure that our local working men’s clubs are given their due, such as those in Cannock, Rugeley, Hednesford, Chadsmoor and my home village of Norton Canes, where they remain vital community hubs. Those clubs embody co-op principles, offering social support, fostering local connections and supporting grassroots initiatives. They are living examples of how member-driven organisations can enrich community life.
As a member of the Environment, Food and Rural Affairs Committee, I have seen how co-ops can empower small producers to speak with a louder voice, and to secure value and recognition for their labour. Probably the best known is Arla, owned by more than 3,000 dairy farmers and supplying a quarter of the nation’s milk, but there are many more. However, I still look longingly at many of our European neighbours and even the USA, which my hon. Friend the Member for Peterborough (Andrew Pakes) mentioned, where co-ops are far more present in the agricultural economy. It is no coincidence that they do not have much of the abject unfairness in their food supply chains that we see in Britain. I hope that is being considered by the Treasury and the Department for Environment, Food and Rural Affairs, as I believe it could unlock a huge amount of growth in rural communities that have been overlooked for far too long.
I am proud of this Government’s commitment to doubling our co-operative sector because, as my hon. Friend the Member for Oldham West, Chadderton and Royton said so powerfully, it is clear that co-ops have long been undervalued and underappreciated as part of our economy. They cradle immense potential not just to transform our businesses but to draw together our communities at a time when many have never felt further apart.
Ask an everyday passer-by what co-ops contribute to our communities, and they might answer something along the lines of: “Somewhere to buy a meal deal.” It is an irony that highlights the sector’s need for Government support in making the UK economy one in which mutuals, co-ops and community-owned businesses can thrive and play a more prominent role in national life.
I will set out three brief priorities for the Government. First, let us unlock finance by opening up the British Business Bank’s programmes to co-ops and making sure that transitional help is available so that small and medium-sized enterprises can mutualise. Reaching our manifesto commitment cannot just be about new co-ops being created; if we support the mutualisation of existing businesses, we can safeguard them and put them in the hands of the very people they serve.
Secondly, we need to shake up legislation and regulations so that co-ops are unleashed to start up, scale up and diversify. That is not asking for special treatment; all it would do is bring us into line with international best practice. That is particularly important for new and innovative co-operative models in emerging sectors.
Thirdly and finally, let us offer tailored support, at a regional level, on the nitty-gritty of start-up, conversion, governance and, of course, procurement laws, so that co-ops can compete for public contracts on the scale at which they operate. However, we must also think more broadly. There are sectors crying out for a co-operative approach, and the Government clearly have a role to play in supporting that. In social care, where quality, continuity and local accountability are critical, co-op models offer a way to put care workers and care users at the heart of the system.
In some areas of the special educational needs and disabilities sector, we see eye-watering profiteering at the expense of family and council budgets alike. A co-operative approach could provide transparency, trust and better outcomes by aligning support with the needs of families, not investors.
In housing, as we have heard, many people live in communities that are defined by shared interests and challenges, so giving tenants a real say through co-op principles could help to improve housing standards, tenant engagement and community cohesion.
Finally, looking ahead, local government reorganisation presents us with both a risk and an opportunity. As new councils are created, assets could be shared. Many of those assets are central to the identity of our communities, such as libraries, community centres and green spaces. Rather than lose them to speculative buyers or closure, the Government’s commitment to a true community right to buy, so brilliantly championed by my hon. Friend the Member for Oldham West, Chadderton and Royton, could make sure they stay in the hands of the community.
In conclusion, if we want to supercharge growth in the co-op sector, we must match its potential with political will. If we do that, we will grow not just a sector but an economy in which power is shared in Cannock Chase and every corner of the UK.
Tom Hayes (Bournemouth East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon), who was a superb Labour council leader and a superb Labour Government Minister. He is a fantastic advocate for the Co-operative party and the co-operative movement. I also thank Joe Fortune, the general secretary of the Co-operative party, who has been a fantastic supporter of the movement.
If someone is a co-operator, it is in their blood; it is who they are. It is an instinct to trust others, create ideas, craft projects and co-operate. It is about building stronger communities and holding the faith, knowing that life is to be enjoyed and made the most of, and about ignoring the voices of division and misery that feed us the message that life is something to survive and to get through. To be a co-operator is to live with hope; it is about striving for better, never accepting second best and always putting people first.
Politics is about choices, and we know what the choices made by the Conservatives were. The Conservatives showed us whose side they were on: they sold us out and they wrecked our country. Labour wants to put money and power back where they belong: into our communities. With the co-operative movement at the heart of that mission, I believe that we will be successful.
In my constituency of Bournemouth East, we have many co-operators, and across Dorset we have many co-operatives. Indeed, the movement dates back to 1862, with the Parkstone and Bournemouth co-operative. I want to see many more co-operators and co-operatives, and I want to do a few shout-outs, if I may. I want to shout out to Christchurch Housing Society, which provides housing for older and vulnerable people; Great Western credit union; Bournemouth East Allotment Society; and Cherries Trust, a community mutual that supports the local football club, AFC Bournemouth, which was top of the league for all of half an hour at the weekend—I hope to see it return there soon for much longer.
I also want to do a shout-out to Hengistbury Head Outdoors, which has been supported by a Labour Government investment of £668,000 to refurbish and repair its outdoor centre. It now has a 99-year lease, and the co-operative has helped it through the process of issuing shares for community assets and offering a percentage of match funding too. If any constituents are watching, it has a share offer on at the moment, and I would encourage them to invest, because that will help to get the project open in time for April.
Co-operation is in the DNA of Labour. The Labour and Co-operative parties have been sisters since 1927, and the centenary will take place under a Labour Government. Back then, the first electronic TV had just been invented and Parliament was still debating the introduction of traffic lights. We have been sisters for a long time and our partnership has endured, but the Co-op party can at times get lost in and swallowed up by the Labour party. We co-operators need to keep in mind that most fundamental question: what is uniquely co-operative about what we are trying to achieve?
The co-operative model may have been born here in the UK, but Germany’s sector is four times larger than ours, France’s is six times larger, and South Korea has doubled its in just five years by creating the right conditions. We should be no less ambitious now that we have a Labour Government. Over 7,000 UK co-operatives now employ 240,000 people, serve 16.6 million members and generate £42 billion each year. Owned by the people who use them, co-operatives keep wealth rooted in communities and reinvest for the common good. They are proven to be 8% to 12% more productive than traditional firms, twice as likely to survive their first five years and four times less likely to fail during crises. Co-operatives narrow pay gaps, promote equality and strengthen local economies.
To deliver on the Government’s pledge to double the size of the co-operative and mutual sector, we need action that will match our ambition. First, we need a modern legislative framework, acting on the Law Commission’s review, to unlock co-operative growth. Secondly, we need a regulatory system attuned to co-operatives, with the Competition and Markets Authority joining the Prudential Regulation Authority and FCA in supporting their unique role. Thirdly, we need better access to finance, adapting existing funds, such as community development financial institutions and Better Society Capital, to include co-operatives. Fourthly, we need stronger business support, provided through the new co-operative development unit and co-ordinated across Departments. Lastly, we need greater visibility and education so that more entrepreneurs see co-operatives as a viable route to business success.
In the time remaining I want to focus on one specific area of policy where the co-operative sector has played a crucial role and can play a further crucial role. To tackle the climate and ecological emergency, we must do more of what works. We must rapidly expand clean, affordable solar and wind energy so that everyone benefits from a sustainable, secure energy supply. When that energy is community-owned, society is fairer and more resilient.
As a councillor for 10 years, and as deputy leader of the council, I was proud to back the co-operative movement, including by funding the UK’s largest community-owned solar park with nearly £4 million of council investment. It now generates enough clean power for 6,000 homes each year, and the council receives £177,000 annually, with the loan fully repaid, plus an additional £606,000 to reinvest in local services. Over its lifetime, the project will return £10 million in community benefit, and local people have a direct say in how that money is used.
That is just one project of many in our constituencies. That is what co-operation looks like in action: clean energy, local ownership and shared prosperity. We could do so much more with the support of our Labour Government, and I am pleased to see Great British Energy prioritising community energy with a Great British Energy community fund that provides feasibility funding of up to £40,000 and project development funding of up to £100,000. I thank Barbara Hammond, Mish Tullar and Tim Sadler for their role in developing the solar park project, and thank the Co-operative Councils’ Innovation Network for sharing the news of the project across councils, as well as news of all the good projects across our constituencies.
The Rochdale pioneers built their movement in the hungry forties, when profit and power were concentrated in too few hands. They offered a fairer, more democratic way to do business, and that vision still matters today. Let us achieve a golden twenties; let us make this a co-operative decade. Co-operatives show us what businesses can be when profit serves people, not the other way round. Let us match ambition with action. Let us build an economy that is more productive, more resilient and fairer for all.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon), who has been a shining light of the co-operative movement for a long time. He has been a Co-op councillor, a Co-op leader, a Co-op MP and a Co-op Minister. We are incredibly lucky and proud to have him as such a shining light in our movement, and I thank him very much. I give thanks also to Joe Fortune and his team at the Co-op party. We talk about doubling the sector, but I think the Co-op party team might have doubled in the last few years. We are proud of that, and grateful for the hard work.
This Saturday I had the honour of speaking at the Confederation of Co-operative Housing. I was welcomed there by the statement, “Welcome, you’re here with the doers.” That is who co-operators are: we are the doers. We put getting on with practical solutions at the heart of our mission. This year is the International Year of Co-operatives, and I am happy to talk about our proud values, celebrating our co-operation throughout the years. Our values are practical, compassionate, community-driven and absolutely grounded in the principle of sharing power and wealth, in the knowledge that if we can share power and wealth in the organisations that we create, we can rebuild trust and confidence in democracy and rebuild and restore confidence in our communities as well. If someone has a stake in a place or an organisation, that makes a difference to how they feel, and to the strength of that organisation and its ability to make a difference.
My constituency is home to Nationwide, John Lewis and more co-ops than I can count. I wish to talk about two particular sectors, housing and energy, and about what more the Government can do to support them. On the housing sector, we know that communities can identify opportunities for genuinely affordable homes in the new homes coming forward. I welcome the work that community and co-operative housing organisations do to bring forward new homes. We should also recognise the importance of having communities involved in the governance of small and medium-sized housing associations, and celebrate the £20 million that the Government have put into co-operative housing and the small sites aggregator, which will make such a big difference to increasing the size of co-operative housing in this country.
On the energy sector, I am proud to have the Aldgate community energy scheme and the Ebury Edge energy garden in my constituency. They bring people together and make sure that they all share in the benefits of renewable energy. We should celebrate the investment that GB Energy is determined to put into community energy schemes and make sure we do everything we can, practically, to deliver more of them.
We should also talk about the finance needed, the access to capital and the changes the Government can make to help us grow the sector. I know how determined the Government are to double the size of the sector. As a member of the Treasury Committee, I had the chance to speak to Treasury officials about the Treasury’s role in that. It is brilliant that we now have a Mutual and Co-operative Sector Business Council—it is a great step—but there are further practical steps we should consider to increase the benefits of co-ops.
Can the British Business Bank’s ENABLE scheme extend to co-ops? What more can the Government do to support co-operative development agencies in every community across the country? I look forward to the Minister’s response on those topics, and I am grateful for this chance—in the International Year of Cooperatives —to discuss this issue with all the co-operators here today.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) for his work in securing this important debate. It has been a real pleasure to hear contributions from all the Labour and Co-operative party Members this afternoon.
The current economic landscape is challenging for our businesses and industries. Years of dire economic mismanagement by the last Conservative Government have led to businesses, including co-operatives, facing huge challenges, ranging from recruiting and retaining staff to soaring energy costs. Those issues have been exacerbated by the increase in trading obstacles following the last Government’s botched trade agreement with the EU. However, many of those challenges are now being compounded by decisions taken by this Government.
Co-operatives are owned by and run for the benefit of their members. As the Liberal Democrats have always believed in empowering individuals to engage in decisions that impact their lives, we are supportive of the co-operative sector, credit unions and non-profit financial institutions owned by their members. The co-operative sector is made up of more than 10,000 enterprises across every sector and region, from local community pubs and credit unions to building societies, mutual insurers and retail societies. Together, they represent one of the most resilient and values-driven parts of the UK economy, rooted in communities and owned by their members.
The Liberal Democrats believe that employee participation in the workplace, together with wider employee ownership, is important for diffusing economic power, promoting enterprise, increasing job satisfaction and improving service to customers. Co-operative enterprises offer considerable potential for member and employee involvement and are an important part of a modern mixed economy.
In the recent “Backing your Business” plan, published in July 2025, the Government committed to growing the co-operative and mutual sector over this Parliament, and launched a call for evidence on how we can support the sector and its businesses to grow. The Liberal Democrats support that ambition, but will the Government be more decisive in their support by acting on some of the recommendations of Co-operatives UK, such as on access to finance, which would expand the possibility for many of these organisations to scale up. Co-operatives often struggle to raise capital because, by virtue of being member-run organisations, they are more limited than companies in issuing shares that are attractive to external investors.
Often, co-operative enterprises provide fairer workplaces; they are four times as likely to be living wage employers, and women lead nearly a quarter of the UK’s top 100 co-operatives—more than twice the proportion in the FTSE 100. Meanwhile, although women earn 12% less on average than men across the UK economy, that figure is reduced to 7.5% within co-operatives. Community-owned pubs are also on the up, with a 51% increase over the last five years, and a 13% increase in the last year alone.
However, training, hiring and retaining a skilled workforce are issues that affect businesses of all kinds across the country. The Liberal Democrats therefore welcomed the industrial strategy this summer and the commitment to an increase in skills and training. The apprenticeship levy does not work, and many businesses cannot get the funding they need to train staff, with hundreds of millions of pounds of funding going unspent. The Liberal Democrats have been calling for the apprenticeship levy to be replaced with a wider skills and training levy, which would give businesses flexibility over how they spend the money to train their staff. We therefore welcome the intention to reform the levy and replace it with a broader growth and skills levy, but we have concerns about moving funding away from level 7 apprenticeships, which we know increase social mobility.
Andrew Pakes
On the subject of apprenticeships, is the hon. Lady aware that the Co-operative Group is doing pioneering work at Highpoint Prison in Suffolk using some of its share from the levy? It is working with employers to ensure that offenders get on to an apprenticeship framework so that, when they have served their time in prison, they have a job to go into. That shows that the co-operative movement is leading the way on innovation in apprenticeships. Does the hon. Lady agree that we need to see more in the apprenticeship levy aimed at reducing reoffending and giving opportunities to young people?
Sarah Olney
That is really good to hear, as it is a good example of how the co-operative movement promotes innovation, particularly in promoting wider social participation. However, the fact that we have to have innovative schemes driven by the co-operative sector points to the challenges that so many people find in using the apprenticeship levy. The Liberal Democrats would like to see a much broader range of potential uses for the apprenticeship levy, which would benefit the co-operative sector as well as the rest of the economy.
More broadly, co-operatives, like many other kinds of business across the country, are struggling under decisions made by the Government, such as the increase in national insurance contributions imposed at the last Budget. Small businesses in particular have been left struggling under the heavy burden of this jobs tax. The Government must take steps to support those businesses, which are at the centre of communities and local economies. Thousands of local businesses, including many in the co-operative sector, which often provide community services, are feeling the damaging impact of the national insurance increase and many other changes. That is why I and all my Liberal Democrat colleagues have repeatedly called on the Government to reverse the employer NICs increase and will continue to campaign for them to scrap that damaging policy.
We also call on the Government to introduce vital reform to the business rates system. In 2019, the Conservative Government promised a fundamental review of business rates, but they failed to deliver it. Labour pledged in its manifesto to replace the system, but still no action has been taken. A year into Labour’s time in the power, will the Minister say whether the Government plan to keep their word on that commitment? Critically, as we look at measures that will boost growth, the Liberal Democrats will continue to be proud advocates for a closer relationship with Europe. Liberal Democrats want to see a bespoke UK-EU customs union to reduce red tape and allow all businesses the freedom to grow without heavy regulation and huge export costs.
The co-operative sector generates a combined annual income of £42.7 billion. Its significant contribution to the economy and defiance of current business trends highlights its resilience and stability in a challenging economic landscape. In 2025 there are 7,400 co-operatives in the UK, with 16.6 million memberships, employing around 240,000 people. I am glad that in my constituency of Richmond Park, co-operative enterprises exist not only for the services that they provide, but as community spaces to bring people together. I thank the hon. Member for Oldham West, Chadderton and Royton for securing the debate and hope the Government will go further in supporting the co-operative sector.
Mark Garnier (Wyre Forest) (Con)
It is a great pleasure to serve under your leadership, Mr Turner. I add my congratulations to the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) on securing this important debate, in which there seems to have been an outbreak of unanimity around the Chamber. As I start my remarks, I am conscious of the expression “everything that needs to have been said has been said but not everybody has said it.” My apologies if I repeat some of the points that have been made.
As colleagues all know, this was all started in Toad Lane, Rochdale in 1844 by a group of 27—or was it 28?—men known as the Rochdale pioneers. The pioneers would not have been constituents of the hon. Gentleman, but it is important to recognise that the roots of the movement can be found not just in Rochdale, but in surrounding areas, including his constituency. At a time when living conditions were particularly tough, these men decided to do something for their community by balancing the profitability of their shop and its members with the social impact on the community and the wider membership. That meant that essential, good-quality ingredients—flour, butter and others—became affordable for the community.
The co-operative movement that was founded in Rochdale in 1844 continues to thrive today. It has grown to become an international movement; co-operatives operate in 109 countries. In the UK alone, we have 7,400 co-operatives, but if we incorporate organisations that operate in the co-operative spirit, such as employee-owned businesses, building societies, friendly societies, credit unions and mutually owned banks, the number comes to over 10,000. That represents around 0.2% of businesses in the UK.
According to a recent report by Co-operatives UK, there are 66 million members across the sector, with around 16.6 million people solely in co-operatives. I have to say that just in the last hour I have become a member myself, having signed up to the Co-operative on the app. [Hon. Members: “Hear, hear.”] Thank you very much. The exciting point about the last statistic that I referred to is that that number has increased by 1.4 million in one year, showing that the sector is truly on an upward trajectory. Additionally, it is suggested that the combined annual income of the sector is around £179 billion, with WPI Economics estimating that the sector has contributed £35 billion in gross value added, which is equivalent to about 1.5% of the total UK economy.
It is obvious, therefore, that the co-operative sector plays an important part in the health and growth of the UK’s economy. Co-operatives help to provide a diverse range of business models, which I believe is a good thing. Any healthy economy needs a variety of business models, and it is really important that we have things like co-operatives.
I agree with the premise of the debate, which is about Government support for the co-operative sector. A perfect example of such support is the introduction under the last Government of employee ownership trusts and the tax incentives surrounding them. Offering 100% relief on capital gains tax when a business owner transfers their company to an employee ownership trust has helped to empower communities, and we have seen a strong rise in employee-owned businesses, from 600 in 2020 to 2,500 this year.
However, let me express a slight reservation. It is important in a competitive market not to incentivise one part of the economy, or one business model, over another, in the way that the Building Societies Act 1986 opened the way for demutualisation and incentivised building societies to convert into investor-owned commercial companies. Some have said that that was a bad thing, and in retrospect I probably agree. We need to be careful that we do not encourage excessive mutualisation and disincentivise investment in our equity markets. Fundamentally, a balance needs to be struck.
I believe—possibly unsurprisingly—that that was done successfully under the last Government through the Co-operative and Community Benefit Societies Act 2014. The last Government introduced measures to increase transparency and facilitate growth, while maintaining the core principles of member benefit and community focus; for example, by increasing the maximum withdrawable shareholding from £20,000 to £100,000 per individual investor, they allowed for broader capital participation.
Although the 2014 Act was positive for the sector, I think that there is widespread agreement that it needs to be updated to help support the growth and modernisation of the sector today. It was good, therefore, that the last Government and now this Government have asked the Law Commission to review the legislation, and I look forward to seeing its proposals when they are brought forward, hopefully at the end of this year.
I am also glad that the private Member’s Bill now known as the Co-operatives, Mutuals and Friendly Societies Act 2023 supported the co-operative sector to protect its capital and assets, and to discourage mutualisation. Introducing an asset lock mechanism could mean that organisations are able to lock their capital surpluses, ensuring that assets are non-distributable among members and must instead be preserved for the community and the purposes of the organisation.
It is understandably disappointing that although the 2023 Act received cross-party support when it went through Parliament, over two years later the regulations specified in the Act have not yet been announced by the Government and co-operatives are still unable to utilise the statutory protection that it provides. I note, however, that the Law Commission has proposed to put those powers into primary legislation through reform of the 2014 Act. Are the Government considering that? If not, what alternatives are being pursued?
It is worth adding that the last Government introduced the community ownership fund. Although that was not directly targeted at co-operatives, some, such as the Calder Valley Community Land Trust, which seeks to reduce energy use and costs at Fielden Hall, have made successful bids. That is positive, but I would be interested to know whether the Government are considering a fund specifically for those in co-operatives and mutuals. In fact, we heard earlier from one Member about the potential for the British Business Bank to be opened up in order to support co-operatives and mutuals.
I turn now to what this Government are doing. First, it is important to recognise the commitment in their manifesto to double the size of the co-operatives and mutuals sector. That is a positive direction of travel that the Government want to follow. However, Chris Bose of the Nationwide asked what the Government meant by that and wrote:
“Precisely what was to be doubled was unclear, as was the means to achieve that.”
This is an important point for the Minister to clarify. Do the Government want to double the number of mutuals, the number of members or the size of mutual balance sheets? What specifically are they seeking to achieve?
The measures announced at the Mansion House in 2024—specifically, the creation of the mutuals and co-operatives business council and the commissioning of a report by the FCA and the Prudential Regulation Authority on the mutuals landscape—will help to lay the groundwork for that, but I hope the Minister will be able to provide the clarity the sector is looking for. Like the hon. Member for Oldham West, Chadderton and Royton, I also welcome the creation of a co-operative development unit in the Ministry of Housing, Communities and Local Government.
Those are all good things, but it feels like we are still waiting for some meat on the bone, so let me raise a few points with the Minister. First, the issue that is raised time and time again by those in the sector is their ability to access cash. By their very nature, co-operatives are member-run organisations, so they are more limited than companies when it comes to issuing shares that attract external investors.
It is also worth highlighting concerns related to the rumours about what the cash ISA allowance will be following the Budget. There is talk that it will be slashed from £20,000 to £10,000. Cash ISAs are a really important way for building societies to access finances. The Building Societies Association estimates that around 40% of all cash ISA balances are held with building societies, which turn those cash balances into mortgages for our constituents to go and buy homes. It is really important that we get some clarity on that.
Returning to the issue of incentivising certain sectors of the economy over others, I am very much in favour of encouraging investment in the UK equity market, but we must be careful that, in trying to achieve the good, we do not get rid of the best. By trying to incentivise cash ISAs to move into equity markets, we are effectively taking cash away from the mutuals and putting it into normal equity. I am worried that, if this policy comes forward, the Budget could cause a problem for the mutual sector. I know the Minister will not be able to comment on the contents of the Budget right now, and we have to wait only another month, but I hope that the Economic Secretary to the Treasury takes note of this important point and feeds it back.
I also encourage the Minister to look into the Credit Unions Act 1979, and specifically the regulations on geographical area and the total number of members in common bonds. The last Government made positive steps to increase the total number of potential members of credit unions from 2 million to 3 million, and at the start of this year the Government ran a call for evidence about common bond reform, which I welcome. However, we are still waiting on the findings and for the Government’s response to be published, even though there seems to be a consensus that the regulations are still stifling growth in the sector. It is important to get the credit union sector to grow. Government Members know exactly how important it is, and so do Opposition Members. We need to get on with this. Doing so would only support the goals of the Government’s financial inclusion strategy, as well as their manifesto commitment to double the size of the sector.
Let me put a few final points to the Minister. I had the honour to go to Iceland and meet representatives of the country’s trade unions, which, by any other standard, behave as friendly societies. It is invigorating to see that from something as fundamental as a trade union, funded by both members and employers. Something like 97% of employees are members of those unions, because they act as friendly societies and provide insurance, holidays and all sorts of things. That is a really good example of how friendly societies can work.
We should be debating more the mutualisation of other utilities. We heard from the hon. Member for Cities of London and Westminster (Rachel Blake) about an energy company in her constituency that does this, but has she considered the possibility of mutualising Thames Water? It is a very ambitious project—
Mark Garnier
It is not in her gift, as she says from a sedentary position, but it is quite interesting. Notwithstanding the £17 billion black hole in Thames Water’s balance sheet, the water utilities are very geographically prescribed and millions of people use them, so they have a built-in membership. The most important issue that people are talking about is the pollution of waterways such as the River Thames. By mutualising an institution like Thames Water—by the way, this is not Conservative policy, but—[Laughter.] But it is a debate we must have, Mr Turner. With mutualisation, members could have a proper debate about what investment they want to make in the purity of the waters.
My final point is about skills. I do not want to bring up the ugliness of the debate over the former chairman of the Co-op bank, the Rev. Paul Flowers, back in 2011 or 2012, I think, but he came before the Treasury Committee when I was a member of it and made a very good point. He said that his election as chairman of the Co-operative bank was because he was a member of it, not because he was good at finance. It is incredibly important, particularly with things like corporate governance, that we ensure there is training for corporate governors. Running a bank or a big chain of supermarkets is an incredibly difficult job, so we must make sure that that training includes not only people who work in the bank but those responsible for the corporate governance that looks after the organisations.
My experience of the Co-operative in Kidderminster has been absolutely fantastic. A few years ago we were trying to stop a 4G telephone mast. This was several Governments back—perhaps around 2007 or 2008—when 4G masts were first going up, and there was a proposal to put one opposite the Co-op. I had a conversation with the managers there and they said, “We will buy the site in order to prevent the telephone mast from going up.” So I have always been a huge fan of them, and I cannot imagine why it has taken me 20 years to actually join the Co-op.
I thank the hon. Member for Oldham West, Chadderton and Royton for securing the debate. As I said, there has been an outbreak of unanimity, which is fantastic to see. I am only sorry that I did not bring more of my friends with me.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Turner. Please do not adjust your sets: I am not the Economic Secretary to the Treasury. But I am very pleased to be here on her behalf for my first stint at the Dispatch Box. [Hon. Members: “Hear, hear!”] Thank you.
I am grateful to my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate. He is a huge asset not only to our party and his constituents but to the Co-operative party, which he proudly serves as chair. I must declare that I am a recently rejoined member of the Co-operative party. I did not know that I would be doing this debate when I joined, but it is a pleasure for it to have come round so soon. As so many others have done, I note the sterling work of the party’s general secretary, Joe Fortune. I also want to recognise the party’s fantastic head of politics, Caitlin Prowle, who I am sure has put a huge amount of work into this debate.
The level of interest in this topic reflects the Government’s strong support for the co-operative sector and underlines how important it is to ensure that the sector continues to grow, thereby supporting local people and communities. It also reinforces why, in our manifesto, we committed to doubling the size of the co-operative and mutual sector.
I thank colleagues from across the House for their thoughtful contributions. My hon. Friend the Member for Beckenham and Penge (Liam Conlon) talked about the importance of community housing. My hon. Friend the Member for Rochdale (Paul Waugh) talked about the Metro Moneywise credit union, which is clearly building on the legacy of the Rochdale pioneers. My hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) spoke about new forms of co-operative support. It would not be a first appearance at the Dispatch Box without the hon. Member for Strangford (Jim Shannon); I thank him for his very kind words, and I know how important the co-operative sector is in Northern Ireland.
My hon. Friend the Member for Leigh and Atherton (Jo Platt) gave great examples of the importance of local leadership, including at Leigh Spinners Mill. That organisation was lucky to have her and, after a brief absence, we are lucky to have her back in this place. My hon. Friend the Member for Peterborough (Andrew Pakes) talked about a purpose-driven economy and inclusive growth. He does himself down a little, though: he is not as much of an old lag as he sometimes pretends to be.
My hon. Friend the Member for Norwich North (Alice Macdonald) talked about the breadth of the co-operative sector and the opportunities for her community presented by devolution—on which my hon. Friend the Member for Oldham West, Chadderton and Royton did such sterling work as a Labour Minister. My hon. Friend the Member for Ipswich (Jack Abbott)—I hope Ipswich coming straight after Norwich is not a point of contention—spoke about the role of the community in shaping the future of his town. That is something we on the Government side of the House are incredibly keen on.
My hon. Friend the Member for Cannock Chase (Josh Newbury) talked about one of my favourite topics: social clubs and their important role in the community. They are part of our past but, increasingly, also part of our future. We should all seek to support them, both politically and with the pounds in our pockets. My hon. Friend the Member for Rugby (John Slinger) talked about how co-operative principles can be applied to modern challenges, while my hon. Friend the Member for Bournemouth East (Tom Hayes) made the second-earliest reference, to 1862—not quite as far back as the Rochdale pioneers, but pretty good. He also mentioned Hengistbury Head Outdoors and called on local people to invest, which sounds very sensible for people in that area. My hon. Friend the Member for Cities of London and Westminster (Rachel Blake) said we are “the doers”. Not only that, but she is a doer for her constituents in a world of talkers, and we all thank her for that.
I welcome the support of the Lib Dem spokesperson, the hon. Member for Richmond Park (Sarah Olney), for the co-op sector. While I expect some disagreement with the Government, I think we can agree that this was an agreeable debate on all sides. She made the important point that co-ops are more likely to be led by women than the average for the FTSE 100. That is another mark in favour of the co-operative sector.
As for the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), he said before I started that everything that needs to be said has been said—a bit of a challenge, but I can take it on my first outing. We all welcome a new co-operator, don’t we? He joined over the course of the debate. After the Economic Secretary to the Treasury has read Hansard tonight, before bed, which I am sure she will—as we all do every night—she will write back to him on the point about the British Business Bank. The Government look forward to the Law Commission review coming out. I certainly did not expect references to the potential mutualisation of Thames Water or Icelandic trade unionism—I hope that one day both may be discussed more broadly on the Opposition Benches—but the mutualisation of Thames Water is not Government policy.
The Government are committed to doubling the size of the mutuals sector, as has been discussed. According to the 2025 co-operative and mutual economy report, there are currently over 10,000 mutual and co-operative businesses in the UK, with an annual income of £179.2 billion. What doubling means will differ for different parts of the sector.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
This debate has focused on the business element of the co-operative sector, but could the Minister take back to the Department the work on co-operative solutions that happens in social settings? My constituency was one of the few that had riots last year. The Co-operative party’s community power work demonstrates that we can bring communities together and deal with the tensions and sense of purposelessness by giving people a genuine stake in their community so that they can shape the services they use. There is no business element to that, but the social benefit is huge. When the Minister goes back to his Department, can he implore it to look at co-operative solutions to and models for the modern tensions that we face in some communities? The co-operative movement has the answers that we are looking for.
Mark Ferguson
My hon. Friend intervened on my maiden speech, which is slightly irregular, and now he has intervened on my first outing at the Dispatch Box. Co-operatives have a wide variety of uses in the economy and I am sure that the Department and the Government more broadly will consider them. Their importance in community cohesion is certainly not lost on me or, I am sure, on other Members here.
On the shadow Minister’s question about cash ISAs, cash savings are important for people looking to put cash away for a rainy day, and the Government will protect that. The Chancellor has been clear that she wants to get Britain investing again so that companies can grow and so British savers who choose to can get more in return. Given that I am here merely on behalf of my hon. and learned Friend the Economic Secretary to the Treasury, I am even less tempted than usual to comment on the future Budget.
I want to acknowledge the importance of discussing the mutual sector, of which co-operatives are a huge part. According to research by Co-operatives UK, the 10,000 co-operatives I mentioned not only have £179 billion of income, but employ 1.3 million people in our economy. Britain has a rich history of mutuality, from co-operatives and community benefit societies to credit unions, mutual insurers and friendly societies. For example, this year marks the 250th anniversary of the first ever building society, which was founded in Birmingham with the principles that still guide the sector today.
The modern co-operative movement was born in Britain, as my hon. Friend the Member for Oldham West, Chadderton and Royton noted. In 1844, a small group of artisans from Rochdale came together to form the first modern co-operative, the Rochdale Society of Equitable Pioneers.
Paul Waugh
My hon. Friend may not be aware that four of the original 28 Rochdale pioneers were warpers and weavers from Spotland Bridge, which is where I grew up. That makes me incredibly proud of the sense of working-class ingenuity and self-help that lives on today. Directly to my hon. Friend’s point, does he not think that the most important statistic about co-ops is that co-operative start-ups are twice as likely to survive beyond the first five years as any other start up?
Mark Ferguson
That point is very well made, and my hon. Friend is right to be proud of his forebears, who were doughty working-class politicians and representatives of his area, as he is.
The Rochdale principles, established by the Rochdale pioneers, have formed the basis of modern ideals for the operation of co-operatives across the globe. The UN General Assembly declared 2025 to be the International Year of Co-operatives, recognising the positive impact that co-operatives have around the world.
The Government have made clear their strong commitment to supporting the co-operative sector, and we have already begun to make our commitment a reality. At her Mansion House speech last November, my right hon. Friend the Chancellor of the Exchequer announced measures to support the growth of co-operatives. That included welcoming the establishment of an industry-led mutual and co-operative sector business council, which is already providing a powerful voice for the sector. The Government have been working closely with the council to understand what the sector needs to grow further, and the council has been developing sector growth plans, which we look forward to receiving.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Will my hon. Friend give way?
Mark Ferguson
I have to make progress—sorry.
Additionally, the Government asked the Financial Conduct Authority and the Prudential Regulation Authority to produce, by the end of 2025, a report on the wider mutuals landscape, which is well under way. The Government are continuing to fund the Law Commission’s independent review of the legislation that governs co-operative societies in Great Britain, which is expected to be published later this year. That review will consider ways to update and modernise the legislation for co-operatives and community benefit societies, including on methods of raising capital, to ensure that those societies operate in a supportive regulatory and legislative environment. That is exactly the sort of access to capital that my hon. Friend the Member for Norwich North referenced. The Government look forward to reviewing the report when it is published, and will consider its recommendations closely.
Of course, our commitment to doubling the size of the sector is an ambitious target that requires a cross-Government effort, as my hon. Friend the Member for Oldham West, Chadderton and Royton rightly noted. The Treasury works closely with other Departments on achieving that ambition, and will continue to do so, and the Department for Business and Trade has also taken steps to support the sector. It has announced a call for evidence to explore how the Government can better support co-operatives, and has included co-operatives and alternative business models in its business support initiatives, such as the growth hubs and the business growth service.
The Ministry of Housing, Communities and Local Government has provided support for co-operatives in its Pride in Place strategy. Its new co-operative development unit will work closely with local and combined authorities to support the growth of local co-operative and mutual economies. Beyond those examples, Departments across Government, including the Department for Environment, Food and Rural Affairs and the Department for Culture, Media and Sport, have been considering how the co-operative sector can support their priorities. This is a united, cross-Government effort that reflects our commitment to a diverse and resilient economy with a range of business models.
As today’s discussion has shown, the Government remain committed to supporting the growth of the co-operative sector now and in the future, recognising the important role of co-operatives and mutuals in our economy. I thank all Members who spoke in this important debate—because co-operation is an essential part of rebuilding Britain.
Jim McMahon
First, I want to say how pleased I am at the turnout for this debate. It recognises the importance of co-operation in our communities, our economy and our politics. One thing that I observe in Britain today is that many people feel, in politics, the economy and society, that they are powerless, and there is something in this debate about how we collectively rebuild.
The fact that this debate has had cross-party support—from Northern Ireland to Norwich, and from both the Liberal Democrat and Conservative shadow teams—just shows that, in the end, success can have many fathers. When we can build something that is positive and brings people together, it can act as a magnet for people genuinely to come to, so I thank Members for having this debate.
My final point is for the Minister on his first outing at the Dispatch Box. He undertook it with flair and enthusiasm, and I am sure he has great things ahead.
Question put and agreed to.
Resolved,
That this House has considered Government support for the co-operative sector.
Local Government Funding: North-west England
(1 day, 23 hours ago)
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Mr Tom Morrison (Cheadle) (LD)
I beg to move,
That this House has considered funding for local government in the North West.
It is an honour to serve under your chairship, Mr Turner. I thank the Minister for being here today.
I will start by reading the words of Stuart, who lives in my Cheadle constituency, and who wrote to me just two days ago—a timely admission for this debate. He said:
“I am writing as a resident of Cheadle Hulme to express my deep concern about the level of council tax and the prospect of further increases. My current council tax is £275 per month...This level is already difficult to sustain, and any further rise will make it unmanageable for many working households like mine. I understand that a large proportion of council spending now goes toward adult and children’s social care, but the current trajectory feels unsustainable without fundamental reform or additional central government support.”
Stuart is right: the current situation is completely unsustainable, and I am sure Members here today will agree that it cannot go on.
I am sure we all entered politics to effect change—campaigning to keep a school open, fundraising for a library or creating a community group. We know that change starts small, with one person, one area or one community. We must take to heart the saying that all politics is local. Local government is at the forefront, the most frequent point of interaction between the British public and government. As a former councillor myself, I know the amazing things that local government can achieve and the real and lasting impact it can have on a personal level.
Local governments are the key to unlocking growth, improving health and poverty outcomes, and providing the best support to the most vulnerable. But our local authorities, as Stuart rightly points out, are suffering tremendously from years of cuts and a systemic failure to properly fund even the most essential services. Our local authority finances are on their knees, and this country cannot deliver growth, reform public services or improve life changes without first fixing local government finances.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for bringing forward this debate. He is absolutely right to underline the importance of local government. I served as a local councillor for some 26 years before I came to Parliament, so I understand the importance of local government. He is outlining why Government needs to commit to funding for local towns and cities across all of the United Kingdom. Does he feel that Government’s interaction with local government should be the first stop when it comes to organising funding and understanding what the real issues are on the streets?
Mr Morrison
I completely agree. There has to be a two-way dialogue, in which the Government talk and work with local government to work out the challenges that need to be fixed.
The Local Government Association reports that 29 councils needed exceptional financial support in 2025-26 to set a balanced budget. That is 11 more than the previous year, and I am afraid that number will only continue to grow. The Government’s pride in place strategy is meaningless when local authorities are still being encouraged to sell community commodities such as libraries and leisure centres to avoid financial ruin. That is no way to set our communities up for success. It is stripping away the key things that make a community, the places where people gather and access the support and services that they need. Drawing on dwindling reserves is not a sustainable financial plan.
However, there are also regional inequalities to the issue, which slice across all aspects of daily life, from transport to potholes. Last year’s fairer funding review lacked all nuance, basing criteria for recovery grants on deprivation figures from over a decade ago. Stockport council missed out on any recovery funding; it is now left to pick up the pieces, and to continue fighting tooth and nail without the £20 million it so desperately needs to sustain long-term services, despite having some of the most deprived wards in the UK in our borough. In just three years’ time, Stockport council will be underfunded by £63 million. Despite that, the council won local authority of the year in 2025—a testament to its officers and councillors.
Stockport is a council that does not shy away from hard decisions. It was promised more from the Government, yet things have not changed. In opposition, the Labour party decried the underfunding of local councils across the country and said that things could only get better under its tenure. Well, councils are facing the same problems across the north-west, and we are seeing the same lack of ideas from the Government that we did under the Conservatives. Real-time cuts to local government funding in Stockport alone have reached more than £133 million in the past few years. As a result, Stockport council was forced to find £24.5 million of savings just for the 2025 budget.
Lisa Smart (Hazel Grove) (LD)
As a fellow Stockport MP, I am delighted that my hon. Friend has secured this debate. I strongly agree with the points he is making about the underfunding of local government over a period of years, particularly in our part of the world. I wonder if he agrees that the root of some of the problems is the unsustainability of social care. As his constituent Stuart mentioned, for Stockport council, £3 in every £4 is spent on either adult or children’s social care. The demand for that is increasing, yet the funding available is not. Does he agree that the Government taking three years to do a review into social care is too long, and that they should crack on?
Mr Morrison
I completely agree. The point, when it comes to social care, is political will. All parties have talked about the importance of social care and of getting the funding right. There is no need to wait for three years; we should indeed crack on.
Regional growth drives national growth. If regions are not invested in, we cannot expect the country to thrive. There are ever-expanding divides between regions, which have consequences on the quality and even length of people’s lives. According to the Institute for Public Policy Research, transport illustrates that divide exceedingly well. In London, people receive £1,183 per head for transport, but in the north-west it is less than half that figure, at just £540 per person. In total, across the north, that is an investment gap of £140 billion.
Our growth is low and slow as a country because areas outside the south-east have been neglected time and again. Anne, another constituent of mine in Bramhall, wrote to me recently to explain her frustrations. She said:
“Residents are being asked to pay more while receiving less and now must pay extra just to maintain a service that was previously included. Public frustration is escalating rapidly across online forums, community groups, and social media. What can be done about this?”
It is no wonder the public are increasingly frustrated when core spending power for local government remains 16.4% lower in real terms this year compared with 2010. The services that local government provides are vital to people’s everyday lives: bin collections, green space maintenance, street cleaning and social care for our most vulnerable residents.
If local governments can no longer sustain those services, our country will decline rapidly as people’s everyday quality of life suffers. Although the guarantee of multiyear settlements and a move away from fragmented, ringfenced grants are a step in the right direction, that is still not enough. Those changes will not be felt and frustrations will continue to grow, especially as the Government continue to work on the basis that local authorities will continuously raise council tax by the maximum 4.99% each year.
Jonathan Hinder (Pendle and Clitheroe) (Lab)
I am pleased that the hon. Member is leading this debate and glad that he is raising the point of regional inequality. Does he agree that council tax is the most unfair, regressive tax in Britain, and that it is long overdue a proper overhaul to link property values to the amount of tax paid, as is not the case at the moment?
Mr Morrison
I thank the hon. Member for that intervention and agree completely that council tax is regressive, impacting the poorest in our communities. All parties should commit to finding a new way forward to reform it.
Councillors and council staff do not want to raise council tax. The public, already squeezed by a difficult cost of living crisis, will struggle to pay more time and again. It does not have to be that way. We must have the political will to empower our local governments to deliver their full potential. I want to outline to the Minister that politics is local. Chronic national issues will turn into deeper crisis if local governments continue to be squeezed to the point of no return. The Government must understand the benefits of investing in local authorities to do their jobs right and give the people of Cheadle, the north-west and all areas the good quality of life they deserve.
Giving all councils the power and resources to invest in community centres, parks, libraries, children’s centres and green spaces will restore people’s trust and respect, not just for their local authorities, but for central Government. We are now in a situation where the Government need to invest in councils just so that they can keep the lights on without fear of going bankrupt. It really is that serious.
Local government is capable; given the resources, it will deliver for our communities. We need to invest now without delay. Proper support now to address challenges earlier will lead to fewer councils requiring more intensive and costly interventions later down the line. Local government is the linchpin for change. It is a pool of potential waiting to be unlocked, and I urge the Government to do just that.
The Minister for Local Government and Homelessness (Alison McGovern)
It is, as ever, a pleasure to serve under your chairship, Mr Turner. I thank the hon. Member for Cheadle (Mr Morrison) for initiating the debate on this important topic. He rehearses arguments I heard made in this Chamber and in the Chamber of the House of Commons for 14 long years, as local government funding was slowly undermined by the Tories. The Osborne cuts—I am making myself sound very old, Mr Turner, but you will remember those days—fell on town halls almost more than anywhere else. I have great sympathy with the hon. Member’s argument.
Our country is diverse and all our towns and cities face unique challenges arising from their own economic and social history. As the hon. Member rightly set out, when local government is successful, people experience public services that are specific to them, and every place is given the best chance of growth. He is right to connect dissatisfaction with politics overall with the place of local government. It is in all our interests to see it succeed.
With the UK Government and local government working closely together, we can achieve our collective aims. As the Member of Parliament for Birkenhead in Merseyside, I am more than aware of the challenges and opportunities that our region faces. The Government are committed to making sure that local government in the north-west and across England is put on a sustainable and secure footing. Doing so after 14 years of damage will be complicated, but I believe we can make progress.
The local government finance settlement for 2025 to 2026 made available £69 billion of funding through core spending power, of which £9.4 billion—14% of the total for England—was allocated to the north-west. The settlement marked the beginning of the Government’s commitment to rebuild and stabilise local government. That commitment included introducing a new £600 million recovery grant targeted at those areas with greatest need and demand for services and less ability to raise income locally.
I hear what the hon. Member for Cheadle says about Stockport and the recovery grant. I repeat the comments I just made: it was specifically targeted on the basis of need. In recovering the financial position of local authorities, an important golden thread that runs through all the steps that the Government will take is that we will objectively consider need, deprivation, poverty and inequality to make sure that we are supporting local government to help rebalance our country and provide services in a way that helps everybody to have the best chance of thriving. In the north-west, 78% of councils received an allocation of the recovery grant, totalling £146 million—24% of England’s total. That is the first meaningful step towards funding reform, which was not achieved under the Tories.
Our ambition does not stop at this year’s settlement. The spending review provided more than £5 billion of new grant funding for local government over the next three years, allowing us to move forward with reforms that will reduce the pressure on local government. This year my predecessor embarked on a consultation on the long delayed fair funding review because the outdated way in which local authorities are funded has left some places behind. We intend to redirect around £2 billion of existing funding to the places and communities that need it most, ensuring the best value for Government and for taxpayers.
For the first time since 2013-14, the Government are updating the relative needs formulae that form a key part of how local authorities’ funding allocations are calculated. This year, those reforms will be delivered through the first multi-year settlement in a decade, giving councils the certainty that they have long called for, enabling more spending on prevention and less on paying for the costs of failure. I would be a rich woman if I had a pound for every time somebody in local government, over the past 14 years, had asked me for multi-year settlements to enable forward planning and focus on prevention. Introducing them is an important cornerstone of the Government’s new approach to local government.
The reforms will also change the fragmented local government grant funding landscape. We will consolidate as much revenue funding as possible into the local government finance settlement, bringing funding together into the multi-year settlements so that we do not have such a complex mix of funding. For 2025-26, we consolidated almost £700 million into the settlement. We are going further and faster for 2026-27, and will deliver the biggest programme of funding simplification to date. That frees up resources for public services and helps local authorities to decide for themselves the most effective way to spend money in their communities.
However, funding reform is only one part of the story. As the hon. Member for Hazel Grove (Lisa Smart) mentioned, we have to change public services to best serve residents and communities. There are areas where we have to consider not just funding but how the services are changing, and how need for them has shifted. The spending review confirmed more than £2 billion over the next three years for children’s social care reform. We are determined to invest in prevention, fix the broken care market and crack down on excessive and exploitative profit making. We will set out further detail on funding for children’s social care reform in the local government finance settlement.
We are also committed to reform the adult social care system, and to build a national care service. We will consider recommendations from phase 1 of the independent commission into social care led by Baroness Casey when she reports in 2026. The Government have made a major step in boosting the wages and working conditions of adult social care workers across England, with an extra £500 million investment into the first ever fair pay agreement for care workers.
For special educational needs and disabilities, we have ensured that funding for schools is increasing by over £4.7 billion a year by 2028-29 compared with the 2025-26 core schools budget that was published at the 2025 spring statement. With that funding, we will reform the SEND system to make mainstream schools more inclusive, improve outcomes and stop parents having to fight for support.
We also recognise the pressures that local authorities are facing because of their dedicated schools grant deficits. In June, we announced a two-year extension to the DSG statutory override, which is now due to end in March 2028. We will set out further details in our plan to support local authorities with historical and accruing deficits through the upcoming local government finance settlement.
The Government have also already taken the first steps to getting back on track to end homelessness, including investing over £1 billion in homelessness and rough sleeping services this year—an extra £316 million compared with the previous year—to prevent rises in the number of families in temporary accommodation and to prevent rough sleeping. That may sound like an objectively good thing to do—which of us thinks that families could possibly thrive in temporary accommodation? —but having looked at the books, I am also extremely worried about the cost of homelessness and temporary accommodation to councils. The aim of the investment is therefore not just to stop the terrible moral stain of homelessness, but to help maintain the structural integrity and funding of our councils.
On top of that, the Government are setting the foundations to deliver on our plan for change commitment to build 1.5 million homes in England this Parliament, and will deliver the biggest boost to social and affordable housing investment in a generation. That investment will also be preventive and help to secure councils’ funding in a better way.
To focus on the north-west, the Government are investing to help revitalise our districts, towns and cities and to foster thriving communities. Through the local regeneration fund, the north-west is benefiting from over £1.5 billion of investment, combining the levelling-up fund, the towns fund and the pathfinder pilot scheme. That reduces the monitoring burden on councils and lets them prioritise how they deliver locally, without micromanaging from Whitehall. In Stockport, that includes a £1.2 million active travel package, £4.4 million for Cheadle eco business park, and £8.2 million for Cheadle railway station.
We have an ambitious programme of reorganisation taking place across England, ending the two-tier system of local government and establishing single tier councils everywhere, including in Lancashire in the north-west. That streamlined approach to local government will also help it to work better.
The north-west, I am very proud to say, has led the way on devolution, as part of the Government’s ambition to see all of England access devolved powers by establishing strategic authorities that can make key decisions to drive economic growth and celebrate our towns and cities. Greater Manchester combined authority and the fantastic Liverpool city region are two excellent and long-standing examples in our region of what can come when devolution happens.
In particular, Greater Manchester has secured a £630 million single funding settlement under its trailblazing devolution deal. That replaces fragmented funding pots and gives the combined authority greater flexibility to allocate funds across priority areas. It has been a pleasure, both in my previous role and this one, to work with Mayor Andy Burnham to bring the vision of city governance for Greater Manchester to life, and to devolve functions from the UK Government to Greater Manchester so that he can integrate services and work with local authority leaders to get the best service for residents.
I thank the hon. Member for Cheadle and everybody who has contributed for the insightful points raised and their ongoing dedication to making sure that local government—our councils—in the north-west have the most powerful voice in this place. We cannot overstate the damage done to the foundations of local government over the past decade and a half. Change has begun and we are ready to listen to all local authorities about how we get this right. I thank the hon. Member for bringing forward this debate.
Question put and agreed to.
Mandatory Digital ID
(1 day, 23 hours ago)
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Pete Wishart (Perth and Kinross-shire) (SNP)
I beg to move,
That this House has considered the matter of mandatory digital ID.
It is a pleasure to serve under your chairship once again, Mr Turner. I did not know I was so popular today. I am delighted to see so many colleagues joining us in this short debate. I warmly welcome the Minister to his new role. We were shocked and appalled by his unjustified defenestration at the Scotland Office. We were energetic supporters of the “get Ian a job—any job” campaign, so we are delighted to see him here in his rightful place today. It has to be asked, though: who has he upset in the last few weeks to be landed with this particular poisoned chalice? But here we go again. It has taken 20 years, but ID cards are back, this time in a shiny new digital format, turbocharged by all the new features of modern technology.
Tony Blair famously tried to introduce ID cards back in the 2000s before being forced to abandon them by a fantastic campaign by civil liberty campaigners, Members of this House, and the millions of ordinary UK citizens who simply refused to have ID cards foisted upon them. But they are back. Like a spectre from the political grave, ID cards are with us once again. It is just possible that Tony Blair might reach his ultimate aim and aspiration of getting ID cards back, only this time in the form of his proxy, the current Prime Minister.
I had the misfortune of being around back in the 2000s, along with the right hon. Member for Goole and Pocklington (David Davis), who is sitting behind me. We were part of the campaign that defeated Tony Blair at that point, and we look forward to defeating him again. The tone of the debate seems eerily familiar. Once again we have a Government earnestly assuring us that digital ID is a benign, benevolent scheme designed purely to make life easier for the general public. They talk about the Tesco clubcard and never having to find your utility bills ever again, as though it is nothing more than a boarding pass. It is a sort of, “Do not worry your silly little heads about this mass data collection or our new-found ability to monitor your every move. We are the UK Government; of course you can trust us.”
Well, we have heard it all before, and we know that this campaign is only going to be ramped up because the concerns remain the same: the threats to our privacy and civil liberties, the risk of mass surveillance, the dangers of Government overreach, and the too real vulnerabilities that come with storing vast quantities of personal data. We have only to look at the newspaper headlines this morning to see the true effects of that particular fear, with the breakdown in Amazon workplaces. Imagine if it were the personal data of everybody across the United Kingdom.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the hon. Member for securing this debate, because it is an issue that the general public are engaging in. He will know that Scotland has its own identity card, known as the Scot card, which is used to store benefits data, debt data, the checks to make sure people can work with vulnerable people, court data and tax data. It is quite incredible. There are real fears that this—
Pete Wishart
I am not going to waste time responding to all that nonsense. It is a voluntary scheme. Does the hon. Member know the difference between voluntary and mandatory? All he needs to do is shake his head or nod. The detail is at hand. This new scheme has been objected to because it is mandatory—one of the few mandatory ID systems anywhere in the world. The Scot card is great. It is up to the individual user what gets put into it and what gets shared.
This new scheme could barely have got off to a worse start. Support for digital ID has collapsed since the public have been able to see the Government’s proposals. The petition calling for the proposals to be scrapped has become one of the fastest growing ever. It is now at almost 3 million signatories, and I am pretty certain that by the time I sit down it will be well over 3 million.
I heard the Minister’s car-crash interview on Radio Scotland. He told us simultaneously that the Government plans were both compulsory and voluntary, and went on to say that apparently digital ID would be “mandatory for some purposes”—a sort of partial compulsion, a digital half-pregnancy. Maybe this is a Schrödinger’s Britcard.
Alex Easton (North Down) (Ind)
Does the hon. Member agree that the vast majority of the population across the UK, including in Northern Ireland, clearly see this for what it is—as a breach of their data, as spying on them—and that the mass of the population are now opposed to it?
Pete Wishart
Absolutely. As I said, support for it has been plummeting right across the United Kingdom, and I am not surprised.
Let us just dispel the notion that this is voluntary. This is a mandatory scheme. It is compulsory. It is to be compulsory for work, and if it is compulsory for work, it will be mandatory full stop. The only people who will not need one of these Britcards are those who plan never to work, rent a home, have access to public services or take part in normal life.
As we know, all this emerged from our friends in Labour Together. It was they who first proposed it, and it has been adopted by the Labour party. For some reason, they thought they would call it the Britcard—almost immediately alienating most of Scotland and probably about half of Northern Ireland at the same time. Given its recent controversies, it is probably a good idea for the Minister and his Government team to stay as far away from Labour Together as they possibly can.
Let us have a proper look under the bonnet of the great British Britcard. The Government say that it will be free of charge this time around, and available to all citizens and legal residents. So far, so good, but we still do not know its reach. Who will be expected to take one? There are already rumours that 13-year-olds might have to have a Britcard, although that has been disputed by the Government, and we already know that our veterans will be the first of the many digital guinea pigs.
Stuart Anderson (South Shropshire) (Con)
As a veteran, I was disgusted to see yesterday that veterans are being used as guinea pigs, with a smokescreen, to test this system. Our veterans do everything for us. They are brave people. They should not be the ones on whom this is tested. Does the hon. Member agree?
Pete Wishart
I most definitely agree with the hon. Gentleman. It is absurd and unfair that our veterans are the guinea pigs who will test this out for the Government.
We are told that digital ID is essential to tackling illegal working and illegal migration. When we look at the evidence on mandatory ID across the world, that just does not stack up. Under the Government’s plan, anyone seeking work must prove their right to work through this digital ID, giving the Home Office sweeping new powers over individuals’ daily lives, from employment to housing and basic public services. There is no clear evidence whatsoever, from anywhere mandatory ID is in place, that it reduces illegal working or irregular migration.
Let us be absolutely clear: illegal working does not stop because people are forced to carry digital ID cards; it stops when people are allowed to work legally, contribute to society and live without fear. Big Brother Watch has called mandatory digital ID a “civil liberties nightmare”, and it is absolutely right. Amnesty International warns that such a scheme risks becoming “a honeypot for hackers” and a tool for state surveillance—again, absolutely right.
The UK has never been a nation where it is normal for someone to have to prove who they are when they are not suspected of doing anything wrong. I do not share the concept of being British, but there is something particularly un-British about having to surrender huge amounts of personal data just to access basic services. A “papers, please” culture, even in digital form, seems so alien to this country.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I agree with most of the hon. Gentleman’s conclusions. Does he agree that, in hindsight, the Scottish Government’s use of a covid passport was a mistake, especially in a way that exposed the Government to criticism from the Information Commissioner about the lack of transparency on how that data was used?
Pete Wishart
We are getting a little bit off-track, but I will answer that because the right hon. Gentleman needs an answer: no, I do not think that was a mistake. It was the correct thing to do.
Mandatory digital ID would fundamentally change the trust-based relationship between citizen and state, replacing it with one of constant verification and oversight. Let us not forget about the danger of mission creep. Once this type of infrastructure exists, it rarely stays confined to its original purpose. The Government say that the police will not be able to demand to see a person’s digital ID, but does anyone seriously believe that will not change over time?
This is about not just what this Government might do, but what every future Government might do. We are empowering not just this Labour Government, but every Government that will come after it. Imagine Prime Minister Farage, with all his authoritarian tendencies, with the data of the nation at his fingertips. It scares me half to death and it should scare the whole House half to death.
Then there is the cost. The Government have been very coy about the cost. They are reluctant to give us even a ballpark figure, and they are absolutely right—those prepared to work out an estimate on their behalf have said that, initially, this could cost anything between £1.2 billion and £2 billion. That is a gross underestimate. Laughably, our friends in Labour Together told us that it would be £1.4 million. We need only look at the costs of the physical ID to get a sense of what it will eventually cost. The physical ID would cost £5.4 billion. Some people reckon it would get above £15 billion, possibly to £19 billion or £20 billion.
Digital ID is much more technical and complicated to administer than the physical version. Do the sums work out? How much will this cost? All our constituents should be asking every Member of Parliament whether we should spend billions of pounds on a scheme that nobody wants and that there is no demand for when a cost of living crisis is raging in every single one of our constituencies. Are we seriously going to spend billions of pounds on an unpopular, crackbrained scheme that no one wants or needs?
Then there is what is happening elsewhere. We have heard foreign examples to suggest that this is just business as normal for this Government. They are keen to promote the Estonia scheme. I have had a good look at Estonia. Estonia is 10 times more digitally engaged than the United Kingdom. It is an entirely different nation. But even with all their knowledge, experience and digital systems, there have been catastrophic data leaks, which has led to real problems and issues for the citizenry. Look across Europe: Europe, like Scotland, is developing its own type of digital wallet. That is the right thing to do. People like having these things in a digital wallet. The key difference is that it is not mandatory—we come back to that feature again.
In Scotland, we are developing the ScotAccount, which has proven very popular. I encourage people to use it. There is nothing wrong with having things in a digital wallet. It becomes wrong only when it is made mandatory—when people are expected to carry one even though they do not want to.
Pete Wishart
I will not give way to the hon. Gentleman again.
That is the issue, and the Government seem cloth-eared about it. In Scotland, we will have to pass what is called a legislative consent motion to allow this to go through, given our responsibilities for devolved services. We are not going to do that. The Minister will have to decide whether he accepts the democratic will of the Scottish Parliament or whether he will do a Tory and impose it on us anyway. I challenge him to do that in the run-up to the Scottish election, because he will turn this into a nightmare for the Government and a constitutional nightmare for the hon. Member for Edinburgh South West (Dr Arthur).
We do not want these things. We think they are thoroughly bad. We saw them off in the 2000s, and we will see them off again. The public hate them, and I believe the petition now has more than 3 million signatures, so we are getting there with the general campaign. I pity the Minister for having to take this through; he would have been much better off had he kept his place in the Scotland Office.
We saw off ID cards in the 2000s. Twenty years on, whether it is plastic cards or digital apps, this is still a data-grabbing, liberty-eroding, multibillion-pound waste of time. We beat them in 2005; and the SNP, with our leadership of the campaign in this Parliament, will ensure that we see them off once again.
Several hon. Members rose—
Karl Turner (in the Chair)
I will have to impose a one-minute time limit on speeches. I call Jo White.
Jo White (Bassetlaw) (Lab)
Thank you, Mr Turner. Wow, that is a big announcement!
Just over a month ago I visited Tallinn, the capital of Estonia, a country that has been using digital ID for 30 years and a country we can learn from—how it works, how it reaches the digitally excluded and how it protects people’s security. What struck me most was that everyone I spoke to said the same thing: with digital ID, they know exactly what information the Government hold on them, and most importantly, they know who has looked at it and why.
That level of transparency and personal control should be the gold standard, but here it often feels the opposite: social media giants and private companies know more about us than we realise—often more, I would say, than our nearest and dearest. We need to have absolute control.
Emily Darlington (Milton Keynes Central) (Lab)
It is interesting that my hon. Friend talks about the Estonian experience, as I often hear my constituents’ frustration that they do not know what the Government are doing with their data, and how they even have trouble accessing it. Does my hon. Friend think that a scheme like Estonia’s would help the citizen to be in charge?
Jo White
I totally agree with my hon. Friend.
From the moment we are born, the state begins to gather data: our birth is registered; the NHS stores our health records; we are issued with national insurance and NHS numbers; and His Majesty’s Revenue and Customs tracks us. By having a digital ID, we can see the information the state holds on us, who has been accessing it and why. We can even determine that other people cannot see our data. It is about us having control over our own data.
It is also about security, because the way it is divided and split up means there is absolute security as nobody can see data from one Department to another. It is about people having personal control, which is what people in my constituency are calling for.
David Davis (Goole and Pocklington) (Con)
In view of the time limits, I will focus solely on the scandalously insecure One Login procedure. I will be writing to ask the National Audit Office to investigate because, apart from the strategic weakness of having a single login, the Government’s handling has been a disaster.
As early as 2022, the information assurance team responsible for ensuring the security of the system raised concerns that it was being developed on unsecured workstations, by contractors in Romania who did not have security clearance. When it ran a red-team operation to see how secure it was, they broke into the system easily. They would have been able to install malware, and they were not even detected by the people running the system.
What will happen when this system comes into effect is that the entire population’s entire data will be open to malevolent actors—foreign nations, ransomware criminals, malevolent hackers and even their own personal or political enemies. As a result, this will be worse than the Horizon scandal.
Emily Darlington (Milton Keynes Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Turner. For reasons of timing, I will not repeat what my hon. Friend the Member for Bassetlaw (Jo White) said about the important change in the relationship between citizen and state that could come from digital ID—putting the citizen in charge rather than the state knowing too much about us without our knowing what they know.
However, there is another reason why we might want a free, digital, Government-backed ID: £11 billion is lost each year to fraud, and ID theft costs us about £2 billion a year. People need to prove who they are at each and every moment. For too many people, that involves a passport or driver’s licence, which is not affordable for many. Having an ID that allows us to prove who we are could be more secure. We will also need it to show that we can work—there has been a 40% increase in illegal working—and to prove our age, including for the big changes made by the Online Safety Act 2023.
Peter Swallow (Bracknell) (Lab)
My hon. Friend raises the Online Safety Act. Some of my constituents have raised concerns about identity checks to access material online. Would it not have been far easier to prove one’s age online safely and securely if we already had a digital ID, and would that not have helped us to introduce safer checks online?
Emily Darlington
My hon. Friend is absolutely right. All the complaints I have received are about people giving their information to third-party verifiers. If they had a free, digital, Government-backed ID, they could have proved their age to access any over-18 content. People are also concerned that those who should not be accessing the NHS are doing so. The reality is that if there were a Government-backed digital ID, it would be clear whether a person can access the NHS.
I have come up with a list that debunks what the hon. Member for Perth and Kinross-shire (Pete Wishart) said, and I am happy to pass it to him afterwards. I think we need to add a few scientific facts, but I do not have time.
Emily Darlington
I am happy to go through it. First, it is not about centralising data. Rather, digital ID allows the citizen to access federated data. The data stays in the individual Departments; it does not stay on a card—this is not about a card. Digital ID adds a level of security to Government datasets. There is no travel or location data. There is no access to external providers. It uses sovereign tech that allows citizens to know what the Government hold and who is accessing it. There is no new data that the Government do not already hold, and a single login is actually better for a person to prove who they are with a digital ID.
Emily Darlington
I think the right hon. Member will find there is a split in the community because there is a lack of detail.
Emily Darlington
I agree, but there is a lack of detail. When we are at the beginning of the conversation and going out to consultation, which is exactly what we are doing, we have to ask the public what they want. Do they want either of the two scenarios that my hon. Friend the Member for Bassetlaw and I presented, or do they not want access to their Government data in a way that enables them to know what is happening, and so that they can prove who they are without having to pay for a passport or driver’s licence?
Stuart Anderson (South Shropshire) (Con)
We should start not by asking what the Government can do, but what the Government should do. Mandatory ID cards are an overreach and far above what any Government should be doing. I have reached out to my South Shropshire constituents with a survey to ask for their views, and they are strongly against it. Among the points they have raised is digital exclusion.
Gregory Stafford (Farnham and Bordon) (Con)
My hon. Friend mentions digital exclusion. Some 28% of people over the age of 75 do not have a smartphone. How are they going to access digital ID?
Stuart Anderson
My hon. Friend raises a valid point. That has been a concern in South Shropshire, where I have huge areas that do not have high-speed connectivity. A lot of elderly people are not able to use an iPhone or computer, so they feel that they will be digitally excluded. Whether it is mandatory or voluntary, it is still—
Stuart Anderson
The hon. Member has just highlighted the confusion around this. If the Government are considering hard copies, the costs could be into the billions of pounds, as the hon. Member for Perth and Kinross-shire (Pete Wishart) mentioned. There is no money, and there is not a problem in this area, so why create a problem, spending billions of pounds that the country does not have on something that no Government should be doing?
On the subject of digital exclusion, a large percentage of my population is not connected or does not use IT. My concern is whether the digitally-excluded pensioners in South Shropshire will be hounded by the police. Will the police be chasing them around, asking them to sign up? Will people find that they cannot get a job unless they have digital ID? There are huge concerns about this. [Interruption.] Members can shake their heads, but the scheme is being rolled out to stop illegal immigration. It is a dead cat story, and no Government should be looking to do this.
I have major concerns, and so do my constituents. I am worried about the security of the scheme. Look at China and Russia: we have continual cyber-attacks on the UK, as we have just seen with Jaguar Land Rover. With the advancement of AI, if we believe we can keep our data safe, why have spreadsheets been emailed to the Taliban? Mistakes happen, but imagine having the whole country’s data. It was done by a civil servant, and it is a disgrace it happened under whoever’s watch. We should not be joking about things like data going to the Taliban. This is a major issue. It is the start of an authoritarian Government, and I do not believe we should have any involvement with it. It should be cancelled straightaway.
Rachael Maskell (York Central) (Ind)
The public did not vote for this, and the country cannot afford it. When we look at the Government’s stated purpose, there is also no evidence behind it. If we are looking to scrutinise the grey economy, employers are ignoring the documentation whether it is digital or paper. Of course, we have to come down on employers that exploit labour and do not pay their taxes, but this scheme will simply not achieve the aims that have been presented.
When I meet digital experts and academics in my constituency who deal with encryption and the risk of data leakage, they say that 12,400 data breaches have happened in the last year—those figures are from the Information Commissioner’s Office. We know that there is no security. One thing the scheme has achieved is to unite my constituents. I am glad that the Government will consult, but this is not the way forward.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate. There is no doubt that this is a contentious issue for many, but the position of me and my party is clear. It is one of opposition at every stage. The intention of these online IDs is blurry, and it is completely the wrong approach to the issues that the Government claim the cards will target.
I have received hundreds of emails over the last month showing clear opposition to the introduction of these cards. Many have stated that digital ID schemes threaten to undo the tradition of British liberty and replace it with a bureaucratic checkpoint culture that completely undermines the democratic process. It is not just the older generations who object; the younger ones have also contacted me to object. They say, “We are private citizens, and this system of digital ID is oppressive.” Furthermore, there is the danger of potential cyber-hacking.
I am proud to be able to say to my constituents that I have stood against this draconian plan at every stage. I can look them in the face and say that my party and I have no plans to support this scheme—we never will—and the quicker the Minister catches on, the better.
Brian Leishman (Alloa and Grangemouth) (Ind)
The No. 1 issue facing this country is inequality. Civil liberties will potentially be infringed by the collection of private data. Millions of older people, people living in poverty and many disabled people will face digital exclusion. Of course, big tech corporations and their shareholders will be the real beneficiaries of the policy. There will be more inequality at home, and more taxpayers’ money going abroad.
However, the SNP’s hypocrisy on digital ID is frankly staggering. It wants Scotland to forget about the £7 million of taxpayers’ money spent on a covid vaccine passport that breached data privacy laws. Unlike the SNP, I have been and will continue to be consistent in my opposition to mandatory digital ID.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate. This is one of the most controversial and divisive issues currently supported by the Government, who have form. I am here on behalf of my constituents, as nearly 100 have written to me opposing the scheme, and nearly 4,000 have signed the e-petition.
We have heard the risks and the issues around data privacy, surveillance culture, user profiling, exclusion, focus creep and scope creep. Having worked in the IT industry for over 20 years, as well as in the cyber-security industry, I can say that there is no safe system at the moment. Relying on third-party software, owned by foreign states or companies—
Emily Darlington
Is the hon. Member aware of the Government’s statements that the system would be held internally and use sovereign tech?
David Davis
The tech has already been abroad. It has already been in Romania, and it is quite possible that malware is already inside it.
Iqbal Mohamed
One of the reasons for proposing the scheme was to give citizens and residents of the UK easy access to Government and public services. We have been crying out for joined-up government for decades, under the previous Government and the Labour Government before them. Our systems across Government Departments are islands of automation. They are separate—they do not connect; they do not talk to each other. Before this ID could be effective, we would need a fully integrated, safe, joined-up Government system with systems that talked to each other. There are people working in the NHS who have multiple log-ins to do their normal job. That is the environment that we are in.
My constituents and millions across this country are opposed to the scheme because they see the breach of their civil liberties but do not see the benefits of the scheme. The Government have not articulated them or the use cases. I asked the Secretary of State in the Chamber about what use cases the Government want to introduce the scheme for, about whether the prerequisites to deliver those use cases have been met, and about how the public can have guarantees about security, privacy and breach concerns before they are required, compulsorily, to sign up to the scheme.
The scheme needs detailed review. The pilots and previous attempts to implement such schemes have failed. They have exposed our country to third-party risks. Our data is already out there, and we cannot introduce a system that will make the rest of the data, which is not out there, easily accessible to those criminals.
Martin Wrigley (Newton Abbot) (LD)
The Government say that digital ID will eradicate illegal workers in the UK. It will not. Mandatory digital ID will not stop any more unscrupulous employers than does the check for the right to work in the UK, which is already in place. It is a vanity project that will cost the taxpayer billions of pounds and will not achieve the desired outcomes.
Adam Dance (Yeovil) (LD)
Does my hon. Friend agree that Labour needs to wake up? This scheme could put our personal data at risk, while costing taxpayers billions and doing little to restore public trust in the immigration service.
Martin Wrigley
I agree. Many of my local residents are still digitally excluded. Lack of mobile signal and in many places no fast internet access means that digital-only solutions leave too many people out in the cold.
Rachel Gilmour (Tiverton and Minehead) (LD)
Does my hon. Friend agree that the very idea of “Ihre Papiere, bitte” is not something that my constituents, or the British people more broadly, will stand for? That explains this cross-party opposition—which I, as a true Liberal, fully endorse.
Martin Wrigley
I agree with my hon. Friend’s point. The elderly, the disabled and those on low incomes are most likely to be adversely affected by this policy. The Government published a digital inclusion action plan in February 2025, but I hear from constituents that, seven months on, they have seen little or no improvement.
It appears that digital ID will be required not just for accessing employment but as a proof of right to rent, which risks placing additional burdens on people already marginalised in society. Mandatory digital ID also brings a deep unease about the growing relationship between the Government and large tech companies such as Palantir, Apple and Google. As a member of the Science, Innovation and Technology Committee, I have raised concerns about those relationships and have yet to receive satisfactory answers. Knowing that the Government are willing for those companies to hold and have access to such sensitive data is worrying. I will continue to push for answers and will oppose mandatory ID cards.
Richard Foord (Honiton and Sidmouth) (LD)
I have serious concerns about digital ID, based on civil liberties, data security and practical delivery. First, on civil liberties, we should remember that although we may live in a benign social democracy today, that cannot be guaranteed in the future. When bestowing new powers on Government, MPs have a responsibility to think about how those powers could be used. Secondly, on data security, when the Government centralise vast amounts of personal data, they create a target for hackers and cyber criminals.
Thirdly, there are the practicalities. One argument that the Government have advanced for digital ID is that it will help to crack down on illegal working. However, there are already requirements on employers to check that applicants have a right to work in the UK. Why would an employer who did not carry out a right-to-work check for, say, a passport, suddenly carry out such a check for digital ID?
Carla Lockhart (Upper Bann) (DUP)
Digital IDs are nothing short of a direct attack on our freedoms and I am utterly opposed to them. The claim that they will help to tackle illegal immigration is utter nonsense. If the Government were serious about that, the Prime Minister would strengthen border security, crack down on smugglers and traffickers, and invest in real enforcement. Quite frankly, digital IDs will not stop a single boat and they will not stop the endless cycle of people illegally entering the UK, mostly of working age, who do not want to work and will not work.
Digital IDs are not wanted by the people in my constituency of Upper Bann—they feel that it is “Big Brother is watching you” on steroids. At the end of the day, who pays for digital IDs but the ordinary people here in the United Kingdom? We have rejected digital IDs before and we will absolutely reject them again.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
When the Prime Minister unveiled this plan at the Global Progress Action Summit 2025, he referred to digital ID only as a tool for right-to-work checks; there was no mention of any linkage to public services. Within a matter of weeks, though, digital ID appears to have encompassed a disturbingly large part of people’s lives.
I was astounded to see the Secretary of State for Scotland on the BBC defending the sudden push for “Britcards” by comparing them to boarding passes, train tickets and Tesco clubcards, which are on many phones already. Every one of those things is available in physical form and a Tesco clubcard is clearly optional. That cannot be said for this “Britcard” scheme.
Ministers have repeatedly said that the scheme is not mandatory, yet the Prime Minister said it was mandatory for work purposes. He explicitly said:
“Let me spell it out: you will not be able to work in the United Kingdom if you do not have a digital ID.”
Surely, in anyone’s books that is mandatory.
One of the most glaring issues is the fact that digital ID is a rewiring of the relationship between citizen and state, and is being done without a democratic mandate. A “Britcard” is not wanted and is not needed. It is a waste of public money and should be consigned to the dustbin of history.
Gregory Stafford (Farnham and Bordon) (Con)
I recently conducted a local survey after being contacted by hundreds of constituents about this digital ID issue. The results were clear. Over two thirds of respondents opposed the introduction of mandatory digital ID, with the majority of them being “strongly” against it. Over 80% of respondents said that they believed such a system would infringe on personal privacy and do little to tackle illegal migration. Around 30% of respondents supported some form of digital identification, often for specific limited purposes. However, even among that group, most respondents said that they did not believe it would meaningfully address illegal migration or illegal working.
Stuart Anderson
Does my hon. Friend agree that the way this idea was launched is a complete smokescreen and did not reveal the real reason for digital ID? The real reason is to gain control over the British people.
Gregory Stafford
I agree with my hon. Friend. At a time when trust in Government is so low—I think that it was about 12% in the last poll—it is totally wrong for the Government to introduce such a reckless policy, which fundamentally affects personal freedom and privacy without a clear case, clear cost or, most importantly, clear consent, because it was not in the manifesto. My constituents feel that this decision is being forced on them without consultation, without explanation and without consent.
Like many others, I have deep concerns about privacy, data security and Government overreach. People are rightly worried that digital ID could pave the way for intrusion into areas such as banking, health records or even social credit-style monitoring.
Other Members have raised the issues around digital exclusion, which I entirely agree with, and most importantly the cost of the scheme. We must oppose digital ID every time that it comes in front of us. As has already been said, 3 million people have signed a public petition opposing digital ID. The message from my constituents and from the wider public is simple: the proposal is unwanted, unjustified and unwise. The Government should stop, listen and think again. My constituents demand transparency, safeguards and solid evidence that any proposed system will genuinely solve real problems without sacrificing privacy, liberty or fairness.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
It is a pleasure to serve under your chairmanship, Mr Turner.
At a time when public trust in politics is low and confidence in Government competence is falling, I cannot think of a worse idea than a mandatory and highly expensive digital ID scheme, which inevitably will have to be delivered by private sector consultants. Of course, citizens should benefit from digital innovation, but between them the UK Government and the Welsh Government still struggle to transfer patient data from Hereford to Brecon. That is what my constituents want—they want their hospital records to be able to come back from Hereford. With that low level of capability, why would anyone believe that this Government can securely and effectively deliver a national ID system?
Dr Roz Savage (South Cotswolds) (LD)
I have three key questions. Will ID cards reduce illegal work? Probably not. Secondly, what price are we willing to pay for convenience? This seems a very high one. Thirdly, should we wonder when a prominent advocate of digital ID receives large donations from silicon valley, which has already shown a blasé attitude to personal data?
Meanwhile, we are looking at high opportunity costs; potential hacks and attacks on our personal data; and a card that starts out voluntary but rapidly becomes mandatory in all but name. Above all, there is the question of trust: a future Government could easily repurpose a digital ID scheme as a tool of surveillance or control. That is precisely why this country abandoned compulsory ID cards in 1952. The Liberal Democrats believe that technology should serve citizens, not monitor them.
Victoria Collins (Harpenden and Berkhamsted) (LD)
It is a pleasure to serve under your chairmanship, Mr Turner. I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing this lively debate and eloquently sharing his views and concerns.
As Liberal Democrats, we hold a fundamental principle: freedoms belong to citizens by right. The Secretary of State spoke repeatedly about
“giving people power and control”.—[Official Report, 13 October 2025; Vol. 773, c. 87.]
But I ask the Minister—control over what and whom? This essentially mandatory digital ID for every person with the right to work in this country does not leave much choice or control.
My constituent Julie, from Harpenden, does not have a phone; she does not want one. That is her choice, but she has written to me deeply concerned that she will be excluded from society because of this digital ID policy. The Chief Secretary to the Prime Minister, the right hon. Member for Bristol North West (Darren Jones), cited that 93% of the population have a smartphone, as if that justified digital ID. That statistic means that approximately 4.5 million people—just like Julie—will not gain control but lose it.
As my hon. Friend the Member for North Norfolk (Steff Aquarone) rightly pushed for during debate on the data Bill, people must have the right to a non-digital identification. That includes the right to work with non-digital ID. Where is the fairness for people such as Julie in this mandatory system? That is before we consider the 8.5 million people working in the UK who lack even the most basic digital skills. Leon, who works in IT in Tring, sees this reality every day. He has written to me saying that many of his colleagues struggle with basic smartphone tasks—a digital ID will force them to navigate an entirely new system on top of that. What are the Government’s plans to upskill millions of workers, or will this yet again be another burden dumped on businesses?
Speaking of cost, experts are clear that the proposal will cost taxpayers billions, behind a trail of failed Government IT projects. Ask European citizens in the UK who have been plagued by the e-visa app’s failures, which have resulted in people being wrongly denied work, housing, education and welfare. Analysis commissioned by the Liberal Democrats shows that, of 24 major Whitehall schemes currently under way, two are already rated as undeliverable and 16 are facing significant issues. From NHS patient records to digital tax systems, the total cost of those failed or delayed projects already stands at more than £31 billion.
Ben Maguire (North Cornwall) (LD)
I have just come from a meeting with WASPI women here in Parliament who are asking for £3 billion in compensation, which they are rightly owed. The Government have said that they do not have that money—they have actually taken that group to court—yet here we are: they have pulled £2 billion out of the hat. Does my hon. Friend agree that the priorities are really wrong here?
Victoria Collins
Absolutely, and I was about to say that while frontline services are crumbling and people are needing those billions of pounds, we are seeing here is billions being spent, millions being excluded and freedoms eroded—and for what? How much taxpayer money are the Government prepared to waste on this scheme, for which they have no mandate and no public support? While those frontline services are bursting at the seams, the Government have squandered the opportunity to use technology to improve services by instead undermining trust, seemingly flip-flopping on this patchwork policy.
On 26 September, the Prime Minister announced digital ID with promises to control borders and tackle irregular migration. Last week, that narrative had all but vanished, with a shift to talking about anything from handling daycare to buying a drink. The Secretary of State herself admitted that digital ID would not be the “silver bullet” to end migration as initially promised; as the hon. Member for York Central (Rachael Maskell) highlighted, as did many others, we know it will not solve the problem. Meanwhile, the Foreign Secretary defended extending digital ID to 13-year-olds—something that the Government have still not ruled out.
Why are this Government so determined to press ahead? I support improving digital services on a voluntary basis, but we can modernise without mandating and must leave room for non-digital choice. Allegedly, this is about easier access to Government services, but surely we should be working on improving what we already have.
The gov.uk One Login, the voluntary gateway to digital Government, needs much improvement. As the right hon. Member for Goole and Pocklington (David Davis) highlighted, there are many concerns about security as well. Should we not fix those services, rather than create new ones?
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this timely and important debate, as well as his characteristically forceful and measured speech. It has been a fun debate with lots of contributions. I am sure there will be plenty more opportunities going forward, but I want to draw out a few particularly powerful contributions.
First, my hon. Friend the Member for South Shropshire (Stuart Anderson) pointed out the issues around the prevalence of digital exclusion and the use of the veteran card. Secondly, my right hon. Friend the Member for Goole and Pocklington (David Davis) rightly pointed out the issues that the gov.uk One Login has had. Thirdly, my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) pointed out the problem of the prevalence of digital poverty among the elderly. Finally, the hon. Member for Dewsbury and Batley (Iqbal Mohamed), who always speaks with great wisdom in these debates, spoke about the issue of multiple NHS logins.
This plan will make Government-issued digital ID compulsory to access work. Ignore the piffle—this is de facto mandatory. Given the contentious history of mandatory ID schemes in this country, one might have expected a policy of such weighty constitutional importance to appear in the Government’s manifesto, but it was conspicuously absent—like most current Government policy.
Earlier this year, I stood across the Dispatch Box from the previous Minister, debating the digital verification system brought in by the Data (Use and Access) Act 2025. That scheme created a trust framework for a register of approved providers of digital identity verification services. Building on the competitive ecosystem established by the last Government, private sector companies are already providing right to rent, right to work and many other identity checks.
Peter Fortune (Bromley and Biggin Hill) (Con)
Talking about the difference between the public and private sectors, does my hon. Friend agree that it is deeply concerning that, at a time of rising taxation and increasing Government debt, this Government cannot even tell us how much a digital ID scheme would cost?
Dr Spencer
The point is that we have a sector that is already developing voluntary ID schemes. It is now being let down by the Government, who are bringing in their own mandatory scheme. Not once in the course of previous debates did the Minister mention that the Government intend to launch their own mandatory digital ID system for the right to work or anything else, but the concerns with this policy go beyond questions of democratic legitimacy.
The National Audit Office’s report on Government cyber-resilience, published early this year, contains a number of concerning findings about serious gaps in cyber-security amongst Government Departments and public sector bodies. One of the most concerning is that the Cabinet Office does not have a strategy for how Government organisations could become cyber-resilient by 2030.
There is no current plan to secure the Government’s cyber-resilience over the very same timeframe that this mandatory Government-run identity scheme, which will host the data of every working person in the UK, will be rolled out. We are yet to hear from the Government a clear timescale for bringing their cyber-security and resilience Bill forwards.
Digital inclusion remains a challenge for many across this country and impacts vulnerable groups, such as those on low incomes and those with disabilities, the most. The Government’s policy of making digital ID mandatory to access work flies in the face of digital inclusion. The consideration given to digital exclusion being, “Well, we are going to consult on what to do,” as an afterthought is frankly shameful.
Digital inclusion was at the heart of the previous Government’s levelling-up ambitions. The Government published their own digital inclusion plan in February, which will be implemented over several years. Why not concentrate on putting that plan into effect, rather than diverting resources towards their own costly digital identity programme? Universal digital inclusion and robust cyber-security must be conditions precedent to any Government-run ID scheme. At the moment, we have neither.
We are left with a number of pressing questions. Why was this flagship policy not part of the Government’s election manifesto last year? Why has it been brought forward now? Why should it be mandatory rather than optional? Why are the Government pursuing a costly, Government-run ID scheme when the private sector infrastructure for digital ID services exists already? What is the Government’s plan to keep citizens’ data secure? Can the Minister guarantee that no one lawfully eligible to work will be excluded from employment by this scheme?
The Minister for Digital Government and Data (Ian Murray)
It is, as always, a great pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for his speech. It was a very good speech, but suffered from the big disadvantage of none of it being actually accurate in terms of what the policy is and what digital ID is supposed to be about.
Let me start by saying—I mean this seriously and I mean it passionately in my defence of Parliament and Government—that it is okay to debate these things. There is a huge number of people in Westminster Hall today who want to debate this subject. An hour may not be enough, and no doubt we will come back to these issues on several occasions. But there is something that is really important. There is a real task for us all to do as custodians of democracy, which is to have this debate from the perspective of the facts that are out there and not to peddle myths.
My hon. Friend the Member for Edinburgh South West (Dr Arthur) said clearly in an intervention that all we have heard is the myths. I hope I can bust some of those myths to give comfort to some of our constituents that this scheme is not what is being portrayed by the hon. Member for Perth and Kinross-shire and what we have heard in many of the contributions. We have a real responsibility to make sure that we have proper debates—with the facts, not with what we read on social media.
Mr Adnan Hussain (Blackburn) (Ind)
The Minister says that we are “custodians of democracy”. On the back of that, and in the light of his comments, I ask this: will the Government commit to a direct vote in the House, a free vote on the digital ID scheme before it is rolled out and becomes mandatory in any form? The public and their elected representatives deserve clarity and choice.
Ian Murray
A full consultation will be launched by the end of this year. There are two options that the Government could have taken. We could have started from the position of a fully fledged programme, a fully fledged policy, and then taken that out to consultation; or we could take the approach that we are doing at the moment, which is to go out to consultation after we have had some initial consultation with people, so that the formal consultation is shaped by people’s views and the concerns that they raise.
I will give two examples, which are from the island of Ireland and from Northern Ireland and in terms of the common travel area and the Good Friday agreement. These are things that have to be resolved. We now know they are big issues, and that will go into the consultation to try to resolve them. We cannot have it both ways. We have chosen to take this particular approach in order to develop a consultation—
Ian Murray
Let me make some progress and I will give way. I want to read Members this paragraph:
“We will develop and establish a trusted and secure service for users to prove who they are, and that they are eligible for a service. Users will be able to store their information and choose to share it when applying to public services. This will improve a user’s access to services by providing a safe and secure way to prove their identity, while reducing time and cost for the public sector. Additionally, we will develop an inclusive approach for all users to ensure that…services are available for”
all, particularly those who are digitally excluded. That is from the Scottish Government in 2021. The hon. Member for Perth and Kinross-shire’s own party as the Scottish Government is developing this; it is actually SNP policy.
Let me just bust some of the myths. This is not a Brit card. I know that members of the SNP like to call it a Brit card, because that is what gives them traction in the way in which they constitutionally do these things, but it is not a Brit card. And let me just deal with the issue about compulsion and mandation, because everyone stands up and calls this mandatory digital ID. It is not mandatory. That is the wrong thing to say to our constituents. It is not compulsory in this country to have a passport, but one is mandatory to travel. If someone wants to travel on a flight, even an internal flight, in this country, they require that ID to be able to travel. It is not compulsory to hold a passport, but it is mandatory to use one for travel. It is exactly the same in this particular instance. It is not compulsory to have one. People will not be asked to show it; they will not be asked to produce it. There is a whole host of use cases that would be voluntary—
Graham Leadbitter
The Prime Minister said that this was mandatory if people wanted to work in the UK, so for every single person who wants to work in the UK it is mandatory. Is that not pretty much a compulsory ID card?
Ian Murray
No, it is not. I cannot remember which hon. Gentleman made the point about over-75s not being digitally excluded. I do not know many over-75s who are looking for work, so if they do not want to have this, they do not need to have it. And for people who are particularly challenged in terms of mental capacity or otherwise, there will be a different system—
Ian Murray
Let me finish the first point. There will be available a system that is non-digital for people to use in those particular circumstances. In terms of the way the law works now, it is illegal for an employer to employ someone who does not have the right to work in this country. There is already a process for people to use passports or driving licences to prove their identification. If the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) wants his passport or driving licence held in some dusty filing cabinet and photocopied 400 times, rather than just proving his right to work in this country on his digital ID, I would suggest that that is less secure than having it on a smartphone.
Jim Shannon
How will the Minister and the Government react to the united political opposition from both sides of the community in Northern Ireland, nationalist and Unionist, to the ID card? How can the Minister and the Government pursue something that is so unanimously opposed by everyone in Northern Ireland?
Ian Murray
Let me address that point directly. I have already been to Northern Ireland and spoken to all parties in the Northern Ireland Executive, and I have also been to the Republic to speak to the Irish Government about the processes that they have. In fact, they are about to introduce a similar scheme, because all EU countries have to have a scheme up and running by 2026. We fully understand the Good Friday agreement, the common travel area and nationality in Northern Ireland—that people can be British, Irish or both—and that will all have to be built into the system. As a Government, we have taken on board those legitimate concerns—not the myths. I have heard them directly from all parties in Northern Ireland, and we will ensure that those are resolved as part of the process. I hope that the hon. Gentleman will join us in the consultation to make sure that those are resolved.
Martin Wrigley
It is not much of a consultation if the Government have already said, very vocally, that they are going to do it. It is really a question of how hard they want to beat people.
Ian Murray
Of course it is a consultation. It is about how we get this right, what it looks like, how it is built, how federated data is secured, how we deal with digital inclusion and how we deal with the issues in Northern Ireland. That is what the consultation is about. It is about the Government learning from that. [Interruption.] Liberal Democrat Members are heckling from a sedentary position, but their own leader, the right hon. Member for Kingston and Surbiton (Ed Davey), said on 21 September that “times have changed”, and that he had been impressed by a visit to Estonia, where a liberal Government had brought in digital ID. He said that if a system was
“giving individuals power to access public services”,
he could be in favour. Four days later, he said that
“the Liberal Democrats will fight against it tooth and nail”.
It is the same hypocrisy as the Scottish National party; it was their policy five days before they came out against it.
Victoria Collins
I would just highlight that what was stated was about the system being voluntary and about choice. We are saying that a mandatory system is a problem. Do this Government want to grow this economy or not? Do they want to give people who want to work a real choice? I do not see that at all.
Ian Murray
This is about reconnecting citizens with Government. Everyone will have constituents coming to every one of their surgeries with a form they cannot fill out, a piece of maladministration in public services, something they cannot access or a difficulty in getting access to benefits. There are still people in this country who are entitled to huge parts of the benefit system but do not claim. There are people who will need this for verification of identity and their age in buying alcohol—all those things that are a big inconvenience for people. This is about reconnecting citizens with Government—modernising government, as we have heard from the Opposition spokesperson, the hon. Member for Runnymede and Weybridge (Dr Spencer). It is about making sure that the Government can be effective and can be in the digital age with a digital population. This happens in many other countries around the world. I do not have time to run through all of them now, but hon. Members can look them up.
Let me take on two issues before I finish. The first is data and security. This is a federated data system, so I say to the hon. Member for Dewsbury and Batley (Iqbal Mohamed) that his idea of bringing it all together in one database is the wrong option. The data does not move; it sits with the Government Department, and the digital ID system, or whatever system is used, goes into those datasets and brings out affirmative or otherwise—
Ian Murray
I do not have time.
The system brings out affirmative or otherwise information in relation to the specific information that the system requires. Having one central database is the wrong approach; there would be security issues. The dataset is federated, and does not move from the home Departments. The system reaches in to get the data it requires and bring it into what it needs to do to answer the questions.
I fully understand the points made about digital inclusion; we all do. Governments have been talking about digital inclusion for far too long, and this is an opportunity to sort it once and for all. Where digital ID has been introduced, those in the most deprived communities, furthest away from Government services, have got the best access to them. Those who would not have had access before and geographically isolated communities, like those represented in Scotland by the hon. Member for Perth and Kinross-shire, have been connected the quickest and have had the greatest use from the connection to Government services.
The myths about digital inclusion, about safety and security, about the ID being called a Britcard, and about it being mandatory are not the case in terms of the policy. I look forward to everyone inputting into the consultation and the Government bringing forward the legislation in due course.
Question put and agreed to.
Resolved,
That this House has considered the matter of mandatory digital ID.