House of Commons
Speaker’s Statement
Mr Speaker
In March, I announced to the House that Tom Goldsmith, current Clerk of the House and head of the House of Commons service, had given notice that he will be leaving Parliament in the autumn. I am pleased to announce that, following a competitive recruitment process, Eve Samson, current Clerk of the Journals, has been appointed as the 53rd Clerk of the House of Commons, following the approval of His Majesty the King. I am sure that Members will join me in congratulating Eve, who has many outstanding qualities to bring to this important role. Having worked in the House with great dedication for almost 40 years, she brings a wealth of experience and insight and will be a distinguished successor to Tom Goldsmith.
Arrangements will be made for a comprehensive handover period before Eve formally takes up the role in November. Until then, Tom will continue to carry out his duties as Clerk of the House. There is always a lot of work to do, and we will make sure that Tom works hard. [Laughter.] There will also be an opportunity before then for colleagues to recognise more formally Tom’s contribution to the House and to wish him the very best in the future.
Oral Answers to Questions
(1 day, 4 hours ago)
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Steff Aquarone (North Norfolk) (LD)
The Secretary of State for Work and Pensions (Pat McFadden)
More than 1 million young people are currently not in education, employment or training. Youth employment in the UK has not reached its pre-financial crash level in any year since, and there has been a sharp rise in recent years in the number of young people not in education, employment or training. That is why we are investing an additional £2.5 billion over the next three years into the youth guarantee and the growth and skills levy.
Steff Aquarone
The Transport Committee’s “Buses connecting communities” inquiry heard about the significant impact that public transport connectivity has on unemployment. That is especially the case for young people in North Norfolk. It is a vicious cycle: poor connectivity creates poor prospects, and young people leave to start their careers elsewhere. How will the Secretary of State work with his colleagues across Government to make sure that young people in rural communities do not face extra barriers to unemployment compared with their urban peers, and will he commit to making sure that rural young people have a fair opportunity to thrive?
Pat McFadden
The hon. Member raises an important issue. Whenever I discuss youth unemployment and opportunity with MPs, they often identify transport links as a barrier. We are capping single bus fares at £3 on thousands of routes in England outside London until March 2027, but I believe that there is more that we can and should do, because he is right that connectivity is really important and is linked to opportunity.
Marsha De Cordova (Battersea) (Lab)
I thank my right hon. Friend the Secretary of State for his answers and the work he is leading on for young people. I recently visited a Jobcentre Plus office to meet the team and see some of the fantastic work they are doing to get our young people into work, but what struck me was that I had to visit a neighbouring constituency, because Battersea does not have its own office like that. Some of my constituents are having to take not one or two but three buses to get to that jobcentre when there is a perfectly good jobcentre in Wandsworth. What steps is my right hon. Friend taking to ensure that we remove all barriers so that transport and travel is not a challenge for our young people in getting into work?
Pat McFadden
I thank my hon. Friend not only for her question but for the wonderful work she has done and the advice she has given me on closing the disability employment gap and championing the rights of partially sighted people. She asks about access, which is important. Alongside our jobcentre network, we have mobile jobcentre vans, and over the next few years we will be opening 360 youth hubs to get services to where young people are in the local community.
Mr Peter Bedford (Mid Leicestershire) (Con)
Over 700,000 young people are now out of work. That figure is up 100,000 year on year, and the youth unemployment rate is now at over 16%—higher than at any point during the pandemic. As this is likely to be the ministerial team’s final question time, will the Secretary of State reflect on the damage that the Employment Rights Act 2025 and national insurance increases have had on youth unemployment? Behind all those figures are stories of young people not earning or learning. They do not need yet more billion-pound Government schemes. They need a growing economy with businesses that want to hire them. Will the next Government finally deliver that?
Pat McFadden
We have the second-fastest growing economy in the G7, we have 400,000 more people in work than we did last year and the number of young people in employment is up by 74,000 since the election. In the whole 14 years in which the hon. Member’s party was in power, it went up by only 1,000.
Steve Darling (Torbay) (LD)
In deprived coastal communities such as Torbay, the NHS and the Department for Work and Pensions can make up a significant part of the job offer, including entry-level jobs for young people. It was therefore disturbing to hear last week that almost 5,500 jobs could be moved or be at risk of redundancy across the United Kingdom. In Torquay, there are 130 jobs at Cotswold House with no prospect of being moved to another DWP location. Will the Secretary of State meet me to discuss those office closures and how young people can be helped into employment through employment with the DWP?
Pat McFadden
I appreciate that the DWP plays a role as a local employer, but it is important that we deliver our service as efficiently as possible on behalf of the taxpayer and that we get the maximum value for money for that. With regard to the hon. Member’s request, there has been an offer of a meeting with a Minister from the Department; I hope that he will take that up.
Bradley Thomas (Bromsgrove) (Con)
The Minister for Employment (Dame Diana Johnson)
The employment rate is 78.4% in rural areas, compared with 74.8% in urban areas, with job opportunities in agriculture, forestry, fishing, and scientific and technical sectors. Under this Government, economic inactivity among people aged 16 and over in rural areas has fallen by 0.8%, and through the new jobs and careers service we are providing more outreach in rural areas, including jobcentre vans, bringing employment support directly into rural communities.
Bradley Thomas
The picture that the Minister paints is not one that I recognise, and it is not one recognised by businesses in my constituency. Rural job opportunities have gone down, rural unemployment is up, and businesses routinely tell me that the increased cost of employment under this Government has directly contributed to their inability to continue recruiting. Does the Minister recognise that? Will she impart on the next Prime Minister the importance of a change of course?
Dame Diana Johnson
The question was about rural areas. It might be interesting and helpful for the hon. Member to reflect how under the last Government the number of jobs in agriculture—a key sector in rural areas—fell by 50,000 while under this Government it has risen by 5,000.
Paula Barker (Liverpool Wavertree) (Lab)
The Minister for Social Security and Disability (Sir Stephen Timms)
Being in work is the best way to avoid poverty. The benefit cap gives a modest but significant incentive to start work and then to progress in work. Some people cannot work, so the cap does not apply to people out of work on disability or caring benefits, but for others it remains in place.
Paula Barker
The abolition of the two-child limit by this Government was a key step in cutting child poverty, but some of the poorest families still see their benefit capped, and there are shockingly high levels of child poverty in parts of my constituency, with 70% of children in Arundel ward and 61% of those in Princes Park ward growing up in poverty. The cap hits families with high needs: two thirds are single-parent families, more than half of whom had a child under five and over a quarter had a child under two. They are often forced to turn to food banks to survive as a result. The Trussell Trust provided 1,300 food parcels to children in Liverpool Wavertree last year. Will the Government build on the abolition of the two-child limit and review the benefit cap to ensure that families with very young children are protected from poverty?
Sir Stephen Timms
We will certainly keep the policy under review, but at the moment too many people are in poverty through being out of work, and the cap does help by increasing the incentive to work. My hon. Friend is right to highlight the scrapping of the two-child limit—2 million children will gain overall from that. There are 50,000 capped households who will not see a gain, but a large number will. One other point I should make is that childcare support within universal credit is not affected by the cap, so that is of further help.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
The House of Commons Library, quoting the Joseph Rowntree Foundation, reports that child poverty rates in Scotland are much lower than in England, at 23% compared with 31%, due at least in part to the Scottish child payment. In the light of this Government’s mission to tackle the scourge of child poverty, can the Minister describe what measures the Government are planning, in addition to the abolition of the two-child cap—for example, scrapping the infamous bedroom tax?
Sir Stephen Timms
The hon. Member is right that the scrapping of the two-child limit is the key measure and will lead to 450,000 children moving out of poverty. Other measures in our child poverty strategy that we published last year will increase that number by another 100,000. That is going to be very welcome progress in Scotland as well as in the rest of the UK, and we will be keeping policies under review.
Helen Whately (Faversham and Mid Kent) (Con)
Well, there we heard it a moment ago: a Labour Back Bencher calling for yet more money to be spent on benefits. What we should be doing is talking about all the households who are avoiding the cap, when 100,000 households get over—
Mr Speaker
Order. We have to be very careful with our language, especially when you are on the panel of Chairs.
Helen Whately
Some 100,000 households get over £50,000 in benefits, and 16,000 households get over £60,000 in benefits. That gives them the same income as the top 10% of earners in this country. British people are sick and tired of footing the bill for “Benefits Street” and seeing welfare claimants living lives of luxury at their expense. The right hon. Member for Makerfield (Andy Burnham) has called for more collaborative politics, so will the Minister adopt our plan to toughen up the benefits cap and save £1 billion off the benefits bill?
Sir Stephen Timms
If there is a plan, I would be very interested to see it. We certainly have not seen any details of it. The hon. Member’s comments are a further example of her expressing dissatisfaction with the system left behind by her Government after 14 years. We are reforming the system and making sure it is doing the job we need it to do, and we will carry on with that programme of reform.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
Chris Vince (Harlow) (Lab/Co-op)
Josh Dean (Hertford and Stortford) (Lab)
Jim Dickson (Dartford) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years. The areas involved, including Harlow, Cardiff, Dartford and east Hertfordshire, will see new youth hubs opening in local sports clubs, libraries and other venues. Wherever MPs get a youth hub, I encourage them to work with their jobcentres and with local organisations to confirm venues and begin delivery of these important services.
Mr Barros-Curtis
I thank my right hon. Friend for that brilliant news, and I hope that they will focus on mathematics skills as well—I could do with some of that. Young people were left behind by the previous Conservative Government, with 13.2% in south-east Wales not in employment, education or training. Youth hubs offer personalised wraparound employment, skills and wellbeing support in targeted areas, so does the Secretary of State agree that the new youth facilities in Cardiff football club and Ely in my constituency, with proper consultation, are a clear demonstration of Labour fixing the mess left by the Conservatives and giving young people the best opportunity in life?
Pat McFadden
My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training. We are doing that by providing incentives for employers to hire, promoting apprenticeships and delivering a whole range of targeted programmes. Another important point about youth hubs is that they are not just available to people already signing on and on benefits; a significant proportion of young people not in education, employment or training are not claiming benefits, and the youth hubs are open to all of them, too.
Chris Vince
As you will be aware, Mr Speaker, my Harlow constituency is full of incredibly talented young people, some of whom I had the pleasure to meet at a recent Harlow college awards ceremony. Alan Milburn’s report makes it clear that young people are being let down by a broken system and deep-seated barriers, rather than by their own ambition, so will the Secretary of State outline how a youth hub in my constituency will make a massive difference to young people in Harlow, ensure that they get the skills that local employers are looking for, and build on the great work done by Harlow college?
Pat McFadden
My hon. Friend is a great champion of Harlow and the people of Harlow, and I believe he will make maximum use of the youth hub to advance opportunities for young people in his constituency. We are committed to giving the young people of Harlow the best possible chance in life. I recently visited the Netherlands, which has a youth inactivity rate significantly lower than ours, and youth hubs are an important part of its effort.
Josh Dean
There is already much excitement in my community that East Herts will be home to one of the new youth hubs being rolled out by this Labour Government. I represent a semi-rural area where young people often have to make significant journeys across or even outside the constituency to access the services and support they need. Rurality can be a barrier to finding support and work, so will the Minister say a little more about how the Department’s model for youth hubs will account for it? Does a youth hub have to be in one location or can it be split across multiple venues if the interest is there?
Pat McFadden
My hon. Friend raises an important point. As I said, we recognise that transport can be a real barrier for young people in rural areas, so we have designed youth hubs to be flexible and to work with local partners on tailoring delivery for what works best in each area. That can include offering more flexible opening hours or choosing locations that align with local transport patterns. The whole idea is to meet people where they are in the community and make services as easy as possible for them to use.
Jim Dickson
Constituents in Dartford are also pleased that our area has been chosen as one of the local authorities to receive a youth hub. We have a growing population of under-25s, all of whom are talented and enthusiastic and want to get into the workplace. Will the Secretary of State set out when that hub is likely to open, what services will be available and what difference it will make to the lives of young people in Dartford?
Pat McFadden
The Dartford youth hub is scheduled to open in the next financial year, and it will bring together a range of support. Youth hubs include mental health support, housing support, and skills and career opportunities all in one place. The whole idea is that people do not lives their lives according to departmental boundaries, and the way that we help them should understand that and bring these departmental boundaries together. Our evaluation shows that young people at youth hubs are more likely to progress towards employment, and two thirds report that the support met their specific needs.
Dame Caroline Dinenage (Gosport) (Con)
I cannot help thinking that, with youth hubs, the Government are trying to fix a problem of their own creation. The amount of young unemployed people in my constituency has gone up 23% since the Government took office in July 2024. Can I just let that figure sink in? Twenty-three per cent. The Secretary of State should be ashamed of what he has done to young people in the Gosport constituency. How has he done that? He has done it by ensuring that all the businesses that give young people the first foot on the employment ladder—hospitality, childcare or hair and beauty—have been poleaxed by the actions of this Government. Only this morning we heard—[Interruption.] Thank you, Mr Speaker. We heard the Prime Minister-in-waiting talking about the importance of creating growth. When will they realise that only businesses create growth, so get out of their way and let them do it?
Pat McFadden
As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election. It only went up by 1,000 during the Conservative party’s 14 years in power. From tomorrow, we will open a process of hiring incentives of £3,000 for any business that wants to take on a young person who has been out of work for six months or more. Shame is not the emotion I feel; it is passion for opening up work and opportunity to more young people, and that is what we are doing.
Sir Julian Lewis (New Forest East) (Con)
With the impeccable timing of an Olympic medallist and world record beater, the inspirational Fatima Whitbread is in Parliament today in room U in Portcullis House till 4 pm, stressing the importance for people like herself brought up in the care system of wraparound local authority hubs working with and including the education, sport, police and charity sectors. Will a member of the ministerial team—preferably more than one—take the trouble to leave this Chamber when questions end and go over and talk to Fatima about her interesting and constructive ideas in this important field?
Mr Speaker
I am not quite sure about the question, though it was a good twist on getting there.
Pat McFadden
Congratulations to Fatima Whitbread—a great British and Olympic hero. The right hon. Member is right about the importance of opportunity for care leavers from wraparound care—we are keen to do that. We want not just to help young people into work, but to help them after they have found work. We will certainly try to ensure that a member of the ministerial team calls into the event that he mentioned.
Gideon Amos (Taunton and Wellington) (LD)
One of the key routes into employment that youth hubs can provide is supported internships. Will the Minister congratulate Young Somerset on helping people who have been failed by the education system into secure employment through supported internships? Will someone from the ministerial team meet me and Young Somerset to discuss cuts in funding and the reduction of those supported internships?
Pat McFadden
I am happy to congratulate Young Somerset on supported internships. I am sure the hon. Member will get a meeting with somebody in the ministerial team. As for his call for more funding, that has to sit alongside the many calls we have for more funding in this House every day.
Robin Swann (South Antrim) (UUP)
I recently met Voices for Impacts youth advisory group in Glengormley. Unfortunately, the funding for its youth centre has been cut to one night per week. What encouragement can the Secretary of State give those young people that the youth hubs he is talking about can be extended to Northern Ireland?
Pat McFadden
I believe that these youth hubs are applicable to every part of the United Kingdom. Well done to the organisation in Glengormley that the hon. Member mentioned. Of course, the Northern Ireland Executive has its own funding, too, and many matters are devolved. But wherever young people are in the United Kingdom, I want them to know that this is a Government that wants to see more opportunity and more work for them and a helping hand to get them on that first vital step on the career ladder, which is often a good first job.
Andrew Pakes (Peterborough) (Lab/Co-op)
The Secretary of State for Work and Pensions (Pat McFadden)
As I said, earlier this spring we announced the expansion of youth hubs to all planned areas and the launch of phase one of the jobs guarantee for the long-term unemployed, first in six areas and later to the whole country. From today, we are rolling out expanded employment support for young people on universal credit to all jobcentres in Britain. As I mentioned, from tomorrow, we are opening the youth jobs grant, which will give employers a £3,000 hiring bonus to take on a young person who has been out of work for six months or more.
Andrew Pakes
The youth guarantee will play a crucial part in a city such as Peterborough where for too long, too many young people have been starting their adult life on benefits without the necessary skills. Just this month, the Minister for Social Security and Disability, my right hon. Friend the Member for East Ham (Sir Stephen Timms), cut the ribbon on the BRDG, a new partnership between Peterborough College, Inspire2Ignite and businesses to create more opportunities for young people, but we want to go further. Working with Inspire2Ignite, we are bringing together businesses, civic sector charities and others to launch the 3% club to cut the NEET level in Cambridgeshire to 3% and give young people the opportunities they need. Will my right hon. Friend explain how the Department can support frontline innovation and partnerships like that one? Will a Minister meet me with Inspire2Ignite and listen to the voices of young people as we turn this situation around?
Pat McFadden
I thank my hon. Friend for his commitment to expanding opportunity for young people in his constituency and to reducing the NEET youth rate. As he knows, I was pleased to open the Peterborough youth hub some months ago, and my Department is working with the Cambridgeshire and Peterborough strategic authority on the youth guarantee trailblazer. I congratulate Inspire2Ignite. I value positive feedback from the Minister’s visit to the BRDG site, and I will ensure that my hon. Friend gets a meeting with a Minister to discuss these issues further.
Rishi Sunak (Richmond and Northallerton) (Con)
My local businesses such as Labman in Stokesley, Barkers and Sam Turner & Sons in Northallerton, and Metcalfe Farms in Leyburn are all excellent at providing opportunity for young people through apprenticeships. I note that the Government have introduced a welcome hiring incentive for the smallest businesses to take on young people, so will the Secretary of State congratulate my local businesses that are doing just that? Will the Government learn lessons from the kickstart scheme, which I believe the guarantee is somewhat modelled on, because we discovered that it is better to have an easy application process for the smallest businesses, to speed uptake and to ensure that they are aware of such initiatives? Such schemes are very beneficial, but we must ensure that businesses are aware of them and take them up to benefit young people.
Pat McFadden
I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use. That is something I have stressed to my officials; it is important that this scheme is simple to apply for. The money will be given in two instalments—one in the second month, and one in the fifth month—to ensure that hiring is sustained, but I entirely agree that good policy should be matched by a simple application process.
Rebecca Smith (South West Devon) (Con)
I am not surprised that Labour Ministers and Back Benchers are patting themselves on the back for their youth guarantee, but it is a sticking plaster solution to a problem of their own creation. Rather than U-turn on their triple whammy of increased business costs, higher national insurance, higher wages and higher business rates, the Government would rather use the state to subsidise jobs for the same young people who businesses can no longer afford to employ. Will the Secretary of State finally concede that no amount of Government work programmes can undo the damage that they have done to the labour market and to opportunities for young people?
Pat McFadden
In his review Alan Milburn considered that issue and said that,
“the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.”
As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election. Our policies are designed to help business rally to the cause of getting more young people into work, and I am pleased that we are introducing hiring incentives of £3,000 to help businesses take on a young unemployed person who has been out of work for six months or more. There is a good reason to target that group with opportunity, because the longer people are on those benefits, the greater the consequences that can have for their lives in the long term. Their whole future is in front of them, which is why it is right that we help them.
John Milne (Horsham) (LD)
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
The Government are committed to improving data sharing with local authorities, as part of our endeavours to improve services. We are taking forward work with local authorities on the “identifying local vulnerability” project, and that work will support enhanced data sharing across local and central Government. Work has already taken place to establish customer needs and ways of working, and future stages will focus on ensuring that the best technological solution is deployed.
John Milne
As the Minister knows all too well, the DWP’s shortcomings can end in tragedy. Errol Graham was a benefits claimant who starved to death without heating, electricity or adequate food. His local council, his housing association, his GP and the DWP all held information highlighting risk, and if only they had been able to share it he would be alive today. The ILV project can show the whole picture, but the trial has faced delay after delay. Will the Minister commit to a firm delivery deadline?
Andrew Western
The hon. Gentleman is correct to recognise the importance of this work. Data sharing with local authorities is essential, particularly working on homelessness prevention, on young people not in education, employment or training and on supporting families. There is a rich seam here if we get this work right, and we expect to see early benefits from the roll-out of the scheme by 2027.
Perran Moon (Camborne and Redruth) (Lab)
In January, Storm Goretti slammed into Cornwall, bringing down trees and phonelines, and cutting off individual communities. I was shocked to hear about the story of an elderly couple who were trapped in their bedroom because their stairlift had broken, so villagers had to winch food to them for the weekend. What lessons have been learned from Storm Goretti in relation to the vulnerability project?
Andrew Western
I share my hon. Friend’s shock and horror at that particular episode. If he sends me further details of that specific case, I will ensure it is fed into that work. From the data sharing that will be available, I envisage that there will be an ability to recognise where there is a particular and urgent need for access to services, such as the crisis resilience fund. If he writes to me in more detail, I will ensure that any lessons that can be learned are fed in.
Ian Byrne (Liverpool West Derby) (Lab)
The Minister for Employment (Dame Diana Johnson)
The Department publishes data on universal credit and keeps labour market trends under review. In January 2026, 3.1 million people were on universal credit in employment, representing 37.8% of all claimants. Universal credit is designed to support people into and in work, allowing individuals to move into employment while continuing to receive support as their earnings increase.
Ian Byrne
As the proud parliamentary lead for the Right To Food UK Commission, I have heard powerful testimony from workers employed by large, profitable companies across the UK who are paid so little that they are driven to hardship, hunger and dependence on universal credit just to put food on the table. The DWP assesses that 1.2 million people on universal credit are working to their capacity, with their income topped up by the state because their wages are so low. That figure has increased threefold in six years. Does the Minister agree that the taxpayer should not be left to subsidise poverty pay paid by companies that employ more than 250 people? Will the Government require those companies to report on how many of their workers rely on universal credit because their wages are so low?
Dame Diana Johnson
I acknowledge what my hon. Friend says and I commend him for his work on the Right to Food UK Commission. I know that many people who work very hard doing important work in sectors like retail and care do not earn enough, so at the end of the week there is insufficient money and they rely on foodbanks. I invite my hon. Friend to come and talk to me about this so that we can discuss what we might be able to do about it.
Tim Farron (Westmorland and Lonsdale) (LD)
The University of Cumbria has shown that average hill farm incomes are less than the national minimum wage in our communities and beyond. Despite their poverty, farmers of all kinds and small businesses often cannot claim universal credit at all because of the way that universal credit is assessed on the basis of monthly income, when they might have fluctuating annual income. Will the Minister meet me and farmers’ representatives to ensure that farmers in poverty get the support that they deserve?
Dame Diana Johnson
Yes, I am very happy to meet the hon. Gentleman.
John Whitby (Derbyshire Dales) (Lab)
The Minister for Social Security and Disability (Sir Stephen Timms)
We have been reminded already this afternoon of the experiences of Fatima Whitbread. Work is under way across Government to give care leavers access to the skills and wider support for sustained employment and career progression. Lower universal credit rates for younger claimants strengthen work incentives and encourage increased earnings over time.
John Whitby
This Government are rightly committed to breaking down barriers to opportunity, but care leavers still face disproportionate challenges as they move into independent adulthood. Will the Minister commit to reviewing the universal credit age-related rates for care leavers, with a view to ensuring that all 18 to 24-year-old care leavers receive the same rate of UC as those aged 25 and over?
Sir Stephen Timms
It is very important that we do not weaken the incentives for care leavers to start work and to progress once they are in work. At the moment, 40% of young care leavers are not in employment, education or training. That is a horrific statistic, so our response is to provide tailored Jobcentre Plus support. We also have the new youth jobs grant of £3,000, which my right hon. Friend the Secretary of State has referred to, which will be available from tomorrow. Care leavers under the age of 25 are eligible for the one-bedroom local housing allowance rate, rather than the shared accommodation rate, so there is a financial benefit there, but our focus is rightly on support into work.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for his answers, as always. In Northern Ireland, care leavers are really untold heroes in the work that they do. Many of us, in all our communities, understand the delivery of care that is provided. In relation to young people, has the Minister had an opportunity to talk to the relevant Minister in Northern Ireland to ensure that we can move forward with the speed that he seems to indicate? I understand that there are 19,000 young people between the ages of 16 and 24 in Northern Ireland without any employment, so there may be an opportunity here to do better.
Sir Stephen Timms
I would be delighted to have that conversation. I speak regularly to the Minister in Northern Ireland about matters in my portfolio, and I would be happy to cover this matter in our next conversation.
Rachael Maskell (York Central) (Lab/Co-op)
The Minister for Employment (Dame Diana Johnson)
I thank my hon. Friend for her interest in this area. Through our child poverty strategy, we are already taking substantial action, including the expansion of free school meals eligibility, the removal of the two-child limit and the introduction of the £1 billion crisis and resilience fund. Actions in the strategy will lift 550,000 children out of poverty in ’29-30, and the removal of the two-child limit could benefit around 1,650 children in York Central.
Rachael Maskell
Lifting children out of poverty will be this Government’s greatest legacy. However, we know that around 4 million children will remain in poverty, so it is really important to go further. Last year, the former Prime Minister Gordon Brown suggested a levy on the gambling and betting industry to raise £3 billion and lift another 500,000 children out of poverty. Will the Minister ensure we do even more so that we have a greater legacy and ensure that the lives of those young people are changed forever because of the decisions of this Government?
Dame Diana Johnson
Like my hon. Friend, I am very proud of what the child poverty strategy will deliver. It may be worth reflecting on what the Chancellor said about child poverty at the end of last year in the Budget. She said that
“because I am tackling fraud and error in our welfare system, cracking down on tax avoidance and reforming gambling taxation, I can announce today, fully costed and fully funded, the removal of the two-child limit in full from April.”—[Official Report, 26 November 2025; Vol. 776, c. 397.]
I hope that reassures my hon. Friend that that was taken into account in the decisions taken by the Chancellor.
Zöe Franklin (Guildford) (LD)
It was interesting to hear the Minister’s comments in relation to the last question. In assessing progress on reducing levels of child poverty, what assessment has been made of hidden pockets of deprivation in places such as my own constituency? Overall child poverty in Guildford after housing costs is 13.2%, but in some of the neighbourhoods in my constituency, including the one where I was previously a councillor, that number rises to 50%. I continue to find that deeply shocking, and it presents very specific challenges in areas such as mine. What steps are the Government taking to ensure that children living in these pockets are not overlooked by their own policy?
Dame Diana Johnson
The hon. Lady raises a very important point. The child poverty strategy is a 10-year strategy. We are very clear that, as Ministers across Government, we need to be looking at all areas of what Government can do to address child poverty, and there is a key measure around deep material poverty that we need to look at. It is really important that we work with local councils, combined authorities and mayors, because there is some really good work going on in local areas to address those pockets, which might be missed in the overall picture. Local areas are very well aware of where more work needs to happen.
Chris Bloore (Redditch) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
Losing a loved one is deeply distressing. DWP provides support through the bereavement support payment—a tax-free lump sum with up to 18 monthly payments for eligible partners. Help with funeral costs is available through the funeral expenses payment for those receiving income-related benefits. Additional support that may be available includes the bereavement run-on in universal credit, which extends support after the death of a partner, child or another adult in the household.
Chris Bloore
As the Minister probably knows, a petition calling for reform of the bereavement support payment has now passed 100,000 signatures and is backed by Widowed and Young, Gingerbread, and Cruse. Many families in Redditch are among those affected. Before the parliamentary debate on that petition, will the Minister engage with Widows Fight UK to ensure that all families facing this unbearable heartbreak have the support they deserve?
Andrew Western
I recognise the strong interest in this issue. I was aware of the petition, as well as the campaigning work that my hon. Friend has done in this space. I am very happy to receive any information that that organisation wishes to send to me in advance of the debate on the petition, and I look forward to participating in it.
Manuela Perteghella (Stratford-on-Avon) (LD)
I recently met members of bereaved families in my constituency, including Joe. They told me about the distress of knowing, while they are grieving, that the bereavement support payment ends after just 18 months, and despite the rising cost of living since the payment was introduced in 2017, it has not been uprated for 2026-27. Will the Government commit to uprate the support payment in line with inflation and review the 18-month limit?
Andrew Western
The hon. Member raises an important point. BSP is reviewed annually as part of the wider uprating process, so it would not be appropriate for me to make that commitment today. BSP is limited to 18 months because it is designed to support the acute period following bereavement. Longer-term financial support is delivered through the wider welfare system to those who are eligible, including universal credit and child benefit, and through other forms of local support where appropriate.
Andrew Rosindell (Romford) (Reform)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
The Government are committed to supporting British pensioners to enjoy a comfortable retirement after a lifetime of work. That is why we are raising the state pension throughout this Parliament via the triple lock. That saw the state pension increase by 4.8% in April, boosting the level of the new state pension by £575 a year.
Andrew Rosindell
I thank the Minister for his reply, but he will know that my borough of Havering has the second largest number of older people in the entirety of Greater London. Nearly a quarter of my constituents are within that age bracket, and they are losing out. I know that the Government’s policy on the winter fuel allowance has changed, but it frightened them and made them ask whether Labour is really on their side. Will the Minister assure my constituents that the next Labour Administration will not target pensioners, but will give them the respect they deserve, and ensure that they have a happy and healthy retirement?
Torsten Bell
I can give the hon. Member the assurance he asks for, which is that this Labour Administration, like all Labour Administrations, are on the side of pensioners. Of course, he only defected earlier this year, so he was a Conservative MP during all 14 years of the Conservative party’s disastrous last Government—a Government who saw pensioner poverty rise and left one in five of those aged over 75 on NHS waiting lists. That is what letting down pensioners looks like.
Luke Akehurst (North Durham) (Lab)
Can the Minister set out what plans he has to make sure that today’s workers—tomorrow’s pensioners—enjoy a decent retirement?
Torsten Bell
That is a very important question. We need to make sure that those who will retire in 2050 can look forward to the same kind of comfortable retirements that many—not all, but many—of today’s pensioners enjoy, and the honest answer is that we are not on track for that at the moment. This Government are taking a two-stage approach. We are driving up returns on pension savings now—that is what the Pensions Schemes Act 2026 does—but we are also doing the longer-term work through the Pensions Commission to look at exactly the question of how we make sure that tomorrow’s pensioners can enjoy comfortable retirements. I promise that the commission will bring forward its report early next year.
Mark Garnier (Wyre Forest) (Con)
The Pensions Minister likes to spend a lot of time criticising the previous Government for their actions on pensioners. He also spends an awful lot of time talking up his legacy on helping pensioners, but his actions simply do not reflect the narrative. So far, he has capped salary sacrifice, there have been delays to the pensions dashboards, we have had retrospective changes to inheritance tax on pension pots, and—as we have heard—the Government are chasing hard-up pensioners for their winter fuel allowance. All of this creates uncertainty among savers and pensioners alike, so I will repeat the question asked by the hon. Member for Romford (Andrew Rosindell): is the Pensions Minister hopeful that his successor will do a better job of looking after pensioners?
Torsten Bell
I am incredibly hopeful that this Government are doing a much better job than the previous Government in supporting pensioners, not only by driving up the state pension, but by getting on with the much delayed reforms to our defined-contribution pension system, which the previous Government left on ice. We are also coming forward with something much more important, because the biggest betrayal of older generations in Britain today is the state in which the Conservatives left our national health service.
John Cooper (Dumfries and Galloway) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
Overall levels of fraud and error are the lowest since the pandemic at 3.2%, compared with the peak of 4.3% in financial year end 2022. That reduction of a quarter demonstrates sustained progress with our fraud and error measures. Building on that success, we have set a new ambition to reduce the rate to 2.8% by 2028-29, which would be the lowest cross-welfare overpayment rate since tax credits were introduced in 2003.
John Cooper
In Scotland, benefit fraud has effectively been decriminalised; the number of prosecutions is vanishingly small. Given that the Department for Work and Pensions continues to have a role in Scotland—administering some benefits, despite devolution—what can the Department do to tackle fraud there? It is happening here, and we have a two-tier system in Scotland.
Andrew Western
If the hon. Gentleman has specific concerns about how benefits are being administered and fraud is being investigated through the powers of the Scottish Parliament, I would very much appreciate it if he could write to me. In some instances, the way in which the Department and our Scottish Government counterparts will be investigating fraud means that we are now teed up to intervene at an earlier stage, where a number of the issues can be less serious. We can detect and act at a much earlier stage. That is beneficial in reducing fraud and for claimants.
Tom Collins (Worcester) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year. Earlier this month, I visited the Netherlands to see the impressive work of the Dutch Government to ensure that youth inactivity is a last resort, and I think there is much that we can learn. Finally, I put on record my thanks and best wishes to Sir Peter Schofield, the outgoing permanent secretary of the Department. He leaves after more than eight years at the helm of the DWP. I look forward to working with his successor, Dame Sarah Healey, who will be joining us as the new permanent secretary shortly.
Tom Collins
This Government have set out to change culture across the DWP in order to make it far more focused on people, not faceless processes. However, in my constituency of Worcester, people are finding that when DWP services have made mistakes, the reaction continues to be delay, denial and sometimes outright refusal to fix errors. What is the Secretary of State doing to improve the attitudes, values and approaches of frontline client-facing services?
Pat McFadden
It is important to treat customers properly and fairly and to remember that the DWP deals with some of the most vulnerable people in society. The Department takes safeguarding seriously. We have increased training, particularly for those involved in health assessments. If there are specific cases that my hon. Friend wishes to draw to my attention, I encourage him to provide me with the details.
Helen Whately (Faversham and Mid Kent) (Con)
I associate myself and those on the Opposition Benches with the Secretary of State’s comments about the outgoing permanent secretary of the Department for Work and Pensions. I am sorry that this may be my last exchange with the Secretary of State, as we await the coronation of the king in the north and the appointment of his new team. I hope that the right hon. Gentleman is not sacked for telling the truth about his fellow Labour MPs, who just want to put up taxes to pay for more benefits. Does he think that our next Prime Minister will have the courage to take on those Labour MPs and bring down the benefits bill, or will the new PM bottle it like his predecessor did?
Pat McFadden
I enjoy our exchanges, and I welcome the opportunity that the shadow Secretary of State has given me to point out that in the past year I have said time and again that we have to change the question that the system asks from “What benefits are you entitled to?” to “How do we help you change your life?” The debate on how we reform the system has changed to one in which we are putting opportunity and work at the centre of what we do. That is what we are doing with the youth guarantee, and that is what we will continue to do.
Helen Whately
I heard no commitment from the Secretary of State that the benefits bill was going to come down any time soon. Labour can change its leader, but it is still the same old welfare party.
The right hon. Member for Makerfield (Andy Burnham) told us this morning that he is going to bring “Manchesterism” to the whole country. In Manchester, he is spending nearly three quarters of a million pounds on helping asylum seekers to claim benefits. British people are tired of seeing their hard-earned money being spent on handouts to foreigners. We cannot be a cash machine for the world. Does the Secretary of State think that this is a good use of taxpayers’ money?
Pat McFadden
Of course, people should only receive benefits if they are properly entitled to and qualified for them. All this has to be underpinned by our being as caring and as passionate about wealth creation as we are about fair wealth distribution. That is what unites Labour people. We are asking the right questions, while the hon. Lady is still asking the wrong ones.
Josh Dean (Hertford and Stortford) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
My hon. Friend has made an important point. The Child Maintenance Service is committed to ensuring that separated parents support their children financially, and to ensuring that the assessment reflects the parents’ true income. I am not familiar with the specifics of the case that my hon. Friend has raised, but my general view is that while enforcement powers are adequate, case complexity is often the challenge when it comes to proving where money is owed. If my hon. Friend wants to write to me about that specific case, I would be happy to look into it further on his behalf.
Steve Darling (Torbay) (LD)
I welcome the Government’s acceptance of a finding from the Liz Sayce review of carer’s allowance overpayments in respect of the underuse of waivers, given that the households concerned are often the most vulnerable in society. Has a review of the use of waivers been undertaken, and what changes have been made for frontline staff?
The Minister for Social Security and Disability (Sir Stephen Timms)
As the hon. Member knows, we are working through the cases of those who were required to repay an overpayment over recent years. I am receiving an update every week on the number of cases that have been gone through and the number of people who have had an overpayment reduced or cancelled, and I would be happy to give the hon. Member further information about the progress of that work.
Mr Toby Perkins (Chesterfield) (Lab)
Pat McFadden
My hon. Friend has raised an important point. This has to be a joint effort between the Government and employers. We had a great roundtable at No. 10 this morning with employers who are committed to expanding youth opportunity, and I have visited Merlin, an important leisure and hospitality business, which has agreed to take on 300 young people through our youth guarantee measures. Other businesses are signing up as well, and I encourage as many as possible to do so.
Andrew Rosindell (Romford) (Reform)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
I recognise the hon. Gentleman’s point, and we need to fund the NHS to stop letting down older generations. Taxes have consequences that affect the whole population, including pensioners. The Chancellor has set out that the level of the personal allowance will remain above the level of the new and the basic state pension—the headline rates—throughout this year. In future years we will ensure that we ease the administrative burden for pensioners who have small amounts of tax due.
Dame Nia Griffith (Llanelli) (Lab)
Torsten Bell
My hon. Friend and I have discussed this issue on a number of occasions, and she has been an important campaigner for pensioners in her constituency who have been affected by it. Although three quarters of schemes provide some degree of pre-1997 indexation, there is a very real impact on members of schemes that do not—indeed, we have discussed that with local pensioners in south Wales. The surplus reforms that this Government are bringing forward will make it easier for some trustees to negotiate for additional indexation. We launched a consultation on this issue on 10 June, and it runs until 2 September. I will take my hon. Friend’s comments as input for that consultation.
Sarah Olney (Richmond Park) (LD)
Sir Stephen Timms
I can assure the hon. Member that my Department is working very closely with the Ministry of Housing, Communities and Local Government to look at what we need to do between us to address the problem of homelessness. I note the point she raises, which is one of the points for discussion.
Tom Rutland (East Worthing and Shoreham) (Lab)
Pat McFadden
The youth hub will be able to help young people by treating them as human beings and bringing together holistic support to get them into employment, including in mental health, housing, and essential and vocational skills. As I said, it is about breaking down the barriers between Departments and seeing youngsters as people. So far, 67% of young people using youth hubs report that the support has met their needs.
Adam Dance (Yeovil) (LD)
Sir Stephen Timms
There is a limit on how far back applications can be backdated, but if the hon. Gentleman would like to drop me a line with the details, I will make sure that we have a good look at the case he raises.
Neil Duncan-Jordan (Poole) (Lab)
The Pensions Minister knows that there is no retirement on a dead planet, so will he commit to writing to the 50 largest UK pension funds to ask them to set out their timetable for divesting from fossil fuels?
Torsten Bell
My hon. Friend is a consistent campaigner on these issues in this place and in our regular meetings, and I always learn something from those conversations. I am not going forward with exactly the suggestion he brings forward, but I agree that there is more we can do, not least to provide clarity for trustees. We are working with industry to develop guidance clarifying that fiduciary duties allow trustees investing in members’ best interests to consider systemic risks, including climate change, and we will consult later this summer.
Joy Morrissey (Beaconsfield) (Con)
The increased PIP costs are expected to add an extra £5 billion to the welfare budget this year. As the TaxPayers’ Alliance has highlighted, the number of households earning over £100,000 and getting PIP has doubled to 200,000 claimants. Will the Minister make an assessment of the potential merits of means-testing PIP to ensure targeted support?
Sir Stephen Timms
Together with disabled people, we are co-producing a review of PIP to ensure that it is fair and fit for the future. The review’s terms of reference reflect the view of successive Governments that PIP should be a non-means-tested cash benefit for people both in and out of work, because anybody can incur additional costs as a result of long-term ill health or disability.
Alex Ballinger (Halesowen) (Lab)
Sadly, Dudley borough was named in Alan Milburn’s “Young people and work” report as the worst performing borough in the country for tracking 16 and 17-year-olds—for over a thousand 16 and 17-year-olds, it was unknown whether they were working, in school or in college, or what they were doing at all. Can the Secretary of State outline what the Department is doing to ensure that we do not lose sight of these young people, as we have done in Dudley, so that we can give them the opportunities they need?
Pat McFadden
My hon. Friend raises a really important point. We cannot allow young people to drop out and to drop out of sight of the system. It is really important, especially for 16 and 17-year-olds, because we want to see participation in education or training up until the age of 18. On my visit to the Netherlands, I saw how it takes this really seriously, with effort after effort to stop young people dropping out. I think we can learn from that and about tracking young people more closely.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
There are now over 1 million young people not in education, employment or training, which is the highest number in more than a decade. When the history books are written on this period of Government, does the Secretary of State agree that the story will be of a lost generation?
Pat McFadden
When the history books are written about this, they will show that this number rose by a quarter of a million in the last three years during which the hon. Member’s party was in power, and the Conservatives did precisely nothing about it. That is what the history books will show. We are responding with a youth guarantee that puts work and opportunity at the heart of welfare reform. I wish they had done it—they did not—but we are.
Tulip Siddiq (Hampstead and Highgate) (Lab)
One of my constituents is a former care leaver who is facing immense health conditions and he can no longer work. Given the lack of family and social support that many care leavers experience, they are uniquely vulnerable to financial insecurity. Can the Minister confirm that the experiences of care leavers are being considered as part of the Timms review?
Sir Stephen Timms
If the care leavers are PIP recipients —I think that is probably the case in the example my hon. Friend has given—we are certainly considering that point. If this issue is one that she thinks we need to reflect on in the review, I would be keen to hear about such experiences.
Caroline Voaden (South Devon) (LD)
Bereavement benefits have not been uprated for 10 years, and they simply do not recognise the lifelong impact of early bereavement on children and surviving parents. Will the Minister look again at uprating bereavement support benefits in line with inflation?
Andrew Western
I appreciate the point the hon. Lady is making. I am not in a position to confirm an uprating from the Dispatch Box, but this will be considered in the usual way as part of the annual uprating process. There is a forthcoming debate in Westminster Hall in response to a petition on the adequacy of bereavement support payments, and I am sure she will participate fully in that debate, if she is able to, to make the case further.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Many young people and children on disability living allowance end up going on to PIP very readily. While it is of course important that people get support, what work is the Secretary of State doing to ensure that those young people are not written off, but given every opportunity to work?
Pat McFadden
My hon. Friend raises a really important point. There should not be an automatic transition. We also have to consider the life chances of people on long-term sickness benefits. So this is worth considering, while always making sure that people in need of disability benefits get the help and support they need to lead as full a life as possible.
Martin Vickers (Brigg and Immingham) (Con)
I recently visited Grimsby jobcentre and met Nick Gregory and Jo Corney, two excellent officials. One piece of information they gave me was about the opening of a youth hub in Scunthorpe, which will serve many parts of my constituency, but many of the young people who go will be from rural areas. What new initiatives are the Government planning to help provide work for young people in rural areas?
The Minister for Employment (Dame Diana Johnson)
I agree with the hon. Gentleman’s comments about the excellent DWP officials in our area. Youth hubs will be in areas where we are working with, say, sports clubs and other organisations. We are also looking at whether we can use buses to get mobile youth hubs out to rural areas in particular, so perhaps that is a conversation we can carry on outside to see what we can do.
Sarah Smith (Hyndburn) (Lab)
Before being elected to this place, I spent many years looking at how we can tackle the NEET crisis. Does the Secretary of State agree that we should be ambitious for our young people and aim to have 0% NEETs?
Pat McFadden
I have discussed this with my hon. Friend. There are great schools I have visited that have a record of NEET zero. They do that by paying attention to employability and work right from year 7, so I believe there is more that can be done to reduce the figure and put work and opportunity at the heart of the reform of the system that we are bringing forward.
Robert Jenrick (Newark) (Reform)
Unemployment is soaring and nearly 1 million young people are not in education or training. It is a terrible waste of human potential and an economic catastrophe. Reform is proposing that we scrap the damaging jobs tax and pay for that with a new levy on migrant labour, which would make it much, much easier to employ British workers. Will the Secretary of State consider this and put British workers first?
Pat McFadden
If the right hon. Gentleman has just noticed that there are 1 million young people not in education, employment or training, one has to ask what was he doing when he was a Minister in the last Government when the figures went up by a quarter of a million and he said nothing at all about it? We have brought forward a youth guarantee that will put work and opportunity at the heart of the reform of the system. That is in stark contrast to his record of complete inaction on this issue when he was in a position to do something about it.
Damien Egan (Bristol North East) (Lab)
Baroness Morris’s inquiry into white working-class children has identified how, from early years to future jobs, white British boys on free school meals are falling well behind. How will Ministers, with all the reviews going on and all the work under way, review and incorporate this inquiry’s findings into their work, particularly in relation to jobs and skills?
Pat McFadden
I welcome my hon. Friend’s question. The report published today is really important, and it shows the lack of opportunity for white working-class children at schools. Our agenda of maximum opportunity for young people and of not letting people drop out and be left behind is really important in getting more opportunity for this group of young people.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Local businesses in Bognor Regis and Littlehampton tell me that they are not recruiting due to the additional cost and uncertainty created by the Employment Rights Act 2025. Has the Secretary of State assessed the impact of Government policy? Employment rights count for little if people cannot get a job in the first place.
Pat McFadden
I encourage local businesses in the hon. Lady’s constituency to look at the new incentives available from tomorrow. They can access a hiring incentive of £3,000 to help them with the cost of taking on a young person, provided that person has been out of work for six months or more. We want to do that in partnership with business. It is an important policy and I look forward to her being a champion of it in her constituency.
John Slinger (Rugby) (Lab)
Last week I attended the Warwickshire employer and stakeholder conference, where we heard from students, alumni and businesses who are providing time to young people so that they can gain the skills they need—it was very inspiring and moving. Does my right hon. Friend agree that more needs to be done to encourage businesses to provide even more hours? Warwickshire College has said that this is a real challenge.
Pat McFadden
I agree with my hon. Friend that we need to work with businesses. I want this to be seen as a national cause, a national endeavour, and a good partnership between business and Government, because it is in the whole country’s interests to make maximum use of the very best resource we have, which is the talents of the British people themselves.
Shockat Adam (Leicester South) (Ind)
Sadly, Leicester South is not immune to the unemployment figures for young people—1,000 young people and counting. My concern is that AI is about to make it even worse, especially as CEOs are citing lower human capital value as justification for replacing workers with AI. What is the Secretary of State’s Department doing to ensure that technological advancements create opportunity, rather than unemployment?
Pat McFadden
The hon. Member raises an important question, which young people themselves are alive to. AI is an all-purpose technology; it will both destroy and create jobs. The leadership task is to ensure that this country is best placed to use the technology and is a good home for investment in it, as well as ensuring that AI adds to the skills of our people.
Leigh Ingham (Stafford) (Lab)
On 17 July, I am hosting the Journey to Work expo in Stafford, bringing together successful major employers and local businesses, with the focused aim of getting young people into work. Last year, we had more than 300 people attend. Can the Minister tell me how the youth guarantee will reach young people in towns such as Stafford, and what support is available to communities already doing that kind of work?
Pat McFadden
I congratulate my hon. Friend on being a fantastic champion for Stafford and her constituents. The youth guarantee will help young people in her constituency through hiring incentives, apprenticeship changes and more work experience placements. I know that she will work with me and the rest of Government to be a champion of opportunities for the young people of Stafford.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
Given that benefit fraud is estimated at around £9 billion, and that the WASPI women are apparently willing to have the cost of their just compensation claim capped at around a third of that figure, can someone from the ministerial team confirm that the Government are willing to change course and negotiate with the WASPI women?
Torsten Bell
The hon. Member will know that a judicial review claim has been filed, and that we cannot comment on live litigation. There are legitimate views on raises in the state pension age, particularly the 2011 acceleration put in place by the coalition Government, but the investigation that is being considered by the Parliamentary and Health Service Ombudsman is not about those increases; it is purely on the narrow point about communication. The Government have made their position clear on that and set it out in the decision document placed in the House of Commons Library.
Amanda Hack (North West Leicestershire) (Lab)
Safeguarding has been a key focus of the Work and Pensions Committee, so I was shocked to hear that my constituent Barbara Skedd received a letter to her executors, incorrectly notifying them of her death. This resulted in Barbara’s benefits being stopped, including the personal independence payment and all her pensions. My team have been working hard to get those reinstated. Can the Secretary of State outline what steps he is taking to ensure that those kinds of errors are minimised, and that the appropriate package of support is put in place so that when errors do occur, they are dealt with quickly?
Andrew Western
I thank my hon. Friend for raising what is an incredibly important case to highlight. I appreciate that it will have been a deeply distressing experience for her constituent and I apologise for that. I can confirm that all payments, thanks in part to my hon. Friend’s ministrations, have now been fully restored and any arrears owed have been issued. Given the seriousness of the investigation, the case remains under active consideration so that we can look into the circumstances that allowed it to arise and ensure that nothing like it happens again.
Prisoner Early Release
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dr Kieran Mullan (Bexhill and Battle) (Con)
(Urgent Question): To ask the Secretary of State for Justice if he will make a statement on the early release of rapists and child groomers.
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
Those who perpetrate heinous crimes must face the full force of the law. Under this Government, convictions for child sex offences are at a record high. At the end of this Parliament, more criminals will be behind bars than ever before. However, this Government inherited a prison system on the brink of collapse—at one point, fewer than 100 places were left in the whole estate.
Without the Sentencing Act 2026, which received Royal Assent in January, the courts would be at risk of grinding to a halt, preventing sex offenders and others from being brought to justice. No space in prisons would mean no trials, no justice for victims and no punishment for offenders. That is the choice: strict licence conditions in the community for those who have already served time in prison under our reforms, or the entire collapse of the system, leaving sex offenders and others acting with impunity.
The previous Government added just 500 prison places to the system in 14 years, in stark contrast to this Government, who are delivering the largest prison expansion since the Victorian era. We have delivered 3,100 additional places in under two years, and are on track to deliver almost 11,000 more by 2031.
Under our reforms, dangerous offenders will continue to be locked up for a long time. More than 18,000 offenders serving life or extended sentences will not be affected by changes to release points and will remain subject to Parole Board decisions. Offenders who are released will face strict licence conditions, closer probation supervision for the most dangerous offenders, exclusion zones, tagging, 24/7 tracking and curfews. This is the biggest expansion of tagging in history, ensuring that dangerous offenders are monitored and the public are protected. If risk in the community becomes unmanageable, those offenders can be recalled to prison.
The previous Government left prisons on the verge of collapse. This Government are safely delivering the reforms needed to end the cycle of capacity crises and protect the British public.
Dr Mullan
Imagine being the victim of a serious crime—as serious as rape or child grooming—and receiving a letter saying that the perpetrator who harmed you is going to be let out of prison early. Appallingly, that is the experience right now for thousands of victims of crime, including the victims of some of the most serious crimes imaginable, thanks to the changes that have been made to our sentencing laws by this Labour Government, helped by the Liberal Democrats.
Before Labour MPs and the Minister tell us again, as he has already done, that this is being done as a result of prison overcrowding, I want every Member of the House to be crystal clear about the actual choice that this Government are making. The previous Labour Government released 80,000 prisoners early; the previous Conservative Government also operated early release programmes, as this Government have—that is not new. However, those schemes excluded serious sexual offenders. Do Labour MPs really want to tell their constituents that they support the early release of rapists and child groomers when there are existing schemes that could be used to avoid that?
I pay tribute to grooming gangs campaigner Fiona Goddard, who, like many others, refused to be silent when she received her letter. Fiona’s abusers were sentenced to between 16 and 20 years in prison in 2019; now, she says that the justice she got in that courtroom is being snatched away from her, and she is right. What did the Labour Government say to the journalist who raised her case? They said that the most serious offences would be excluded. Labour told a victim of rape, sexual assault and grooming that her offenders were not serious enough to be excluded from early release—disgraceful.
We are just a matter of weeks away from these serious offenders coming out, and we still do not know how many are being released and what crimes they have committed, so thank you very much, Mr Speaker, for granting this urgent question. The Government cannot cover up what they are doing to victims any longer; they must tell us today how many criminals—how many rapists and child groomers—are going to be released early, when they are going to be released and exactly what crimes they have committed.
I am confident that when the public understand what is being done in their name, there will be an outcry. Our incoming Prime Minister will have a choice: to act in the interests of rapists and paedophiles or to stand up for victims. What will it be?
Jake Richards
I have listened to the hon. Member speak about this issue a lot, and I must again remind him of his party’s record in government and why the Sentencing Act was an absolute necessity to keep the criminal justice system functioning.
When we came into office, prisons were at bursting point. Only 500 prison places were added in 14 years. Some 10,000 offenders were released by the previous Government, largely in secret. That is the key point, Mr Speaker. The hon. Member has quite rightly and understandably asked how the scheme will be delivered and how victims will be kept informed. Under the Conservatives, it was pure chaos. They lost their grip on the system and did not have a long-term plan for stability in the prison estate, which meant that when they did have to operate early release mechanisms, they gave the victims just a few days’ notice, if any at all. There was complete secrecy and complete chaos. We will not let that happen to the British public again.
There is a choice. No alternative has been offered by the Opposition to the prison crisis that they created. There is a choice: strict—
Mr Speaker
Order. We do not need to worry about what the Opposition’s position is. The question is to the Government—it is about what you are going to do. I also have a constituent who received a letter; I have to say, this is a very serious issue across the country.
Jake Richards
Let me be very clear, Mr Speaker. The Sentencing Act, which received Royal Assent in January, sets out some provisions that will come into effect in September. We are determined to ensure that victims receive due notification in good time, not just because we believe that the Government have a responsibility to let them know, but because we know that victims need to play a role in the licence conditions that we set.
It is vital that victims’ voices are heard. That is why we have already begun communication with victims’ groups and, indeed, with victims who are party to the victim contact scheme. We will go further and ensure that all those who are party to the scheme receive precise information on their case—not just because we want to let them know, but because we want to hear from them to ensure that when we put in the most robust licence conditions in the community, victims’ voices are at the heart of the decisions we make. That is absolutely right, and that is not what happened under the Conservative Government.
Jess Phillips (Birmingham Yardley) (Lab)
I recognise that very few rapists went to prison under the previous Administration and that the increase in rapists, especially child rapists, going to prison under this Government has been huge. I congratulate the Government on that. It is, however, my opinion that there should be more exemptions within the release scheme, and we should all be working together to see if child rapists can be included in that, should the numbers allow it, because we also cannot let the prison system end.
I would like to ask a really specific question about the risk assessments that will be done on these cases before release. I have to say that my experience of risk assessment in these cases is not great. It does not take account of the victim or public safety more broadly. Can we have an assurance that there has been a change to the risk assessments regime from how it was under the previous Administration, so that any risk assessment done on the release of any prisoner will ensure that we are actually safe in public?
Jake Richards
Let me first pay tribute to my hon. Friend for the work she did both in government and in opposition on these issues. She has raised with me outside the Chamber the issue of pre-sentencing reports, in particular in relation to domestic abuse. As she knows, I have spoken with Lord Timpson and we will come back to her on those specific measures.
My hon. Friend is right to raise the issue of community safety. We have invested £700 million into the probation system—the biggest investment in probation for a generation —and recruited more probation officers than ever before. For the first time in several decades, the caseload of the average probation officer is coming down, in contrast to the record highs reached under the Conservatives.
Jess Brown-Fuller (Chichester) (LD)
I pay tribute to the victims and survivors of some of the most appalling, heinous crimes for their bravery in speaking out about the fear they have felt after receiving letters from the Ministry of Justice informing them that their perpetrators might be let out early. I understand that the purpose of the letters is to ensure that victims have the opportunity to engage with licence conditions, but what other support will be available to those victims who understandably feel retraumatised and let down by the justice system?
In the other place, the Prisons Minister made a commitment that those released early would be subject to intensive supervision, supported by a significant programme of electronic tagging. The Liberal Democrats were clear that the Government could bring forward those measures only if the Probation Service was adequately resourced to achieve this in the community. The Prisons Minister agreed to an annual review of the state of probation and its ability to cope with the changes. When can we expect the first review?
Finally, the Government inherited a prison system that was running so hot that they were at risk of losing the ability to lock up any offender. Can the Minister guarantee from the Dispatch Box that no victim will ever again be given just two days’ notice, or in some cases no notice, of their perpetrator being released, as they have suffered in recent years?
Jake Richards
I thank the hon. Lady for her question. I will deal with her three points. As I said in my earlier response, we are determined to ensure that victims’ voices are heard. We have invested £15 million in victim support services, and victim liaison officers will clearly be involved in many of those cases. The Victims Minister, my hon. Friend the Member for Derby North (Catherine Atkinson), is beside me on the Front Bench and will have heard her very important point.
The hon. Lady is right that public safety can be ensured only by investing in probation. That is why we have made the biggest investment in a generation—£700 million—and that investment is now beginning to bear results, with caseloads coming down significantly for the first time in a long time.
The hon. Lady is absolutely right that we need to give due notice to victims of what is happening with their perpetrators so that they are informed and are involved in the process. Under the last Government that did not happen, but it will happen now. I gently remind Members that some victims have opted out of the contact service. We cannot say today that all victims will be contacted, but all those who are involved with the contact service will receive that notice.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
We all accept that the prison capacity crisis requires difficult decisions to be made, but when Parliament passed the Sentencing Act, Ministers assured the House that the most serious and heinous offenders and those who commit the gravest crimes will continue to face the toughest sentences. Does the Minister not accept that most people would regard the actions of members of grooming gangs who have sexually abused, raped and exploited children—and child sex offenders more generally—as falling within the ordinary meaning of the most serious and heinous offences? If so, why are those not excluded from the release scheme?
Can I say, as a local Member of Parliament, that I am disgusted that according to local news reports—the Government have not informed local MPs—Shabir Ahmed, the leader of the Rochdale grooming gang, who was an Oldham resident, is due to be released this week? He was convicted of crimes in relation to Rochdale victims, but we all know that for every victim who went through the court process other victims did not, so the idea that Oldham is somehow not affected by the evil of this person is ridiculous. May I urge the Minister please to look at that case in particular as well as the rules that are allowing this to be normalised? It cannot be allowed to be normalised.
Jake Richards
Let me thank my hon. Friend for his question. I will of course not just look into that case but meet him urgently to discuss it. I gently say that the provisions in the Sentencing Act, which was passed in January, have not come into effect yet; they begin in September. I do not know the details of that case—I will look into them urgently and meet him—but on the face of it the case falls outside the new legislation that we have passed. I will certainly make sure to meet him urgently.
Robbie Moore (Keighley and Ilkley) (Con)
I welcome the news that Keighley and Bradford is finally getting an independent grooming gangs inquiry. It has been a long fight, but for survivors like Fiona Goddard, who I spoke to again last night, the news has been bittersweet. The fact that Fiona and many other victims and survivors of the most horrific sexual violence have been written to by the Government to inform them that the very rapists and paedophiles convicted of abusing them could be released as early as September is an absolute disgrace. Fiona’s life has been turned upside down, and she and many others live in fear right now, and they also fear being retraumatised by a system that is diminishing the horrors that happened to them. I ask the Minister directly: will he guarantee now from the Dispatch Box that Fiona’s perpetrators will not be released early?
Jake Richards
Let me thank the hon. Member not just for his question but for the work he has done in good faith on this issue for a number of years. I gently say to him, as I have said before—this is difficult, no doubt—that the Sentencing Act is only on the statute book because of the failure of the Conservative Government over 14 years to build appropriate prison places.
Before coming to this place, I spent a large part of the previous decade working with victims of grooming gangs. I take this issue incredibly seriously, as I know the hon. Member does, and I respect him for the work he has done on it. But in 2022 Professor Jay’s report offered a series of recommendations on this very important issue for the hon. Gentleman’s community, my community and those across the country, and he will know, as he sits on the Home Affairs Committee, that when she gave evidence to that Committee at the beginning of 2025, she spoke of how she was ignored month after month by successive Conservative Home Secretaries. So we will not be taking lessons on this issue from the Conservative party.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for coming to the Dispatch Box and answering questions on a particularly important issue. I join my hon. Friend the Member for Birmingham Yardley (Jess Phillips) in being concerned not only about rapists being released early, but about the low conviction rates in rape cases. What are the Government doing to deal with that? What specifically can the Minister do to assure me that if any prisoners are released early—for whatever crime they have committed—they are being effectively monitored so that residents in Harlow feel safe, particularly given the mess and the two-tier probation service we were left with by the Conservative party?
May I also ask the Minister about tagging? We have all heard stories about tags not being fit for purpose, with people able to take them off. What can we do to ensure that if people are tagged on release, those tags cannot be taken off?
Jake Richards
I am grateful to my hon. Friend. As I have said, under this Government convictions for child sexual offences are at a record high. There is more work to be done in this area, and I know that my hon. Friend the victims Minister and others are working to ensure that we have even more robust investigation and punishment of those who commit these serious offences. As we set out in the Sentencing Act, we have also implemented the most robust community package ever, including exclusion zones, tagging, 24/7 tracking, curfews and the biggest expansion of tagging in history, to ensure that dangerous offenders are monitored and the public protected. We must ensure that the tagging system is robust, and we will do so.
Katie Lam (Weald of Kent) (Con)
In June, 20 grooming gang perpetrators were jailed for offences in West Yorkshire, which included the rape and abuse of three girls of whom the youngest was aged just 12. Abbas Kaji was sentenced to just seven years for rape, and Mohammed Ishtiaq Hussain to just eight. All too soon, these vile men will be back on the streets of the very communities that they terrorised, and the idea that the Government could cut their sentences to be even shorter is terrifying. This is not about the past but about the present and the future, so can the Minister please assure the House that everybody involved in grooming and rape gang offences will, at the very least, serve the entirety of their already too-short sentences?
Jake Richards
Once again, I am happy to meet the hon. Lady or indeed the appropriate Member of Parliament to look at the details of that case. We need to make sure that we have enough prison places to ensure that those who commit these serious offences serve time at all, and that is what the Sentencing Act, complemented by the biggest prison building programme since the Victorian era, will do.
Luke Taylor (Sutton and Cheam) (LD)
I was contacted by a constituent who had received one of these letters earlier this week. The offender in question was a vile monster responsible for decades of sexual abuse, and he was sentenced to 30 years for 31 counts of sexual assault, rape and processing indecent images. He has served less than five years. Can the Minister explain how these are not the most heinous crimes, and how an offender like this is still eligible for this scheme? Can he also reassure residents that they will be written to as soon as possible to set their minds at rest, if their abusers are indeed going to be part of this scheme?
Jake Richards
I am very happy to meet the hon. Member—and indeed his constituent, if helpful—to discuss those cases. As I have set out before, 18,000 offenders serving life or extended sentences will not be affected by the changes at all, but I am happy to look into the particulars of that case.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
The Minister has heard quite clearly from Members on both sides of the House the real concern about what was said at the Dispatch Box about those who had committed the most serious and heinous crimes not actually being released under this scheme. That is where the biggest dispute is in relation to this. Could the Minister please pledge to the House that he will go back to the Department and review this, and ensure that all those who have committed rape or been convicted of child grooming and who look as if they are getting early release are excluded from this scheme?
Jake Richards
We will always do what we need to do to ensure that we have a functioning criminal justice system and a prison system that can keep the public safe, and that is what we will continue to do.
Richard Tice (Boston and Skegness) (Reform)
The British people will be absolutely disgusted and revolted that these child grooming gang perpetrators and rapists might be released early. Reform’s position is clear: they should receive mandatory whole of life sentences. If the excuse from this Government is that there is a shortage of places, why do they not get on and deport the 10,000 foreign nationals clogging up our jails?
Jake Richards
Deportation of foreign national offenders is at record highs under this Government and we will continue to work to ensure that we deport those foreign national offenders who should not be here. I think the justice spokesperson for Reform is the hon. Member for Runcorn and Helsby (Sarah Pochin). She recently said that 1.2 million people should be put in prison every year. There is no serious plan from Reform that keeps our country safe.
Esther McVey (Tatton) (Con)
Last week, the Government announced the first areas to be investigated as part of the rape gang inquiry, yet under their new Sentencing Act, rapists and child groomers will be released early from prison. The Minister must see that putting these criminals on the streets not only makes an absolute mockery of Labour’s rape gang inquiry but goes to prove that Labour was never serious about having one or locking up those perpetrators.
Jake Richards
As I have said, there was an inquiry into these issues, which was begun by the last Conservative Government. The chair of that inquiry, Professor Alexis Jay, said that their response was
“inconsequential, insubstantial, committed to nothing.”
Victims waited years for action and got nothing. There were briefings that it was “hysterical and half baked”, and highly emotional, and the former Prime Minister Boris Johnson said that money spent on child sex abuse inquiries was being “spaffed up the wall”. I will not take any lessons from the right hon. Lady or the Conservative party on this issue.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr, Lefarydd. Richard Tung of Penisa’rwaun, Caernarfon, is in prison after being found guilty of historical rape and sexual offences against a child in Nottingham. He was reported to Nottinghamshire police in 2022, but his first police interview was not until June 2023. Concerns have been raised with me that Tung remained at liberty and free to work in a restaurant in my constituency until he was sentenced to 12 years in prison on 17 April this year—four years later. Will the Minister advise me on how to find out why Tung was not remanded to custody prior to the court case and, given that this is a cross-border police force issue, what child protection and public safety measures should be put in place between Nottinghamshire police and North Wales police?
Jake Richards
As the right hon. Member knows, questions as to whether a defendant should be remanded are a matter for the judiciary. I am happy to look into the particulars of this cross-border issue and the matter of local protective agencies working together to keep the public safe, and will get back to her.
Sir Julian Lewis (New Forest East) (Con)
One reason that the present Prime Minister has lost the trust of the public is his refusal, time and again, to give straight answers to straight questions. My Front-Bench colleague, my hon. Friend the Member for Bexhill and Battle (Dr Mullan), asked a straight question: how many rapists and how many child abusers are scheduled for early release? Either the Minister is not answering because he does not know the answers, in which case he should tell us that, or he does know the answers but is refusing to give them. Which is it?
Jake Richards
When the Sentencing Act went through Parliament, we had a number of debates, and an impact assessment was published. The numbers are contained in there.
Caroline Voaden (South Devon) (LD)
Any victim of rape or child sexual abuse will know that securing a conviction is almost impossible. I am absolutely astonished that those incarcerated for raping children are not excluded from this early release scheme. However, given that the Government are including them, and given the absolute mess made of the Probation Service by the previous Conservative Government’s reforms, will the Minister guarantee from the Dispatch Box that the Probation Service is now adequately staffed, funded and equipped to closely monitor these awful perpetrators, who are being let out of prison way too early?
Jake Richards
Yes, Lord Timpson, the Minister in the other place who is responsible for the Probation Service, has undertaken huge reforms to how the Probation Service operates, which are backed up by investment. I am confident that we have a robust probation system that is ready for the challenge ahead.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
During the passage of the Sentencing Act, we were told that the perpetrators of the “most serious, heinous crimes” would not be included in these measures, so can the Minister explain why the Government do not think that the rape of children is one of the most serious and heinous crimes, and how many individuals who committed it will be coming out early?
Jake Richards
As I have already said, more than 18,000 offenders serving life and extended sentences, including rapists and those who have committed the most heinous offences, are not affected by the Sentencing Act provisions at all. I need to be abundantly clear that we will never let happen what we inherited from the Conservative Government, which is that there were no prison places. We were running out of prison places, which meant that the whole criminal justice system was on the verge of collapse. Never again.
Adam Dance (Yeovil) (LD)
My constituent was recently told that the person who was found guilty of grooming his child on social media could be released as part of the early release scheme. Does the Minister recognise the distress that that sort of news causes victims? Will he also tell the Yeovil constituency what progress the Government have made on increasing prison places and strengthening the Probation Service in the south-west? Victims do not just want to feel heard; they want to feel safe.
Jake Richards
The hon. Member is absolutely right to raise the concern among constituents who have receive these letters, but the purpose of the letters and the engagement is to ensure that we work with victims so they are informed of the situation and their voice is heard. That did not happen under the previous Government, who had to rush out communication because they had completely lost control of the system.
Rebecca Paul (Reigate) (Con)
I would expect the Minister to know the numbers, and this question has been asked many times, so I am going to give him another attempt: how many rapists and sexual offenders will be released early under the Sentencing Act?
Jake Richards
As I said, the impact assessment published during the Sentencing Act’s passage through Parliament set out very clearly that 7,500 prison places would be saved as a result of the Act.
Ben Obese-Jecty (Huntingdon) (Con)
The Minister talks a good game about prison numbers, but he will know very well from the many exchanges we have had on the issue that there are a lot of prison places that this Government have yet to deliver. Prison contractor ISG went bust in September 2024, and because the Government sat idle for 18 months without appointing new contractors, 3,500 prison places were not delivered—places that would have meant that the Government did not need to release prisoners early now. I have a male sex offenders prison in my constituency. I appreciate that he will not have the numbers to hand, but can he write to let me know how many rapists and child sexual abusers will be released from that prison?
Jake Richards
I seem to spend half my life writing to the hon. Member, who asks a lot of questions on this issue. Let us be clear about the facts here: under the Conservative Government, only 500 places were built in 14 years. In two years, we have built 3,500 net places and we will have 14,000 by 2031. The hon. Member makes the point, “Well, some of those were apparently planned for or envisaged by the last Conservative Government.” Unless I am hallucinating, I am the one who is opening these prisons under a Labour Government.
John Cooper (Dumfries and Galloway) (Con)
Soft-touch fever is spreading across the land because in Scotland, the SNP Scottish Executive are about to start releasing rapists as much as 2.5 years early. Do the Ministers on the Front Bench not realise that they are so out of touch with the public on this issue that they risk the very fundamentals of the justice system?
Jake Richards
The hon. Member is right that faith in the justice system is absolutely crucial. That is why the situation we inherited—the criminal justice system teetering on the brink of collapse, meaning no trials and making arrests impossible—was completely unacceptable, and we will never let that happen again.
Jim Allister (North Antrim) (TUV)
Surely the Minister must agree that sustaining and instilling confidence in victims is essential to securing and sustaining prosecutions, and therefore any indication that there could be early release of such a person is bound to undermine a victim’s confidence. Last week in Northern Ireland, through the bravery of two young women, we saw Jeffrey Donaldson convicted as a child rapist—a man who passed himself off in this House and elsewhere as a statesman, demonstrating that no one, thankfully, is above the law. But if we get into the business of early release for child rapists, how do we ever hope to sustain victims coming forward?
Jake Richards
Let me put on the record my gratitude for the bravery of those victims that the hon. and learned Gentleman identified for what they undertook to ensure that there was justice. What undermines confidence in the criminal justice system is a system that completely unravels. Without the appropriate prison places and without getting down the Crown Court backlog, which my hon. and learned Friend the Courts Minister is busy doing, we undermine faith in the system completely. We cannot let that happen. That will mean difficult decisions, but we will not shy away from them.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers to the questions. My constituents are horrified by the early release of rapists and child groomers. If a criminal is sentenced to 15 years for destroying a child’s life or committing a horrific rape, they should serve every single day—indeed, every single hour—of that sentence behind bars. Opening the prison gates early does not fix the justice system; it actively endangers women and children across the United Kingdom of Great Britain and Northern Ireland. Will the Minister urgently review these catastrophic legal changes and guarantee that no convicted rapist or child groomer will be given a get-out-of-jail card by this Minister’s Department and this Government?
Jake Richards
We will not shy away from the difficult decisions needed to save the criminal justice system to ensure that we have prison places to put criminals behind bars. By the end of this Parliament, more criminals will be behind bars than ever before. This is not a matter of being soft on crime; it is a matter of ensuring that we can put criminals away in future.
Dr Kieran Mullan (Bexhill and Battle) (Con)
On a point of order, Mr Speaker. I genuinely seek your guidance and support. I have submitted multiple written questions and freedom of information requests. We have a named day question on this matter that was due to be answered on Friday, which the Government have refused to answer as they should. The Minister said that the information we are after is in the impact assessment, but that is not true. There is not the information on the number of offenders in terms of rapists and child groomers being released. How do we and the public get answers to these very basic, incredibly important questions?
Mr Speaker
I am sure that Ministers on the Front Bench have heard that an outstanding question should have been answered. I am quite disappointed if that is the case—it should be answered. Members of Parliament put questions down to Ministers, and Ministers are answerable to this House—not when they feel like it or when they get around to it. That is totally unacceptable. I hope that they will go back and check the records to ensure that letters and questions have been answered. But named day questions—it is in the title—should be answered on the named day.
The point of order has been heard, and I am sure this issue can be rectified today. If it is not, there are many avenues, including coming back to this House. I believe there are questions to be answered, and all MPs should be told not who will be released, but how many people may be released within their constituencies. I say to the Minister that this is bad for all MPs, and MPs rightly need to represent their constituents. The sooner we help them, the sooner this House will be in a better place. I will leave it at that for now.
Asylum Accommodation
(1 day, 4 hours ago)
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The Minister for Border Security and Asylum (Alex Norris)
With permission, Mr Speaker, I will make a statement on asylum accommodation.
It is important to remind the House of the wider context, and in particular the events that have brought us here today. In the years before the general election, the number of people arriving in the United Kingdom illegally, particularly via small boats across the channel, rocketed. The dismal consequences of that abject failure to secure our country’s borders are grimly familiar to us all: individuals risking their lives to come here via dangerous means, criminal gangs growing rich from the proceeds of organising those journeys, community cohesion placed under severe strain, and public trust in the state’s ability to perform one of its most basic functions shredded.
Over the last two years this Government have taken concerted action to turn the situation around. We have begun by implementing major asylum reforms to reduce the incentives that draw people to this country. We have cut overall asylum costs by nearly £1 billion, while asylum decision making, which effectively ground to a halt under the previous Government, is at a 24-year high. More foreign criminals and illegal migrants are being removed than at any time in many years, and in partnership with our French counterparts we have stopped more than 44,000 crossing attempts. We have also put in place a groundbreaking scheme that means that small boat arrivals can, for the first time, be returned to France.
All that work is important and it is making a difference. However, perhaps the most totemic and tangible manifestation of the failing system that we inherited is the continued use of hotels to house asylum seekers. That issue has, quite understandably, been a source of widespread concern and anger. The Government recognise those frustrations, and we share them. Hotels ought to be local assets serving their communities, not propping up the asylum accommodation system. When hotels are used for that purpose, there are significant implications for local services, community cohesion and public safety. Clearly, that unsuitable, unsustainable and costly practice must be stopped, which is why this Government made a commitment to end the use of asylum hotels in this Parliament. We are well on track to deliver on that aim.
In April we announced that 11 asylum hotels had been closed and given back to local communities. We were clear at that point that more would follow in the subsequent weeks, and so that has proved, with a further 20 now having closed. That means that just under 170 asylum hotels remain in use, which is a reduction of more than half compared with the peak of around 400 under the previous Government. The number accommodated in hotels has also seen a significant fall from 56,000 in 2023, to around 21,000 now. Progress is being made but we must go further, and that means scaling up our use of larger, more basic facilities.
There are currently two such sites in operation: Wethersfield in Essex and Crowborough in East Sussex. Those sites began housing asylum seekers in 2023 and January this year respectively. Across both sites there is, at present, capacity to accommodate up to 1,340 individuals, with additional contingency capacity at Wethersfield of 400. In the meantime, work has continued to identify further viable locations.
Today I can confirm to the House that three new ex-military sites are now under consideration: Barnham in Suffolk, Bicester in Oxfordshire and Linton-on-Ouse in North Yorkshire. Together, those sites could eventually provide accommodation for around 3,750 asylum seekers, subject to feasibility assessments, planning permission and the necessary approvals. Those caveats are important, because while our commitment to the promise we have made on hotels is absolute, we must ensure that we get this right and carry out all relevant due diligence, so that if we decide to proceed with an alternative site, our plans are as strong as they can possibly be. Let me assure hon. Members that we have learned from the previous Government’s forays into this arena. No final decision will be taken on any site until, in each case, all necessary arrangements, assessments and approvals are in place and have been properly considered.
Work on those three potential sites is ongoing, in conjunction with local and national partners. To further support the exit from hotels, we are exploring the possibility of extending the use of the site at Crowborough, which is currently due to end next January. At Wethersfield, we are exploring both an extension and the best use of capacity. Finally, following detailed assessments, the Government have decided not to proceed with Cameron barracks in Scotland as a potential site for asylum accommodation, and it will be returned to the Ministry of Defence.
Before I finish, I assure the House that we understand our responsibilities in this space. With any decision on asylum accommodation, public safety is and will continue to be a critical consideration. We will always take every possible step to minimise the impact on communities. To be clear, wherever asylum seekers are located, they should be in no doubt that if they break our laws, they will be caught, face justice and, like the thousands of foreign offenders already removed under this Government, made to leave our country.
To conclude, it was always going to take time to fix the mess we inherited, but as the measures I have set out today clearly demonstrate, we are acting decisively to achieve the change the country voted for at the general election by closing asylum hotels for good, by securing our borders and by restoring order and control to the immigration system. That is what the public rightly expect and that is what the Government are working relentlessly to deliver. I commend this statement to the House.
Katie Lam (Weald of Kent) (Con)
I thank the Minister for advance sight of his statement, which confirms what we have suspected since last week: this Government are planning to put more illegal migrants into sites across the country.
Some of those sites are due to host illegal migrants until 2030, yet the Government did not think that it was worth alerting the hon. Members who represent those communities and live nearby ahead of the announcement in the press. Rather than subjecting the plans to proper scrutiny here in Parliament, the Government tried to sneak the news out quietly before the weekend, without discussion here in this place by those people’s democratically elected representatives. That is exactly the same playbook that the Government have tried to use in places like Inverness where, thanks to the work of the Conservative group on the Highland council, the Home Office’s plans to house illegal migrants at Cameron barracks were blocked.
We have seen in far too many cases the risk that illegal migrants, most of them young men, pose to the public, particularly to women and children. If the Government are planning to force communities to live alongside people who have shown complete contempt for our laws and norms by the very act of coming here illegally, the least that they can do is to allow those plans to be subject to proper scrutiny.
Now that we finally have an opportunity to scrutinise the plans, we can perhaps see why the Government were so keen to hide them. For all the talk of smashing the gangs, they reveal that this Government do not have any faith in their own ability to fix the problem. If they are so sure that they are ending illegal channel crossings, why are the Government making plans to host illegal migrants in this country until 2030? What does that tell us about their confidence in their own approach?
The truth is that this Government have no intention of fixing the problem: they care only about managing people’s perceptions of it. While they talk up the reduction in illegal migrants living in hotels, they conveniently leave out the fact that thousands more migrants are being housed in so-called dispersal accommodation: homes in the middle of our towns and cities where illegal migrants pose an even greater risk to the public.
Since the last election, 75,000 people have crossed the channel. In the past few weeks alone, 3,000 have made the crossing. For all the Government’s talk of removals, nearly all of them—some 93%—are being allowed to stay. The Minister boasts about a reduction in outstanding decisions, but they have achieved that reduction by granting asylum to thousands upon thousands of illegal migrants.
The Minister said in his statement that to stop the use of asylum hotels for good
“we must go further, and that means scaling up our use of larger, more basic facilities.”
He is right that the Government must go further to stop the use of asylum hotels for good, but he is utterly wrong that the problem is solved by instead spending huge resources to create other places to live for those who arrive here illegally.
As Conversative Members have made clear time and again, the only real solution to the crisis at our border is to remove illegal migrants as soon as they arrive. People must know that if they try to break our laws, they cannot stay. For it to be possible to remove people as soon as they arrive, we must leave the jurisdiction of the European Court of Human Rights that prevents us from doing so, but the Government refuse to recognise that. They are in hock to activist lawyers in this country and unaccountable judges in Strasbourg, and keeping those people happy takes precedence over keeping the British people safe and delivering on their democratic will.
The plans before us are another sorry example of that. More illegal migrants will enter the endless cycle of appeals and legal challenges, allowing them to stay here for years at the taxpayer’s expense. More people will be put at risk because of these plans and because of the Government’s unwillingness truly to solve this problem for good.
Alex Norris
We see the contrast there clearly. While the Government have a serious plan on how to accommodate a significant number of people and change that reality, the hon. Lady offers just “Hail Marys” and long shots. Her colleagues had 14 years, but sat through them and did not make any of those decisions. It is hard to believe.
The hon. Lady started by asking why, and that is a very important point, because these sites are part of our theory of change. At the moment, the traffickers say, “Come to the UK. Live in a hotel. You will be able to work illegally, dead easily.” We have to change that reality if we want to reduce pull factors. This plan does so; it says, “You will not live in a hotel. You may well live on a military site.” That is about reducing numbers and reducing the impact on the British taxpayer, and that is the right thing to do.
The hon. Lady mentioned dispersal accommodation. The previous statistics release in May shows a 32% reduction in the number of people in hotels, but there was a reduction of less than 1% in the number of people in dispersal accommodation, so the reality is not quite as she put it. On decision making, she knows that the grant rate has not changed significantly at all, so I simply cannot accept her case that by making more decisions we are letting more people through.
The reality is that we have a choice between another hopeful attempt at culture war by an Opposition who have no ideas, and a serious plan to reduce numbers. Let us face it: asylum applications are three times what they would have been 10 years ago. From us, it is serious action; from the Opposition, it is empty calories.
Terry Jermy (South West Norfolk) (Lab)
This is deeply concerning news for my constituency. The boundary fence of RAF Barnham adjoins the market town of Thetford, which I represent; the town centre is a short walk away from the base.
I strongly support the right of people to claim asylum, and I am proud that we are able to offer refuge to those fleeing war and persecution, including those who have supported our armed forces abroad, but that is not without risk and impacts on community relations. In the absence of openness and transparency and a proper plan, malign forces will fill the void, stoking greater fear and division. Whether it is a Conservative Government or this Government, these announcements should be sensitively handled and thoroughly planned, but that has not happened in this case, where there has been secrecy and confusion. It is my community who pay the price for that failure.
While such news will never be welcomed by a community, the worst could be mitigated by a stronger commitment to transparency, engagement and reassurance. Alongside this announcement, where is the engagement plan? Where is the communication strategy? Where is the commitment to addressing community cohesion concerns in these areas?
Madam Deputy Speaker (Ms Nusrat Ghani)
I will be paying close attention to these answers.
Alex Norris
I am grateful to my hon. Friend for those important questions. Let me start where he started; everything is local somewhere, and the impact of our proposals is significant on those local communities. I recognise that, and that is important, but we are developing plans to mitigate the impact. There is a reason that we do not wait until the very end and announce the decision just as it is taken. At some point, we vet sites; we have vetted all sorts of sites around the country ahead of being able to bring these ones forward.
There comes a point, however, when we need to get onsite and start peeling back the layers and engaging with the local authority, police and health services, and that point is now. My hon. Friend is right; there needs to be sensitive handling of plans. I appreciate that the burden is on me and the Government to demonstrate that we will do so. I believe that we can do this while mitigating the impacts on his community and surrounding communities, but, as I say, it is up to us to demonstrate that.
Mr Will Forster (Woking) (LD)
I regret that the Labour Government still have not set out a credible plan to restore fairness and control in our immigration and asylum system. This announcement is another sideways step that fails to address the root cause of the problem.
Simply moving asylum seekers from one form of expensive and unsuitable accommodation to another is not good enough, particularly when the costs are going up. At the Crowborough MOD site, which is currently in operation, accommodation costs around £160 per asylum seeker per night. That is more than the cost of the average asylum hotel place. The Government are choosing a more expensive option, adding an estimated £60,000 every night to the bill faced by taxpayers. How does the Minister justify that? Will he confirm whether this decision is driven by a desire to be seen to be closing asylum hotels, rather than securing the best value for taxpayers? The Government should instead be focusing on reducing the asylum backlog and ending the limbo that many asylum seekers are in. The overall asylum caseload is now higher than when Labour took office, while the appeals backlog has reached record levels. Will the Minister set out what he and his Department are doing to reduce that backlog and ensure that the Home Office gets more decisions right first time, avoiding unnecessary appeals?
Finally, if we are to deliver the controlled and compassionate immigration and asylum system that my constituents in Woking and the whole of the British public want, it is essential that we tackle dangerous channel crossings. Will the Minister work with our European partners to establish a genuinely effective returns agreement that ensures that we can have controlled, legal routes and that those who arrive in small boats can be returned swiftly?
Alex Norris
I am grateful to the hon. Gentleman for his questions. He has heard the plan from me and my right hon. Friend the Home Secretary before: co-operation abroad, quicker and better decision making, and more returns. All those things are going much better than they did under our predecessors. It is also about tackling illegal working, but crucially, it is about reducing pull factors too. I sometimes feel that Opposition colleagues have given up on the idea that the numbers might go down. Actually, the numbers are significantly elevated from what we are used to, and with sensible attempts to tackle pull factors—including tackling illegal working, but also this proposal—we can reduce them.
The hon. Gentleman talked about costs. He cited the per night figure for Crowborough; that figure will of course fall if we stay at Crowborough longer, because some of that is up-front capital investment. Pro-rated over a longer period of time, the nightly rate will come down, but again I say gently that we are doing this because we want less of this activity. We are not merely asking, “We expect to house the same number of people, so where is the cheapest place to put them?” but, “What is the best use of our estate to promote a number of goals, one of which is reducing those numbers?” That is how we get costs down. I might add that we speak with a degree of credibility, given that we have already taken £1 billion out of taxpayer spending in this area. That is progress.
The hon. Gentleman mentioned appeals. He knows very well why the appeals backlog has grown—we have had a huge backlog of initial decisions, because the previous Government stopped making them. Of course, that cohort is now in the appeals system. As he will have heard in the King’s Speech, important reforms to appeals are coming, and I hope the hon. Gentleman will support us in that venture.
On his point about co-operation abroad, that is of course crucial. We engage all the time with our European and EU neighbours, working together on a shared problem. The fruits of that can be seen in our much-enhanced deal with France. That work is crucial, and it will continue to grow.
Madam Deputy Speaker (Ms Nusrat Ghani)
As the Minister has repeatedly mentioned Crowborough, which is in my constituency, I assume he will be meeting me this week to clarify the position for my constituents.
Dr Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
I thank my hon. Friend the Member for South West Norfolk (Terry Jermy) for mentioning RAF Barnham, which is in my constituency—it is adjacent to the border of Thetford, and within easy walking distance of it. It was formerly a base that housed mustard gas during the first world war, and in the cold war it was the home of the RAF’s strategic nuclear weapons, so it has an interesting history.
The people of Suffolk are a kind and compassionate people, and they understand the need to house those who are fleeing war and persecution. However, I saw a protest at RAF Barnham this weekend, so how will the views of local people be taken into account, and what exactly is the role of the local planning authority?
Alex Norris
I thank my hon. Friend for his questions. To answer your question from the Chair, Madam Deputy Speaker, I will of course be very happy to meet you, as I always am—indeed, I am often summoned to do so. You are in the inimical position of not being able to clearly state on the record just how opposed to Crowborough you are, but I am in no doubt about that, given that you tell me basically every single day via the telephone or face to face, or through whatever tortures in this Chamber you can imagine. I may have more of that to come.
The points made by my hon. Friend are very important. I appreciate that local communities will want to do one of two things, and I encourage them to do both of them at the same time. I understand that many if not most people in my hon. Friend’s community, like others, will oppose the Government doing this, which is a perfectly noble endeavour in a democracy. There are also questions about how this can be done best—how do we limit the impact, be it on health services, the police or local amenities? I believe we can pass that test clearly, and I hope communities will also engage with those questions.
As for planning, my hon. Friend knows that we have previously used a number of different planning devices for different sites. We have not made final determinations for Barnham or for the other sites—we will be doing that over the course of this work.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
Linton-on-Ouse, in the heart of my constituency, is a small rural community and is very much isolated. Four years ago, this plan was rejected on technical grounds. Three times the local population would be put into the area, with no means to secure people within that site. They could roam into the village, which has no amenities and does not have a village shop. The area would be overwhelmed.
I wanted to question the Minister on Thursday, but it was not possible. I have had many constituents ask some of these questions over the weekend, and I would like the Minister to answer them now. Northern Powergrid previously indicated that the system would not be able to cope and that the electrical upgrade needed for supply was not possible. Does that mean that industrial generators will have to be brought in, creating noise pollution in this quiet rural village? Yorkshire Water spent millions of pounds upgrading the sewage works to ensure that it correctly met effluent discharge requirements, based on a threefold increase in the area’s population under the proposal, so will there have to be effluent trucks, or would the water drains be polluted? On that note, people who closed down the Linton-on-Ouse base tell me that the drains were concreted in at the time.
The Minister has said that some of these sites have already been vetted, but I find that hard to believe, when the issues on the base have not changed. The highway network has bridges limited to seven and a half tonnes, so site traffic will have to go through limited road routes. On healthcare, the local NHS says that it has no spare capacity. What is perhaps more worrying is that I have been told on good authority that local companies have been asked to tender for the work that would be needed at this site. I ask the Minister directly: have local companies been contacted to tender for work? If they have, I wonder whether it is a feasibility study. On that note, who will make the planning decisions? Will that be for North Yorkshire council, or will it be overridden?
To call it a plan is too grand. The Government do not know what they are doing. They have not thought it through, and they have not had the decency to consult local people about it. In the words of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) in 2022, this
“tells you just about everything you need to know about the state of chaos they are in.”
This is happening under his watch, so what has changed? This is still an inappropriate site, given those technical issues.
Alex Norris
I am grateful for that series of questions. I gently say that there is a slight unfairness in the right hon. Gentleman’s saying that he and his community want a greater say in the details, while at the same time saying that we do not have a plan. The whole point is that rather than inviting providers or contractors to tender for services and to be around on sites and our saying, “Nothing to see here”, we are being honest that we are looking seriously at this site. The final decision is not made yet, but we are looking. That is a better way to do it, but I appreciate that there may be differences of view.
The right hon. Gentleman talks about roaming. That is in no one’s interest, and what we have managed to do at Wethersfield and Crowborough is to ensure that people do not just come off-site and roam. They are non-detained, as he said. Nevertheless, by the provision of activities and of transport, we can ensure the lightest local impact possible. That would be our commitment for these sites, too.
The right hon. Gentleman mentions electricity and sewage. Those are important parts of the process that we are in now. We are well aware of the history, which transcends this Government—it goes back to the previous Government—but we would not be taking forward this site if we did not think we had viable answers. Nevertheless, it is only when we get on site and start turning over the rocks, as it were, that we can get to a final point on viability. That is the process we are doing here.
It is not our intention that the site would impact on the right hon. Gentleman’s local healthcare services, outside emergency services perhaps. What we have been able to do elsewhere is to have ordinary healthcare provided for on-site to ensure that there is not an impact on the local community. Those are the types of models—[Interruption.] An hon. Member asks if I will give way. I am trying to answer questions fully. Perhaps I cannot win either way.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
As the Minister will know from past correspondence, I am asking for greater transparency about the criteria used to prioritise asylum hotel closures. I am still not clear about why the Victoria hotel in Chadderton, which was contacted by the Home Office five years ago without any consultation with local people or with me as the Member of Parliament, remains in use. In fact, in the intervening period, the then Immigration Minister, the right hon. Member for Newark (Robert Jenrick) —who now sits on the Reform Benches—increased its capacity from 80 to 120 places.
Oldham has always played its part, often doing far more than other places—in addition to the 114 asylum seekers currently in the hotel, there are 640 in dispersed accommodation in the town—but the Minister must accept that trust taken for granted becomes trust eroded. In the end, it is one housing market. We cannot have a situation where we see a push from hotels to settled accommodation but we allow Serco to take up family housing in Greater Manchester, when there are 500 children in temporary accommodation in my town alone. We have got to see this in the round, and local authorities have to be at the front and centre when the Home Office is doing the planning.
Alex Norris
My hon. Friend is right: there was no consultation on those 400 hotels, and there was no sense of the impact on local amenities and local communities. I think we should do much better than that. That hotel will close. As for the question of criteria, we worked that out in the context of a variety of different factors, including suitability of location, size and who could be accommodated, to arrive at a prioritisation. Finally, let me make it clear to my hon. Friend and his community: all those hotels are closing.
Calum Miller (Bicester and Woodstock) (LD)
Site A at MOD Bicester sits adjacent to a village with only 370 residents. It is more than two miles from the nearest shop, and there is no pavement next to the B road by the site. It is simply not a suitable place in which to locate 1,250 men seeking asylum. That is why a planning inspector rejected a proposal to host half the number there in 2003.
The Minister says that no final decision has been taken, but that is not how it feels in Bicester. While I appreciate that he has taken the time to speak to me twice on the phone, I am yet to receive any written information from the Home Office. However, the Ministry of Defence has already written to service personnel families and told them that the site will take 300 people by the end of this year, rising to more than 1,200 overall. To my constituents, this feels like a decision taken in secret in Whitehall and imposed on Bicester, with local people treated as an afterthought. In less than 72 hours, 7,156 local residents have signed my petition opposing the move. Opposition stretches across the political spectrum, across parties and across the community, because this isolated site is wrong for those seeking asylum and for the small villages around it, with no credible plan for local services, support or social cohesion.
This morning the right hon. Member for Makerfield (Andy Burnham) promised to end the centralised, top-down Whitehall model, so why are the Government racing to do exactly the opposite in my constituency? Will the Minister pause, commit to preparing a detailed impact assessment in partnership with the local community, and come to Bicester to face residents and describe his proposal to them?
Alex Norris
Let me reiterate that no final decision has been taken. The hon. Member made an important point about the written information that goes into the public domain. As I personally found, getting information to people at the right moment, in the right sequence and in the right form is a challenge. Members may recall—you certainly will, Madam Deputy Speaker—that when we named previous sites, I made a commitment that I would call colleagues so that they would find out from me first, rather than from the media. We have been able to do that much, but there is clearly a gap when it comes to the written fact sheets that go into the public domain. In my experience of both Crowborough and Cameron, information is put into the public domain; it will not change on a daily basis, and I recognise that that is a source of frustration, but we will give the best that we can, and we will do the impact assessments that we need to do along the way.
I appreciate that the burden of proof is on us: it is up to us to demonstrate that we can do these schemes well and do them safely. I believe we can. We have already demonstrated that in respect of two sites—and, indeed, Napier barracks, which has subsequently closed—but I need to pass that with the hon. Member. As for engagement from the Home Office, we will ensure that he receives the right information in the right way in order to have the engagement with his constituents. That is a commitment that I would make to you, Madam Deputy Speaker, and to all colleagues.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I thank the Minister for his statement. It is important that we have the means to help people fleeing really difficult situations, and that we clamp down on illegal immigration. The Minister is aware that the widespread use of asylum hotels has put a considerable amount of pressure on local authorities. We have a situation in which over 140,000 households are in temporary accommodation in the UK, with over 175,000 children sleeping in B&Bs, as the Minister knows.
Frankly, asking asylum seekers to find secure accommodation, a job and universal credit within 28 days of receiving their statements is unachievable. That pressure goes on to local authorities, which are already dealing with a massive backlog. The Housing, Communities and Local Government Committee did a recent report on the conditions in temporary accommodation. I would be grateful to know what conversations the Minister is having with colleagues in MHCLG to ensure that when our councils procure temporary accommodation, they are not competing with the Home Office.
Alex Norris
I am grateful to the Chair of the Select Committee for that important question. I agree with her that 28 days is too short, which is why we have extended the time limit to 42 days to give people enough time. We have also put in place move-on liaison officers to support that journey. I do not want people who have received good news about their protection to find that their next journey is on the street.
Our engagement with MHCLG is consistent and constant, and we share the goal of reducing homelessness. As my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) said, MHCLG clearly has a strong view about the impact that we could have on local housing markets. We have those conversations day in, day out in order to tread as lightly as possible. To be clear, we could be out of hotels in three months if we just prioritised the cheapest dispersed accommodation available. I think that would be wrong, and that is what we are not doing.
Mims Davies (East Grinstead and Uckfield) (Con)
I have two issues affecting my constituency. As you will know, Madam Deputy Speaker, Crowborough camp affects the back of my constituency, and Copthorne hotel is close to Gatwick. The Minister, when I met him and the mayor of Uckfield, promised to do proper engagement with MPs. Why did I not find out about the length of stay being extended to 2030 until today? It was the talk of our cadets on Armed Forces Day on Saturday, with London and the south-east affected, and I am very interested in the cost.
On the prioritisation of closures, Gatwick expansion is coming and the Copthorne is one of the 170 hotels where planning permission is running out. It is needed for local uses, and issues of community cohesion and safety are playing out on either side of my constituency. I ask to join Madam Deputy Speaker in hearing from the Minister about Crowborough and Copthorne, because I am seeing this issue play out in real time in my community.
Alex Norris
As the hon. Lady says, this is the choice ahead of us. I believe that the change to larger sites is a good one. The Copthorne must close, and it will. I cannot offer her space in the meeting with Madam Deputy Speaker, but I suspect that she would be keen for the hon. Lady to be there too.
I apologise to the hon. Lady, because I rang neighbouring MPs who have been affected by Crowborough, but not in her case. I hope I will be able to mitigate that, at a point not too far away, when I ring her about Copthorne.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
We are having this debate because of the cost to us all of trying to move from the broken system that this Government inherited to a fair and effective one. We are in this position because the previous Government failed to process people, and the Conservatives now seem to want to rely on creating fiction, rather than fact, about what actually works.
The Minister is absolutely right to argue that we need to tackle the root causes and try to stop people getting into boats. It is also right to recognise that where people are fleeing persecution and that is proven, it is the mark of a good society to help them. It is also more cost-effective. Given that last week the Government lost legal proceedings on the proposal about good character and citizenship, and given the likelihood of more litigation because of the fictitious idea that somebody travelling by an irregular route is somehow less of a person, does the Minister recognise that we will save money by changing the policy and putting integration, not ill will, at the heart of a future system for refugees?
Alex Norris
It is important to recognise the cost of that loss of grip. The previous asylum contract was let on the assumption that there would be about 60,000 people. The previous Government let the figure balloon to double that. It continues to come down, but it is still around the 100,000 mark. We have to make difficult decisions, and that is the nature of the accommodation today.
We have to pivot the model in this country. We were clear in November’s asylum policy statement that we have to make sure that we reduce the pull factors and remove people who have no right to be here, but we also have to make sure that we provide safe and legal means for people to come to the country—that is better. Nobody should ever transit across continents and across the channel.
My hon. Friend’s point about litigation is important. It seems to me that there will always be an element of that in the Home Office, but I think we can pivot to a much better model, certainly through safe and legal means; community sponsorship allows communities to come forward in a positive way. We are not in that place yet, but we are moving to that model. This is an important staging post on that journey.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Although I am more than happy to have the Minister here for hours and hours, we do have other business to get on with, so I ask Back Benchers to make sure their questions are as short as they can be. I call the Father of the House.
Sir Edward Leigh (Gainsborough) (Con)
I thank the Minister for confirming that RAF Scampton is not cost-effective. Frankly, he has been a lot more helpful than his predecessor Conservative Ministers, who have now left the Conservative party, so I thank him.
The problem with these sites, as I know from asking hundreds of questions, is that they are unbelievably difficult to transform into asylum centres, so can I ask the Minister: is this really a deterrent? If someone comes from a hellhole of a country, does it matter where they are going to be sent? However, can I be positive and ask a question in this way: is not the best way to solve this problem to process these asylum claimants very quickly, preferably within a month? There will be some who cannot be sent back because their country is not safe, but surely the solution is to create a returns hub in a Council of Europe country—distant, small—so there is no question of their human rights being abused. That is a real deterrent: to treat them quickly and then send them home.
Alex Norris
On processing, it seems to me that the issue is not now initial decision making, but that we have a significant portion of people waiting for their appeal to be heard, and there is not a quick way to do that. As I say, we have talked about appeals reform, and Members may see things from us shortly on that—I hope we will have their support. The right hon. Member will have heard what my right hon. and learned Friend the Prime Minister has said in favour of returns hubs in the past. Scampton is an important part of Lincoln and Lincolnshire’s economic future, and I look forward to the sale of that site and the positive development of it in short order.
Jim Dickson (Dartford) (Lab)
I thank the Minister for the statement, and the Government’s clear objective to ensure that hotels are eliminated from our asylum accommodation system and that military bases become a short-term stopgap. Can he reassure us all that the Government will continue to focus very closely on processing people more quickly and ensuring that those not eligible to stay here are deported as soon as possible, so that the use of the military bases announced today, which are already up and running, is a temporary measure for as short a period as possible?
Alex Norris
I absolutely agree with that. This is about quicker processing and quicker removals, but I would say—I hope Members can hold this in their heads—that this is also about reducing pull factors. Last year, the volume of people seeking asylum was in the 90,000s. Between 2011 to 2020, the figure was in the 20,000s. That is part of the challenge. Exactly as my hon. Friend says, getting that down to a more steady state will help take out some of the very difficult choices that are having to be made.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
While it is welcome that the proposed use of Cameron barracks in Inverness was ultimately abandoned, that came only after months of unnecessary uncertainty for local communities following an announcement made without meaningful engagement with the Scottish Government, Highland council or NHS Highland. Does the Minister accept that bypassing devolved partners and failing to consult local communities undermines confidence in the asylum system? Will he commit that any future decisions on asylum accommodation in Scotland will be made only after meaningful engagement with the Scottish Government, local authorities and local MPs? Will he acknowledge that, while military sites may relieve immediate pressure on the system, they do not address the underlying failures driving the accommodation crisis, including slow decision making, inadequate planning and a lack of suitable community-based housing options?
Alex Norris
I am grateful for that question, and I am very aware of the Scottish Government’s New Scots programme. It is the clear position of the Scottish Government that they want to see people from outside Scotland coming to live there and being part of Scotland’s economic future. I am committed to working with Scottish counterparts to make that a reality. There is a challenge, because that sounds good in a global sense, but down at an individual level, it may sometimes seem less attractive. There are challenges in Scotland, particularly the fact that 60% of asylum seekers in Scotland are housed in Glasgow—that is an equity point in Scotland that I think could change. However, I absolutely will work with my Scottish counterparts. I have met them and will continue to do so.
Sonia Kumar (Dudley) (Lab)
I welcome the Government’s closure of the asylum seeker hotel in Dudley. It was a Conservative party policy that was a complete waste of taxpayers’ money. What steps is the Minister taking to reduce the asylum backlog and the dangerous, illegal boat crossings?
Alex Norris
This is about quicker decision making, the commitment we have made to appeals reform and better collaboration with our European neighbours. Those elements are adding up to significant progress, which is why we have seen numbers fall. This is the next step to get us on the final leg of that journey.
Dame Caroline Dinenage (Gosport) (Con)
The Minister spoke about necessary arrangements and approvals being followed, but the Haslar immigration removal centre proposals are meaningfully different from those originally planned. The Home Office is bypassing the local planning authority, Gosport borough council, and the public consultation has been utterly derisory. This is a residential urban area, yet local people do not have any opportunity to have a say, because it will be decided by the Secretary of State in Whitehall.
Leaving aside all the rhetoric, can the Minister just answer some straight questions? Will he set out exactly how many people will now be housed at Haslar, who they will be and how long they will stay there? What opportunity will neighbouring residents have to influence the development and how it looks? When will the Home Office have proper public meetings, so that Gosport people can put their questions and have them answered? Will he meet me to answer all the other questions I am getting from my residents, who are furious about what the Government are doing?
Alex Norris
I will of course meet the hon. Lady. Immigration removal centres are, of course, an entirely separate matter from what we are talking about here. I do not have those numbers at my fingertips, but I will get them to her in short order. There is a point of difference in terms of the engagement, as I can see from the correspondence between us on what has and has not been shared at public meetings about the nature of the site, but let us have that conversation so that we are speaking with one version of the truth.
Peter Swallow (Bracknell) (Lab)
My hon. Friend will know that Bracknell welcomed Afghans who supported our armed forces in transitional accommodation under the Afghan resettlement programme, but under the system introduced by the Conservatives that is not taken into account when considering a local area’s ability also to deliver asylum accommodation. He will know that I have been lobbying him on this matter, because small unitary authorities such as Bracknell Forest council cannot be expected to do more than their fair share. Can he provide an update on progress?
Alex Norris
My hon. Friend has doggedly pursued me on this very important issue. It is really important that, as the Home Office, we consider the broader context—such as what he says with regard to Afghan resettlement scheme provision—around a community’s ability to sustain a supported population and that full dispersal model we inherited from our predecessors. What we have put in place, in our attempt to close the gap between local government and national Government, is a postcode check process, so that councils can say, “Well, hang on a minute, there is provision in this area that means it might not be suitable.” We are going through that process in Bracknell at the minute and I will work with him to hopefully get to a satisfactory conclusion.
Sir James Cleverly (Braintree) (Con)
The Minister keeps bragging about closing asylum hotel accommodation from the peak of 400. Can it be put on record that I closed 180 of those asylum hotels in six months and the Labour Government closed only another 30 in two years? I would just like that read into the record.
More broadly, large-scale asylum accommodation centres have a detrimental effect on local communities, as we have seen in Weathersfield: people are unable to sell their houses, and the number of children applying to go to the local primary school is dropping off and it is now close to being financially untenable. That is why there was a time limit on the use of Weathersfield. We also know that when the number of people in these centres is too large, disruption happens and fights break out, which is why there was a cap on numbers. We learn that the Government tried to sneak out over the weekend an increase on the cap and an extension to the time, completely undermining the confidence of the people of Braintree in this Government. Will the Minister now accept that that is a completely unprofessional way of doing this? It is deeply unfair to the people of Weathersfield and the surrounding areas. I urge him now, before it is too late, to rethink his proposals and scrap the foolish extensions of both time and capacity at the Weathersfield asylum centre.
Alex Norris
I am grateful to the right hon. Gentleman for his questions. It is not bragging to say that under the previous Government the number of folks accommodated in hotels was 56,000 at its peak and it is now at 21,000. It is important for the public to understand those changes. He talks about the record in Government. He will know his own Government’s record at Weathersfield and the choices made there, too.
On capacity, the right hon. Gentleman knows—because we have spoken about it—that Weathersfield exists normally in a steady state of around 850, with, as he says, the surge ability to operate at 1,250. With the number of years we have had at Weathersfield, it is right to consider how best that provision can operate. Those are conversations we will have. He will have his chance to go in studs up on me, which he never misses, and come in and tell me what we ought to do differently, but it is right that we look at those things in the public interest. That is what we are doing.
Mr Toby Perkins (Chesterfield) (Lab)
The Minister is right that all we saw under the previous Government were the numbers going in the wrong direction and the operation of Government coming to a standstill. Of course, we should never forget the role of the right hon. Member for Newark (Robert Jenrick), who does not grace us with his presence in the Chamber, but who was the orchestrator of all this. The Minister is right to bring down the numbers, which are now heading in a positive direction. He will know, because of the many times I have contacted him, about the urgency of returning the Sandpiper hotel in Chesterfield to its proper purpose. It is now being massively underutilised. Will the Minister tell us when we are likely to see the Sandpiper, which has done its turn, being returned to proper use? On appeals, can he tell us more about how we will ensure that the cases of those whose appeals have no serious prospect of succeeding can be expedited so that we do not have the appalling backlog in the appeals process?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I remind colleagues that it is always best to let other Members know in advance if you intend to refer to them.
Alex Norris
In a general sense, a number of the people we now see in leadership positions in the Reform party were previously in the Tory party and had significant agency over this issue. They pretend now to be concerned bystanders, but actually they are the architects of the situation we are now in. I feel for some of our Conservative colleagues who have been left to tidy up behind them—at least they stand and take on the question, as right hon. and hon. Members have done in this debate. On my hon. Friend’s point about the Sandpiper, I cannot give him a date but I will say, to be clear to him and his community, that it will not be open a day longer than needed. The Sandpiper hotel is a vital community amenity that needs to be returned to its public use. With regard to important reforms to appeals, my hon. Friend may not have to wait much longer to see more.
Tim Farron (Westmorland and Lonsdale) (LD)
The use of hotels for warehousing asylum seekers is expensive for the taxpayer and utterly miserable for the people who are stuck there waiting for their asylum cases to be heard. Does the Minister share my fear that the atmosphere of hostility towards those seeking asylum is hurting those who desperately need sanctuary. I have an Iranian constituent who is a critic of the regime and a Christian convert—and therefore guilty of apostasy under Iranian law. By any stretch of the imagination, they cannot safely be returned to Iran, but they face that fate unless their case is accepted. Will the Minister look at that case and, more broadly, ensure that genuine refugees do not become victims of political posturing?
Alex Norris
Having visited such hotels, I recognise that they are not as advertised—or distorted—by others. The ultimate distorters are the human traffickers, for whom it is a significant upside to say not only that the conditions are good, but that it is easy to work illegally from the hotels. We must change that reality. I am concerned, as all colleagues would be, about the public conversation on this issue, and the risk that vulnerable people and their neighbours often face. We are never far away from challenge in that space, but it is incumbent on us to ensure that we do not play into that rhetoric. On the case that the hon. Member raises, every case will always be heard individually and on its merits. I cannot promise to intercede in that case, but I will ensure that the system handles it properly.
Rachael Maskell (York Central) (Lab/Co-op)
This decision looks like the politics of the past, not the future; a decision made in Whitehall, not in our communities. In 2022, RAF Linton-on-Ouse was deemed unsuitable as a site, because the drainage and sewage system would need major restoration, there would need to be an upgrade in the power capacity, and there are no amenities near the site—and the site has deteriorated further since that decision. The inadequacy of public transport, and other forms of transport there, also stands out.
In my human rights city, we rejected the proposal last time, and we worked cross-party in order to put forward that case. People from Linton-on-Ouse contacted me over the weekend, restating those reasons for rejection. Will the Minister listen to local residents and local authorities? City of York council, which I spoke to this afternoon, has said that it has not been offered any resources, planning or engagement regarding the decision, yet Linton-on-Ouse faces York and there would be major implications for the city. Will the Minister ditch this plan, work with MPs and find an alternative way forward?
Alex Norris
I am well aware of York’s status as a city of sanctuary—[Interruption.]—or as a human rights city, forgive me. I always want to work with the people of York to ensure that asylum seekers are humanely housed. Nevertheless, the challenge today is that we have around 100,000 people in the supported population and 170 hotels, give or take. We have to change that reality. There are limited options. I believe that this is the best way forward, but I know from what my hon. Friend and others have said that it is incumbent on us to show that we can deliver it in a way that is respectful of the local community. That is what we are seeking to do.
Mark Pritchard (The Wrekin) (Con)
Missing from the statement, unless I missed it myself, was the word “deterrent”. The Minister suggests that it is good news, and people moving out of hotels into other accommodation is just that. What he does not mention, however, is that other accommodation also includes houses in multiple occupation, and there are only so many military sites that may or may not be available.
Given that I wrote to him on 18 June, would the Minister meet me to discuss Stoke Heath in my constituency, a village—actually, a rural settlement—of about 352 people that is going to see the arrival of up to 121 asylum seekers? This rural settlement has no integrated public services and very few public services at all. The nearest bus stop, for example, is a 30-minute walk away. Will he accept that a community meeting being held on Thursday, chaired by myself, should at least have somebody from the Home Office or Serco in attendance? People are being kept in the dark. There has been secrecy—no consultation and no transparency. People have a right to know what is going on. Would he encourage a member of Serco to come along to that meeting and answer some of the local community’s concerns?
Alex Norris
I am grateful to the right hon. Gentleman for his question. I am well aware of the matter concerning Stoke Heath, as he has pressed hard both verbally and in writing on that already. I will, of course, have the meeting with him that he asks for. I did not use the word “deterrent”, but I did use “pull factors” in the same context. We have to change the reality of the differential attractiveness that has seen applications for asylum in this country go up while they go down across the EU. This is part of that programme. The right hon. Gentleman mentions an upcoming meeting. Let me speak to the Department and see what we can do to ensure that he can have the fullest discussion possible.
Andrew Pakes (Peterborough) (Lab/Co-op)
I welcome the Minister’s statement and the serious attempt by this Government to get the backlogs down, change the system and reduce the use of hotels. Peterborough is a warm, generous place, but we already do our fair share in looking after asylum seekers. I ask the Minister to consider my real fear in this, which is the broken trust we have, because too many people in places like mine—myself included—think that the system is rigged by suppliers such as Serco, which pick the cheapest places to put asylum seekers.
When I was elected, based on the record of the Conservatives, Peterborough already had the highest number of asylum seekers in the region. After the general election, under this Government, Serco opened the Dragonfly hotel with no consultation and without informing me or my neighbour, my hon. Friend the Member for North West Cambridgeshire (Sam Carling), or indeed the council, the police or any local services. It put us in a really difficult position. I know that we are bringing down numbers in the Dragonfly hotel, and I know that the Minister will not be able to tell me today the specific date by which the hotel can be shut. What can he tell us instead about how we can keep control of monsters like Serco, which drive this policy and mean that places like mine feel that the system is rigged and feel left out and left behind
Alex Norris
I am grateful to my hon. Friend for his contribution and for his continued lobbying in this space. As he says, I cannot give him a date for the Dragonfly’s closure, but I can tell him that it is uppermost in my mind and that the Dragonfly will close as soon as we physically can do that. On the system, we are trying to close the gap between those who administrate the asylum accommodation contracts and local government. Crucially, through our leadership, the responsibility for that belongs to me and other Ministers, rather than the providers. The contract is not good—let us be clear about that. Again, I do not blame previous Ministers who led on that in 2019. We are seeking to change that model through the process we are now undergoing in renewing the contract in 2029. As always, I say that I would municipalise everything. I do not think that is our reality at the moment, but I do want a more mixed economy so that it is more sympathetic to communities and there is greater agency in the system, and that is what we are going to do.
Sir Andrew Mitchell (Sutton Coldfield) (Con)
The hon. Gentleman, who is a diligent and sensible Minister, will understand the deep disappointment in the royal town of Sutton Coldfield that the Ramada hotel on Penns Lane was not included in the recent list of closures, not least because it was on the list before the general election. He was very generous with his time in seeing me and listening to why that location is totally inappropriate in Sutton Coldfield. Can he reassure me that the facility will now be closed as soon as possible?
Alex Norris
The right hon. Gentleman knows my enthusiasm for Royal Sutton Coldfield and the strength of its plan for neighbourhoods programme from a previous, much happier engagement I had with him. I did wince when his number came up the other day, because I knew that he would be pressing hard on why it was not his hotel that had been closed. I assure him that we will close it as soon as possible, and I know how important it is that it is returned back to the people of Royal Sutton Coldfield for marking births, marriages, funerals and all sorts of other things that make life what it is.
Alex Ballinger (Halesowen) (Lab)
Last week we heard the very welcome news that the final asylum hotel in Dudley borough has closed. The system set up by the Conservatives was a complete failure. It was very inappropriate to house people in town centres, and it was extremely costly for the taxpayer. I am very pleased that this Labour Government are finally sorting it out. Part of the solution is to deport people with no right to be here. Can the Minister outline how many people we have deported since the election and what further steps we are taking to sort out returns agreements for other countries where we are struggling to do so?
Alex Norris
I absolutely can, and I am pleased about the good news for Dudley. Since the election, we have removed 67,000 people who have no right to be here. That is a significant increase—approaching 30%—on the equivalent period under our predecessors, but we must go further. We have secured a number of extra returns agreements. I want us to have returns agreements around the world, because they are the building blocks for safe removal. We also need more detention capacity. Our predecessors left our detention capacity in a much thinner state than it needs to be in order to effect removals at the level we expect to see. I am pleased with the progress that we have made, but there is much more to do.
Sammy Wilson (East Antrim) (DUP)
People have a right to be angry that the Government have sought to impose hundreds of asylum seekers on their communities without consultation. The Minister has talked today about the deterrent factor. When we spend billions accommodating people, then support them financially and give them services that many local people are not able to get, and in 90% of cases grant them asylum, is that not a pull factor that brings people to the United Kingdom? Is the way to deal with it not simply to make it clear that if someone comes into the country illegally, it does not matter how good their case is—they will not be granted asylum?
Alex Norris
The idea that 90% of cases are granted is for the birds—it is not even half that. It is also not true that people who are accommodated in hotels are living a luxury lifestyle. In reality, that is far from the case. These are not great places to be; they are safe, humane, dignified and legal, but that is it. I just cannot accept the idea that it is a great time for them. It simply is not true. The traffickers exploit the idea of living in a hotel and working illegally. That is the reality we have to change. That is how we get to an ordered and controlled system and reduce demand back to a normal level.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for his statement and the work he is doing to tackle this important issue. As my Harlow constituency borders Epping, I am not unaware of the challenges that asylum hotels and the activity surrounding them pose for communities. I thank him for the work he has done on that. Is not the key issue the asylum backlog that was left by the previous Government? Can the Minister outline what this Government are doing to bring down the backlog and deal with the issue of appeals, which he mentioned in previous answers?
Alex Norris
The backlog is one of the major sins that explains why the supported population is much larger than we would expect it to be. We have got through the backlog in initial decision making, and the pressure now is in the appeals system. That is why the King’s Speech referred to important reforms that are coming to the appeals system, and colleagues may get to see those shortly.
Greg Smith (Mid Buckinghamshire) (Con)
The site identified as MOD Bicester sits just over the Buckinghamshire border in Oxfordshire and is incredibly close to villages in my constituency, including Boarstall, Oakley, Long Crendon, Marsh Gibbon, Ludgershall, Twyford, Charndon and others. I can assure the Minister from comments I have heard from constituents over the weekend that nobody thinks this is a good site for such a centre.
I would like to pick up on the answer the Minister gave an hon. Member earlier about medical provision on these sites. He said that medical provision is provided on site. I know from bitter experience in the last Parliament that provision was delivered on site at an asylum hotel, but it was delivered by a local GP practice, which then could not serve everybody else in the area in the normal, timely manner. Can the Minister be really clear, given that he cannot magic up doctors and primary care, that if the Bicester site goes ahead—I hope that it does not —there will not be pressure on local GP services in my constituency of Mid Buckinghamshire or, indeed, on the Oxfordshire side?
Alex Norris
We have had success on other large sites where that has not been the case. Individuals need to register with a GP, but it is our intention that the impact on the local health service will be minimal. There is the question of emergency medicine, because there will not be provision for that on site. I appreciate that the hon. Gentleman is setting that test; it is one that I very much want to meet.
Helen Morgan (North Shropshire) (LD)
May I raise my concerns about the site at Stoke Heath, which was mentioned by the right hon. Member for The Wrekin (Mark Pritchard)? It is a really rural location, with the nearest town being Market Drayton in my constituency, and people there are very concerned about the appropriateness of the site, with it being 30 minutes’ walk from a bus stop and there being no shop. Shropshire council has raised its concerns about the site’s remoteness.
Given that we have seen increasing far-right infiltration in Shropshire, with people beyond the constituency borders spreading misinformation and hatred on Facebook, I am concerned about the security of the people in the development at Stoke Heath. What measures are being taken to keep those people safe? Will he explain what the criteria are for a suitable location for dispersal accommodation? It seems to me that somewhere without even a bus stop or a shop is a really inappropriate place.
Alex Norris
I am grateful for that question. I will mirror the commitment I made to the right hon. Member for The Wrekin (Mark Pritchard) and ensure that the hon. Lady gets whatever information she needs on Stoke Heath. On how sites are chosen, there is a mix of factors, which include local amenities, travel and transport. Those are looked at carefully before providers bring ideas forward. If a local authority has a challenge, it can bring that to the Home Office for adjudication, where all those factors are considered together.
Bradley Thomas (Bromsgrove) (Con)
With 76,000 illegal crossings in the last two years, this is clearly a problem that continues to affect our country, and one that has profound social and economic consequences—largely negative ones—on communities across the country. The Government are talking about a new approach to move this problem away from communities, so I was surprised to read the other day about the specific refugee scheme reported in various media outlets. Surely it will increase the attractiveness of illegal migration via illegal routes. Anyone who travels to the UK via an illegal route should be deported. This scheme is a contribution to the pull factor.
Alex Norris
I can help the hon. Gentleman with that. The whole point on safe and legal routes is that those are not the means by which people are coming into the country. As he will have seen in the commitments we made in the asylum policy statement in November, if people choose to come via irregular means, their route to settlement will be a very long one indeed, with a 30-month renewal of that protection. What we are trying to do is to change those behaviours in exactly the way that I think he and I want.
Ayoub Khan (Birmingham Perry Barr) (Ind)
I have spoken to many asylum seekers who have endured some of the most horrific and atrocious life experiences. The Minister will know that, historically, the courts have deemed an Army barrack unlawful because of the inhumane conditions within it. What assessment has the Minister made of the suitability of the new barracks being considered?
Is not the real issue the processing of these asylum cases? I know that the Minister said that decisions are at a 24-year high, but there are no figures on how many applications have been processed and how many applications are waiting, not including those at the appeal courts.
Alex Norris
First, on lawfulness, this very minute we are operating two schemes very lawfully. On quality, many of these sites—certainly those we brought forward in the past—were good enough for the resettlement of Afghan families, and indeed they have been good enough for our own soldiers. I therefore contest the idea that they are not good enough.
The point about processing is important. As I said, we have functionally got through the backlog; the issue now is the demand in the appeal system, with the statistic being a 58-week wait. Yes, processing is important, but so is the reduction of demand. As I said, we are operating at three times the level we would have been at a decade ago. We have to change that reality, and this announcement is part of doing that.
Sir Ashley Fox (Bridgwater) (Con)
Does the Minister appreciate that the reason he is commissioning former Army bases and spending millions of pounds on more asylum accommodation is that his Government’s policy of smashing the gangs has completely failed? There have been 76,000 illegal crossings across the channel into our country, and until he accepts that those are economic migrants who should be deported when they arrive in our country, this problem will continue.
Alex Norris
The facts do not bear that out. We have a system that separates those who are travelling economically and those who are seeking protection. I do not want this country to lose its proud history of providing protection for people who need it. That is why we are doing this in the way we are doing it. We have taken significant steps forward in controlling the system, alongside our French counterparts. That is why, for the first time, we are seeing asylum applications coming down, as well as positive progress in the channel, as my right hon. and learned Friend the Prime Minister has said. Of course, the traffickers had a six-year head start on us, but unless I am mistaken, which I really do not think I am, it cannot have felt like failure when we closed the hotel in the hon. Gentleman’s constituency.
Jim Allister (North Antrim) (TUV)
The Minister said that the business of this Government was to secure the borders of this nation. In that context, can I therefore ask him how many of the buses travelling through the open back door into the United Kingdom from the Irish Republic have ever been stopped and how many of those seeking asylum have had their credentials checked since this Government came to power two years ago? We all know what happened a few weeks ago in north Belfast, where an asylum seeker is now in custody for attempted murder, yet there has been no effort by this Government to close that back door. Why is that? Why are we allowing people to enter this United Kingdom unchecked? We talk about stopping the small boats. When are we going to stop the buses?
Alex Norris
The hon. and learned Gentleman makes an important point. I cannot wholly agree with what he says, but this is important. As we win the battle in the channel, the common travel area—which is obviously an arrangement of very long standing indeed—will be a point of challenge. I am working closely with, and have spoken to, the First Minister and Deputy First Minister on this point. The work is ongoing to keep the common travel area as protected as possible, and we of course work with the Government of Ireland as well. That collective work is how we make sure that the CTA is not exploited.
John Cooper (Dumfries and Galloway) (Con)
The Mercure hotel in Dumfries is home to around 100 men of uncertain origin and, thanks to the good offices of the Home Office, I have been able to visit. However, I have not been able to get any clarity on the criteria for closure and certainly not on any kind of timescale for closure. Can the Minister, without recourse to saying, “We will close it in due course”—which is beginning to sound a bit like the old jibe about the first world war: “It will be over by Christmas; we just cannot tell you which Christmas”—offer us a bit more clarity on when these hotels will be closed?
Alex Norris
I think that is slightly unfair. The hon. Gentleman knows that they will all close by 2029, but within that, none of them will be open for a day longer than they need to be. In terms of criteria, a range of factors including size, condition and location goes into the decision making. I appreciate that in a process of reducing the number from a couple of hundred hotels to nil, everybody will want to be the first one, but all of them will close.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for his statement and for his clear commitment to addressing these issues. That cannot be in doubt. This continues to be a massive issue in my constituency of Strangford and, indeed, across all of Northern Ireland. The shifting of thousands of individuals out of hotels and into large-scale alternative accommodation sites such as military barracks, vessels and repurposed institutional facilities is not a solution. It is simply moving a massive, expensive problem from one community’s doorstep to another’s, so when will the Government stop managing the symptoms of illegal immigration and start deploying the robust enforcement, rapid detentions and immediate deportations needed to secure our borders and end this accommodation crisis once and for all?
Alex Norris
It is rare that I disagree wholeheartedly with the hon. Gentleman. His incredible work on the persecution of Christians abroad, for example, is something on which I agree with him, and it shows the importance of having managed but humane asylum systems around the world. That is what we must have in this country. I did not take it from what he said that we are actually that far apart. He talks about the cost in financial terms and about the cost in terms of the community. I share those concerns. These types of schemes are part of changing that reality, because they will reduce the pull factors so that people are not tempted to come here or exploited by traffickers to do so. I think that that is the right balance.
Madam Deputy Speaker (Ms Nusrat Ghani)
It is deeply disappointing that I have to remind the Minister and the Treasury Benchers that paragraph 9.1 of the “Ministerial Code” and paragraph 19.21 of “Erskine May” make it clear that statements on important matters should be made to this House first, not to the press at 10.30 pm on a Thursday night. MPs and their constituents should hear about important policy news in this House first. I expect much better from the Minister. It is totally unacceptable that constituents and MPs hear about important policy matters on the news and not in this House. There is an impact on Members, including me as a constituency MP, and our constituents deserve much better. Minister, we need to see better from you on this.
Bill Presented
Estimates Day
Cabinet Office
(1 day, 4 hours ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Joint Committee on the National Security Strategy.
Matt Western (Warwick and Leamington) (Lab)
I thank the Backbench Business Committee for granting this debate, which could not be more timely given the crucial NATO summit next week in Ankara. I was hoping that we would be inundated with contributions from across the House, but sadly it looks as though we might be limited to one or two.
Keeping the country safe is the first responsibility of any Government. The Joint Committee on the National Security Strategy, which I chair, has undertaken a huge amount of work during this Parliament to examine the Government’s approach to protecting the UK’s national security interests. From critical national infrastructure to the defence of our very democracy, our Committee has been working hard to highlight areas in need of vital improvement.
There is no one “National Security Department”, of course, but the Cabinet Office co-ordinates the Government’s approach to national security and is the home of the national security secretariat. The Cabinet Office’s main estimate states that it plans to spend about £1.1 billion on day-to-day running costs and £600 million on investment projects, of which around £200 million in day-to-day costs and £25 million in investment will go towards keeping the country safe. However, national security is, at its core, a whole-of-Government responsibility, and it is therefore often difficult to get a handle on how much is being spent on the UK’s security and resilience—a point that I made to the Backbench Business Committee.
In an era of unprecedented uncertainty and hybrid warfare, the case for increased spending on security and resilience could not be stronger. We see a proliferation of threats not just from hostile state actors, but from organised proxy groups and radicalised individuals. Take the cyber-attack on Jaguar Land Rover in August 2025. The New York Times now reports that it was Russian in origin, and the evidence suggests that the Kremlin was either directly responsible for it or responsible for facilitating it through proxy actors. The impact was severe: it cost the British economy £2.5 billion, directly cost Jaguar Land Rover £485 million in the quarter and affected more than 5,000 firms. It was so significant that it impacted our quarterly growth figures.
Threats are increasingly facilitated through the weaponisation of emerging technologies, such as artificial intelligence and quantum. Those who would seek to destabilise our democracy, our safety and our way of life have more opportunities than ever before to do so, and they know that. Meanwhile, the Government and NATO allies have already acknowledged this reality with their commitment to spend 5% of GDP on defence by 2035, with 1.5% of that being earmarked for security and resilience.
Helen Maguire (Epsom and Ewell) (LD)
Does the hon. Member believe, like I do, that the Russian hybrid warfare we are seeing in the UK at the moment is further fuelling disinformation, including online? We know that the arson attack on the Prime Minister’s car was directly linked to Russian state operatives. If there was ever a moment when we needed to stipulate a specific budget, now is that moment.
Matt Western
That is such an important point, and I do not think that we as a Chamber have given it enough airtime. If we think about what would happen if any other premier of any other country was attacked like that—their home attacked and their car set on fire—the reaction from the media was quite muted. Now that it has become more obvious what happened, despite all the nonsense that circulated on social media at the time, it is important that that conversation happens.
We are at a crucial juncture, as the hon. Member suggested. We are running out of time to ensure that we are prepared for a worst-case scenario of increasing Russian aggression, both conventional and hybrid. At a time when the United States’ security presence in Europe is being questioned, the threat from China looms ever larger, and the UK finds itself in a difficult position as a middle power in the midst of global strategic competition between the United States and China. As such, it is imperative that the Government are robustly held to account in delivering their spending commitments on defence, security and resilience.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for his introduction and his wise words, ever mindful of modern warfare and the way it is going, and the changes that the Government and we as a nation need to be prepared for. When it comes to resilience and drone technology and how to use that to the betterment and the safety and security of this country, does he believe that we need to be at the top of that tree to ensure that we can protect our people across this great United Kingdom of Great Britain and Northern Ireland?
Matt Western
The hon. Member is absolutely right. The nature of our security is so multifaceted now in a way that it would not have been 30 years ago. Globally, we are beginning to get our heads around—I am sure the Government recognise this—how we need to pivot and reset ourselves into a very different defence and security posture, because our defence is as much on our mobile phone and our laptops, and to our way of life and our democracy, as it is at our borders, and that is crucial.
My Committee was encouraged to hear from the Chancellor of the Duchy of Lancaster that the Government believe that they are on track to hit the target of 1.5% of GDP on security and resilience by 2035 by 2027—well ahead of time. But they have also been evasive on exactly what the spend will entail. Like any target, there is a risk of money being merely shuffled from one pot to another—an administrative exercise rather than genuine additional funding. My Committee recommended that the spending is prioritised on investment in systems that can help build long-term resilience, in addition to spending on maintenance of basic civil infrastructure.
When we questioned the Minister, we sought to clarify what new resilience projects and capabilities the 1.5% would entail. We were given, I am afraid to say, only vague answers. Disappointingly, the Government’s response to our report on the national security strategy failed to elucidate much further. We recognise that there are reasons for being protective about certain information and not disclosing too much detail, but we seek more specificity in exactly how the Government are making critical infrastructure in the UK more resilient through this spending.
In fact, I recently met the high commissioner of Canada who explained that they are investing hundreds of millions in large-scale infrastructure projects in their part of the High North, be it railways, road networks or deep sea ports. They are all planned to boost resilience across the nation.
Leigh Ingham (Stafford) (Lab)
I, too, was recently in Canada with the Business and Trade Committee, and there was significant talk about the infrastructure projects that people have invested in. Beyond that they talked about the “Canada Strong” policy, which is about supporting industries in Canada, and ensuring that money being spent for the benefit of public good is spent with Canadian companies. Does my hon. Friend agree that the procurement reforms made by the Cabinet Office in March are some of the most significant that we have seen in a generation, and should benefit British industry?
Matt Western
My hon. Friend is absolutely right. I have not been to Canada in recent decades, but I am hearing that its approach should be of real interest to us, including how it is prioritising certain sectors and has identified certain capabilities. Although people are protective about what those capabilities might be, I would certainly welcome conversations behind closed doors with Ministers about what we are looking to do in a similar vein.
It is striking that the Canadians are outlining their major projects and how they will spend their money, but they are also focusing on their capabilities. Here we have suffered from a lack of long-term commitment to investing in national security and preparedness. Our Government must also clearly outline what additional capabilities they are committed to developing through the target spend, prior to the start of the NATO summit next week. We need a national conversation about our nation’s defence and security. Over the last 18 months my Committee has heard repeatedly about the need to get the public on board when it comes to increased spending on defence, resilience and security. With the public purse under such strain, our constituents must understand why spending on such areas must be prioritised.
Helen Maguire
I also recently met the ambassador to Canada—this goes back to the point raised by the hon. Member for Stafford (Leigh Ingham), who stated that one reason for the infrastructure in the High North was so that there was something sovereign to defend. That is incredibly important. The ambassador also explained how, when selling that to the general public, when most people talk about defence they think about different toys—bullets and ships—whereas in Canada was talking more about investing so that they have something to defend that is about their country, jobs, industry and everything else. Does the hon. Member agree that we should also get that important message out to UK residents?
Matt Western
As if on cue, the hon. Member’s point is one I am just about to develop. The strategic defence review called for a national conversation, and during our inquiry on societal resilience we heard much about how our allies are engaging their citizens with that essential work. The UK is, I am afraid, a little behind the curve. Beyond the Baltic and Scandinavian nations, whose security and resilience is well documented, other nations are also moving up a gear. Their Governments engage significant numbers of military reserves, volunteers, firefighters, private defence organisations and NGOs in that conversation. In certain countries, everyone between the ages of 18 and 65 has a role in resilience—every single person. Some countries conduct wargame exercises on civilian defence, to identify weaknesses in their systems. Less obvious countries such as the Netherlands and Canada are making painful choices that are necessary to ensure that societal resilience can be strengthened. The situation warrants a reset of our whole approach to resilience and security, but to do that we must bring the public with us through a national conversation.
Edward Morello (West Dorset) (LD)
It has been my huge pleasure to serve on the hon. Member’s Committee for the better part of the last two years, and as I stand down from it, I wish to thank him for his leadership—it has been exemplary.
On the whole-society conversation, to go back to the hon. Gentleman’s earlier point about the incident with the Prime Minister’s car, does he agree that we must do a better job of informing the British public about the actual threat? The first stage is getting the public to understand the real threat that we are facing right now. We are under hybrid attack, and we will need the whole of society to support us in the solution.
Matt Western
I thank the hon. Member, who I would also call a friend, not just for his kind words, but for his valuable contributions to the Committee over the past 18 months or so. Yes, it is vital that we engage the public, and it is incumbent on our media to start spelling some of this stuff out—not fearmongering, but explaining some of the harsh realities of what we face. There are certain nations who wish us absolute harm—we are their public enemy No. 1. We need to be much more open about that in our discourse with the public, not so as they become overly alarmed—as I may have been as a kid growing up—but so that they recognise the sorts of pressures that we face economically, socially and militarily. The situation demands that we bring the public along with us. The Committee has discussed how we develop that nationwide conversation, possibly including an education programme, by being more honest with the public about the threats that the UK faces.
The pandemic highlighted huge gaps in our country and society’s resilience. Are we ready for the next crisis that might be heading our way? We must not fearmonger, but the Government must learn all they can from our allies who are further ahead of us with spending on resilience and preparedness. I want to stress that the situation was obvious to the last Government too.
It is increasingly clear that for too long the UK has outsourced its security and resilience needs elsewhere, and is now entirely dependent on others for critical elements of its infrastructure. It is only through increasing the scale of investment in its sovereign capabilities, particularly in the realm of emerging technologies, that we can wean ourselves off these dependencies.
The defence investment plan is crucial. It is essential in guiding businesses and investors. Direction is needed, as well as dynamism and agility. At a time when UK firms need certainty, we still lack clarity on exactly how investment will be allocated. As we highlighted in our report on the national security strategy, the longer businesses lack an adequate signal from Government about what investment might be on the way, the more vulnerable they are to acquisition by foreign investors and the more difficult it becomes to achieve our sovereignty goals.
The Government have made steps in the right direction through investments as part of the AI opportunities action plan and the work of the sovereign AI unit. Those are to be commended. The UK has a strong base of talent in those technologies, but the Government need to go further and faster to secure our advantage in the long term. Now is the time to secure the investment, the jobs and economic security we need through a proper digital sovereignty strategy. As we saw last week in the series of cyber-attacks, economic security is national security.
The Joint Committee on the National Security Strategy will continue to fulfil its role and to press the Government on all these points and more in a constructive and collaborative way, as it has done these past 18 months. It is only through robust challenge and scrutiny that we can ensure the Government are doing all they can to keep the people, businesses and critical systems of the UK safe and secure. As Lord Robertson of Port Ellen told the Committee earlier this year,
“it is much better to pay for deterrence than to pay for war.”
It is also, ultimately, less costly. I urge the Government to take heed.
Dr Ellie Chowns (North Herefordshire) (Green)
I thank the hon. Member for Warwick and Leamington (Matt Western) for introducing the debate so well. He makes many excellent points, including that we face a wide range of threats to our security and resilience. Clearly, we face threats from hostile actors and not just through conventional means: he talked about cyber-warfare and the threat of disinformation. He briefly touched on the effects of the pandemic on our country. The covid pandemic, which killed nearly a quarter of a million people, was the greatest threat to human health for many decades. Recognising pandemic preparedness as hugely important within the security and resilience framework is key.
Another key threat to our country’s security and resilience, which does not receive nearly enough attention, is climate breakdown. It is not just the environmentalists but the ambulance workers who say that, and the Joint Intelligence and Security Committee’s national security assessment itself says that ecosystem breakdown poses a clear threat to national security. The Committee on Climate Change has pointed out that we are woefully ill-prepared as a country for the effects of climate breakdown.
We urgently need to take more action to avoid causing climate change. Equally, we urgently need to take far more action to recognise the threat to our national security and resilience posed by the effects of climate breakdown. That was brought home to us in hugely clear terms last week, as we faced the second major heatwave of the last month or so. That heatwave led to record call-outs for the ambulance service—even more than under covid.
A couple of weeks ago, I spent time with the London ambulance service, which told me that the May heatwave saw its highest number of ambulance call-outs, even including covid, and that terrible record was exceeded last week. We have to recognise the reality of the effects on human life and livelihoods and the effects on our national security and resilience caused by these issues.
This is not just about the health effects. I spoke to numerous constituents over the weekend about the effects that the appalling temperatures faced by our students are having on schools. Clearly, we need urgently to put in place maximum temperatures for schools and workplaces and take action to ensure that that is followed through.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Member accept that there is a certain irony when the same people who are concerned about climate change and temperatures rising have campaigned for air conditioning to be taken out of buildings because of its energy consumption and carbon dioxide emissions? We cannot have it both ways, can we?
Dr Chowns
I honestly do not recognise the caricature that the right hon. Gentleman paints. Technology exists to provide both heating and cooling in ecologically friendly ways, and that is absolutely what we need going forward. We need far better building standards so that we build buildings that adapt and are suitable, and we need homes that are fit for the future. That is essential.
The Committee on Climate Change—the Government’s independent adviser—has set out repeatedly that these solutions are available and has set out the things that we need to put forward. The Committee has also set out repeatedly, as have any number of people over any number of years, the fact that the costs of inaction far exceed those of action. The hon. Member for Warwick and Leamington (Matt Western) made that point previously in relation to other security challenges, and it applies with knobs on to tackling the challenge of climate breakdown. Twenty years ago, Professor Nick Stern set out clearly that the costs of inaction far outweigh—many times over—the costs of action to address these risks. After 20 years of our heads collectively being in the sand as a country, we are reaping the whirlwind of that inaction.
I call on the Government and the Cabinet Office to recognise the reality that tackling climate resilience must be a central plank of any strategy to protect national security and resilience. We need a Minister in the Cabinet Office whose responsibility it is to put in place that work and to take a cross-Government approach. This is not a siloed issue and cannot be dealt with in one single Department; it needs a cross-Government approach.
We need a comprehensive strategy to prepare the NHS for new public health challenges. We need to invest in flood protection, because we face not just extreme heat but flooding incidents of increasing frequency and severity. We have all seen what a disastrous effect that has on the economy as well as on lives and livelihoods.
We need to develop a comprehensive extreme heat strategy, a national drought plan and a farmer-led transition to climate-resilient food production. Our farmers are crying out for that support, and they too are on the frontline of the security and resilience challenges that the reality of climate breakdown places on us. We need to strengthen our transport infrastructure, energy infrastructure and water infrastructure. Last week, we heard about nuclear power stations going offline in France. Train companies were saying that nobody should travel unless it was a matter of life and death. Water shortages are becoming more and more frequent. The collective, long-term and strategic approach to tackling climate resilience must be a core plank of national security.
Tackling climate breakdown is not just an environmental issue but a central plank of security and national resilience. The costs of inaction far outweigh the costs of taking action now. Will the Minister commit to putting in place a national strategy? Will there be an individual identified in the Cabinet Office who leads on it? Does she recognise that we must invest now or pay far worse costs later?
Madam Deputy Speaker (Ms Nusrat Ghani)
Mr Brickell, I was not sure if you were going to swap seats again. Are you comfortable where you are?
Phil Brickell
I wish to confine my remarks to the responsible, resilient and transparent use of taxpayers’ money. I say that as the chair of the all-party parliamentary group on anti-corruption and responsible tax, a role which sees me engage with ministerial colleagues from across Government on a whole swathe of issues. I push Government constructively to increase transparency, improve controls and increase enforcement when those who seek to defraud the taxpayer are identified.
Public sector fraud and error is estimated to cost taxpayers between £55 billion and £81 billion annually. That is not sustainable when we are asking taxpayers to shoulder a large burden and when our public finances are already squeezed, at a time of increasingly turbulent geopolitical headwinds. That is why, back in December 2024, I was delighted to see the Government announce the introduction of Tom Hayhoe as the new covid fraud commissioner. He was tasked with identifying areas of reckless spend overseen by the previous Government and going as far as possible in claiming back moneys for the taxpayer.
Since then, Mr Hayhoe has identified £10.9 billion lost to fraud and error across the covid schemes, at a time when the Government’s resilience was pushed to the limit. Let us dwell on that £10.9 billion figure. Of that money, £324 million was lost in personal protective equipment fraud during the pandemic and £1.88 billion was lost in fraud on the bounce back loan scheme, issued by the Department for Business and Trade. We talk about more money for the defence investment plan or increased resilience at a time of increasing geopolitical instability, and those figures of taxpayers’ money lost to fraudsters by the last Government are truly astonishing.
Without straying into ongoing litigation, let us dwell on the PPE Medpro scandal for a second. It has become symbolic of the waste and poor oversight that occurred during some covid-19 procurement processes. As we know, the company was awarded Government contracts worth more than £200 million through the controversial VIP lane system. In 2025, the High Court ruled that PPE Medpro had breached a £122 million contract for surgical gowns, because the products supplied did not meet the required standards, and the company was ordered to repay that money to the Government.
That matters, because holding suppliers accountable when contracts are not fulfilled properly helps to protect public funds and reinforces the principle that those who benefit from Government contracts should meet their obligations. That is a vital premise, because we must ensure that Government procurement is resilient and delivering the best value. Ensuring that those who rip off the state—and, by default, you, Madam Deputy Speaker, me and every other person up and down the length of the country—are held to account is vital.
Alongside our debate on the Cabinet Office’s estimates, will the Minister articulate why the Government announced last week that they had chosen to only “partially accept” four of Tom Hayhoe’s recommendations? The first of those recommendations was that the Government should have a challenge champion in crisis situations—we talk a lot about resilience. The second recommendation was to ensure that small companies publish profit-and-loss accounts—remember that small companies were the engine of the bounce back loan scheme fraud.
The third recommendation was that there should be stronger measures when Ministers issue directions to override the civil service. That is crucial, given that ministerial directions included overriding an accounting officer’s concerns about fraud on bounce back loans. The fourth recommendation was to have clearer central oversight of the spending of the Ministry of Housing, Communities and Local Government through local bodies, including grants. I appreciate that my hon. Friend the Minister may not have the answers to hand, but I would be very grateful if she could write to me after this debate.
Do not let my questions distract from the good work undertaken during this Parliament. I particularly commend the Cabinet Office for the work undertaken by the Public Sector Fraud Authority, including last week’s launch of the new public authorities fraud investigation and enforcement service. I had the benefit of meeting my hon. Friend the Member for Southampton Test (Satvir Kaur) only a few weeks ago to discuss the vital work of the PSFA. We both know how critical it is to drive up transparency, break down information silos, and drive cultural change via the tone from the top across Government. As such, we should be proud that the PSFA has reported savings to the taxpayer of £311 million in 2022-23, £373 million in 2023-24, and over £480 million in 2024-25. That is a trajectory I want to see continue—an increase of approximately 50% over the course of two financial years. In total, the Government reported £7.53 billion of taxpayer savings from counter-fraud activity in the last financial year, including almost £400 million linked to covid fraud that had been recovered. That is vital work that should not go unnoticed, and it is not small change; those are critical funds that need to be retained in the public sector, for the sake of our infrastructure, resilience and security.
The Minister may not be surprised to hear me say that we must not rest on our laurels. I therefore welcome the views of my hon. Friend the Member for Southampton Test on establishing a central Government database to strengthen the detection and prevention of fraud, alongside enhanced mitigation measures and greater transparency in how they are implemented. I also support a new offence of fraud against the public purse, coupled with meaningful incentives and protection for whistleblowers to help identify and expose wrongdoing, as recommended by the campaigning organisation Spotlight on Corruption.
My constituents—whether in Heaton or Horwich, Chew Moor or Chequerbent—need to know that the Government are on their side and that attempted public sector fraud will have consequences, no matter who you are or who you know. It is only by pursuing fraudsters tenaciously that we will be able to find the much-needed resources to support investment in critical infrastructure and ensure that we are as prepared as we can be, whether that is for the next pandemic, climate change, industrial sabotage or conflict.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the Front Benchers. I call the Liberal Democrat spokesperson—are we ready?
Lisa Smart (Hazel Grove) (LD)
Born ready, Madam Deputy Speaker.
Earlier this year, NATO Secretary-General Mark Rutte said that
“we are not at war, but we are certainly not at peace either.”
Just over the two years since this Government took office, there have been many reports of instances of foreign espionage and interference. Earlier this year, it was reported that Chinese spies use LinkedIn and other recruitment platforms to target UK officials and military staff. A tracker was successfully placed on the Prime Minister’s car, and—as has been mentioned by my hon. Friends the Members for Epsom and Ewell (Helen Maguire) and for West Dorset (Edward Morello)—there have been attacks on the Prime Minister’s home and car. Also, people with links to a sitting MP were arrested on suspicion of assisting a foreign intelligence agency. It is therefore no surprise that the Government say that national security is their first responsibility. They are right to do so.
I am lucky enough to be a member of the armed forces parliamentary scheme this year. I have been fortunate enough to meet some of the remarkable people who serve in our military, from the most junior to the most senior, and the key message I have taken from those interactions is that, as a society, we are not scared enough and we are certainly not prepared enough. When talking about preparation, the thoughts of many will instantly go to physical safety and defence spending. I understand why, but there needs to be a whole-of-society approach that goes beyond our armed forces to include national security, resilience, civic preparedness, food security, economic security, cyber-security, energy security and so on. This point has already been raised by other Members, but when the Minister responds shortly, I would be grateful if she could update the House on the Government’s plans to increase the awareness of the British people—including my own Hazel Grove constituents —about the role we must all play to keep our country safe and to prepare should the worst happen.
After looking at the estimates, I have one specific question for the Minister. As I understand it, the security spending under the “Keeping the country safe” subheading is rising largely because the integrated security fund has been moved across to the Cabinet Office, not because Ministers have found new money to meet new dangers. Could the Minister tell the House how much of that uplift is new investment in our resilience, and what changes are happening to that spending as it comes under the Cabinet Office?
We cannot have national resilience if the public can no longer trust the integrity of our democracy. The National Cyber Security Centre dealt with more than 200 attacks on our critical national infrastructure in the past year alone, and around three quarters of those attacks were traced to hostile states, primarily China, Russia and Iran. They reach into hospitals, our energy supply, and the public services that many across the country depend on. That is why the Liberal Democrats tabled an amendment to the Cyber Security and Resilience (Network and Information Systems) Bill that would have required the Government to publish a digital sovereignty strategy. Had it been put in place, that strategy would clearly have set out how the Government would assess, manage and mitigate risks to the security and resilience of critical network and information systems arising from foreign interference and reliance on foreign technology. Additionally, our strategy would place a focus on strengthening Government procurement practices, which would ensure that the Government lay out how they intend to reduce strategic dependencies on foreign-owned service providers and commit to prioritise domestic tech. We would ensure that critical national functions are powered by technology that only the UK Government or UK companies could control.
Perhaps the sharpest threat to our democracy is the money flowing into it from outside. British politics is being targeted by powerful interests beyond our shores who would happily see our democracy weakened, and the loopholes that let them in remain far too open. Opaque, foreign and dark money can still find its way into our political parties, our campaigns and our online conversations, and the Government have not yet done enough to prevent that money from entering our democracy. They commissioned the Rycroft review into political finance, but to date, they have committed to just two of its 17 recommendations. We Liberal Democrats ask that the Minister give serious consideration to the other 15 and commit to all of them in full very soon.
The elections strategy paper published last summer and the Representation of the People Bill are both welcome steps, but there is an Elon Musk-shaped hole running right through the middle of them. They contain nothing to stop social media platforms paying elected representatives to post increasingly divisive and incendiary content, and nothing to shut the back door through which foreign money reaches our politics. Liberal Democrats have tabled amendments to the Representation of the People Bill to fix exactly that. Our amendments would ban payments to MPs by X and other platforms and bar people who have served foreign Administrations from donating to political parties, campaign groups and think-tanks, and we would implement the Rycroft review’s recommendation of banning foreign-funded online political ads altogether.
Given the scale of potential foreign interference, we believe that the Government should go one step further and launch an investigation into US interference in our democracy, including financial support by this White House for those in the UK who—and I quote—share their values. I urge the Minister to further consider how we can best ensure that the Department’s budget is used effectively to limit the reach of foreign interference in our political system, because our democratic security is our national security.
Alicia Kearns (Rutland and Stamford) (Con)
This debate is very timely, and I congratulate the hon. Member for Warwick and Leamington (Matt Western) on securing it. In recent months, the Joint Committee on the National Security Strategy has been joined by an ever-growing and increasingly anxious chorus of voices despairing at the Government’s failings on national security. Lord Robertson, who this Government commissioned and asked to lead the strategic defence review, warned in April that Britain’s security was “in peril” due to the “corrosive complacency” that was being shown towards defence. He went so far as to accuse the Treasury of “vandalism”.
Earlier this month, the right hon. Member for Rawmarsh and Conisbrough (John Healey) resigned as Defence Secretary. He was clear that the reason was a defence investment plan—which, it appears, The Times newspaper has also had sight of—that did not give the armed forces “the resources they need”. He was followed out of the door by the Armed Forces Minister, the hon. Member for Birmingham Selly Oak (Al Carns), who said that the Government’s plans were
“neither transformative enough nor sufficiently funded.”
Given that the hon. Member had served in our armed forces, one would have thought that his warning might have been heeded.
Sir Julian Lewis (New Forest East) (Con)
Bearing in mind an item that has appeared in the news reports today, does my hon. Friend agree that either the right hon. Gentleman or the hon. and gallant Gentleman to whom she has just referred would be a far more suitable future Secretary-General of NATO than the present Prime Minister, whose lack of proper funding of a defence policy—among other deficiencies—has led him to be looking for a new job?
Alicia Kearns
I always found the former Defence Secretary to be very decent in how he engaged, how he worked across parties and how seriously he took the job. I do not think there is a vacancy for the NATO Secretary-General for at least another eight years, but the current Prime Minister, who has taken us from third place to 12th in NATO defence spending in the past couple of years, would not be the right man to lead NATO at this time or any other.
The shadow hanging over this whole state of affairs is the defence investment plan. It was due for publication in autumn 2025, and we have not yet seen it. As a NATO member, we are committed to spending 5% of GDP on defence and national security by 2035, with 3.5% on core defence and 1.5% on national security and resilience. Let us review where the Government are. On rearmament and the progress towards 3.5% and 1.5%, we are second to last—31st out of 32 NATO members. We have only moved to that place in the past year. We best only Iceland, a country that has no armed forces at all. That is where the Government have left us on the road to rearmament. On defence spending as a percentage of GDP, we have gone from third in 2021 to 12th this year. Both those things are on the Labour Government.
The failure of this Government to properly fund our core defence is not just a disaster, but an international humiliation, and the very same pattern is playing out across national security and resilience. Lord Harris, the chair of the National Preparedness Commission, has said that funds for these vital areas are currently being treated as a “creative accountancy exercise”. When we look at the figures before us today, we can see what he means. I recognise the headline increase in the Cabinet Office’s security-focused expenditure, but the vast bulk of that additional £130 million is simply the integrated security fund being moved from the Foreign Office to the Cabinet Office. It is not new money; it is the same money in a different pocket. Meanwhile, the figure that tells the real story is the budget for the national security secretariat, which has been cut to £18.9 million—down from £34.4 million last year. That has nearly halved—at a moment like this.
While little detail has been given to us to scrutinise, it is clear that Cabinet Office spending on national security and resilience is not at the level required, and nor will it match the threats that we face. I will press the Minister on specific areas shortly, but let us check in on whether some past commitments. Have they been fulfilled—or, like the defence investment plan, are they languishing out of sight, underfunded and promised but never delivered?
In February, the former Security Minister, the right hon. Member for Barnsley North (Dan Jarvis), promised a one third increase to the integrated security fund for Indo-Pacific threats: primarily, the Chinese Communist party. There is no sign of that increase. We were promised a £17 million increase in counter-terrorism funding and a further £10 million to address organised crime by the end of 2026-27. Are the Government on track to deliver those things, or have they, too, been quietly forgotten?
I will turn to the specific areas that demand the attention of the House. The first is cyber-security. As we have heard from various Members, 40% of British businesses have suffered a cyber-attack or breach over the past year, including iconic names such as Marks and Spencer, and Jaguar Land Rover. The Government brought forward the Cyber Security and Resilience (Network and Information Systems) Bill, which was welcome, but it was not sufficient. Indeed, it failed to name the threat of the Chinese Communist party. Extraordinarily, it excluded central and local government computer systems from its scope. The very systems that hold our citizens’ data have been left outside the Bill. What investment is being made to bolster our cyber-defences, and is that funding rising?
Secondly, the JCNSS reported last September on the risk of our undersea cables being targeted by hostile states. They carry 99% of our data. They are the arteries of our economy and our daily life. Closer co-operation with Joint Expeditionary Force nations, especially Norway, has been welcomed across this House, but specific plans and any funding remain elusive. These cables carry everything that we do, and there is no plan to protect them. When will funding come forward to do so?
Thirdly, we have discussed the covid pandemic today, and the inquiry that followed, which laid bare the need for a greater focus on biosecurity. The Government promised that it would publish the Cabinet Office’s plan for biological emergencies this spring. That deadline has, like many others, been missed. When will those plans finally appear, and when will the £1 billion promise to establish a network of national biosecurity centres come into being?
Fourthly, on our critical national infrastructure, Putin’s renewed illegal invasion of Ukraine and the brutality that Russia has industrialised should serve as a warning. The Russian military has deliberately targeted power infrastructure—substations, pylons and cables. Drone warfare has made our energy networks a target for terrorists and hostile states. As the Member for Rutland and Stamford, I am dismayed by the Government’s plans to put a string—mile upon mile—of pylons across eastern England. One single drone could plunge huge swathes of our country into darkness, and Google Maps literally provides an online map—a targeting plan for anyone who wishes us harm. We have the capability to lay those cables underground. Instead, the Government have chosen to sacrifice our security to save a few pounds, when we should be learning from Putin’s daily attacks on Ukraine’s infrastructure.
The fifth area—this matters more than any other line, and it has been discussed by every single Member—is whole-of-society resilience. The threats that we discuss cannot be tackled by Government alone, and it would be foolish to suggest so. They demand that each and every one of us is prepared and able to play our part, but the Government therefore have to kick off the national conversation that they promised. Here we must be honest that the failure is not Labour’s alone.
I agree with the chair of the JCNSS, the hon. Member for Warwick and Leamington, that since the Iraq war it has suited the political class to say to the public, “You don’t need to worry about national security or foreign policy—don’t you worry your little heads; we’ve got it under control.” We have taught a generation or two that danger is someone else’s problem, that resilience is a job for the state, and that citizens do not need to think about it at all. We have allowed the public to abdicate their personal responsibility, be that choosing whether or not to be on TikTok—get off it!—the purchases they make or the way they live their lives. That is a fatal arrow in the heart of our national resilience. When the crisis comes—and it will come—a people who have never been asked to prepare will not suddenly know how to be ready.
The Risk Assessment and Risk Planning Committee in the Lords, the JCNSS and the National Preparedness Commission have all called for a single, simple step: the appointment of a chief resilience officer to co-ordinate across Government. It is a sensible suggestion and I am not sure why it has been ignored. That role would look at protecting everything, whether that is our research, our innovation, our education, our universities, our genomics, our charities or the information environment, and it would tackle such things as the use of organised crime, which led to that heinous attack on our Prime Minister. That has been exploited by foreign states, which have misconstrued what took place to harm the Government. That is a shameful state of affairs, and I agree that we should have discussed it more.
I will now turn to China. Before the election, Labour promised to take China to the international courts over the genocide of the Uyghurs, which is an issue that you, Madam Deputy Speaker, and I have spoken about consistently in this place. The Government promised a full audit of China policy to guide strategy across every Department, yet the China audit was never published, its contents have never been shared with this House, and we are now in a situation where the National Security Adviser travels regularly to Beijing to meet Chinese Communist party officials. We only find out about those meetings because the Chinese Communist party publishes press releases. It is more transparent than our own Government, and that is not least because the National Security Adviser will not appear before this Parliament, unlike all his predecessors, to face justice—apologies, to face scrutiny. Well, both actually, because does our country not deserve to know that things are being done right? How can we know that they are being done right, that our country is being protected, and that hostile states are being held to account, if there is no scrutiny?
Our own Government keep quiet while preparing to pay billions to surrender sovereignty over the Chagos islands, and the protections that we put in place are not used. We passed the National Security Act 2023 precisely to counter the threat from hostile states, yet Labour refuses to put China in the enhanced tier, and the results speak for themselves. In July, it will be one year since the foreign interference registration scheme came into force. How many organisations or companies have registered as working for China on the foreign influence risk register? Not one. Three have registered as working for Republika Srpska, a tiny little entity within Bosnia, but no one says they are getting any money from the Chinese state. Have there been any investigations about this failure of anyone to register themselves? No. Have there been any prosecutions? No. Why? It is because the Government are too busy wooing the Chinese Communist party to deter it.
When the Prime Minister went to Beijing, he even met Cai Qi, the very man who had been running a spy network targeting this Parliament. The Prime Minister did not apologise for doing so; he seemed to think it was the right thing to do. Since that case collapsed last year, there have been zero repercussions for the Chinese Communist party for spying on this Parliament. That is not deterrence; it is rewarding a state that attacked our Parliament. Why are this Government content to let our own laws be flouted by Beijing?
Let us be honest about what has been described. A retailer that sells our groceries has been halted by hostile actors. A car maker that employs thousands of our constituents has been brought to its knees. Undersea cables carrying 99% of our data have been shadowed and mapped by Russian vessels. A spy network was run from Beijing against our own Parliament. Our Prime Minister was attacked. Luckily, he and his family were not hurt, but the Government answer all this with a transferring of budgets, missed deadlines and an audit they will not publish.
These are not isolated incidents. We are not at peace, but we may not be in the same state of war as our grandparents would have recognised. There is no declaration, no frontline, no army massing on our borders—thankfully—but make no mistake: we are under sustained, deliberate and co-ordinated attack every single day. Call it what you will, but previous generations understood their duties when the nation was under threat, and they put our country on a war footing. They found the money, told the public the truth, and did not hide behind “creative accountancy”—not my words, but those of an expert. We are 31st out of 32. We have a National Security Secretariat that has been cut in half. There is no resilience officer, no investment plan, and no published audit. That is not the posture of a country that knows it is under attack. So my challenge to the Minister is simple: fund what must be funded, and protect what must be protected.
Given that this is a debate about the money, let me end by asking about what the figures cannot show. Once we strip out the transfers of function and the accounting changes, what is the real-terms trajectory of spending on the security and resilience functions of the Cabinet Office? If it is rising, by how much and how fast is it rising? The first duty of the state is to protect its people, and on the evidence before us today, based purely on the figures, it is a duty in which the Government are failing. History will not forgive those who saw the danger, named it and looked away. We therefore hope that the Government will take away our request and act to fund our defence, fund our national security, and step up and fund our national resilience.
The Minister of State, Cabinet Office (Dame Angela Eagle)
I congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on securing the debate. He will, of course, know the importance to this Government of the topics discussed today. Keeping the country safe is the first responsibility of any Government, and as the world changes, the way we uphold that responsibility must change with it. This adaptability is set out in the national security strategy, published last year at the beginning of the NATO summit in The Hague. Alongside it was the commitment to spend 5% of GDP on national security by 2035—3.5% for core defence spending and 1.5% for broader resilience and security spending.
The Majority of the UK’s hard national security capabilities, such as the recently announced 150,000 drones that the Ministry of Defence will supply to Ukraine by the end of the year, are funded and delivered by line departments. The Cabinet Office’s role is ensuring the effective running of government, and co-ordinating cross-cutting policies and operations. More than 90% of the national security and resilience budget for the Cabinet Office is therefore spent on the day-to-day running costs of the National Security Secretariat. That is a vital body that works with Departments to implement the national security strategy. It develops, leads and delivers policy across Government, and aligns, convenes and brokers the collective efforts of our stakeholders and partners on all aspects of national security. It is the nerve centre of our collective cross-Government security response. However, that spending it is not by any means the vast amount that is spent on national security and resilience across Government.
The Cabinet Office does invest in some assets. For example, the National Situation Centre, which is highly regarded internationally, provides situational awareness for crisis response by bringing together data analysis and expertise. The emergency alerts system is one of many public warning and informing capabilities that the UK Government, devolved Governments and category 1 responders have at their disposal. Since its launch, it has become an integral part of keeping the public safe, allowing the quick sharing of lifesaving information, and it is regularly tested to ensure its resilience. The UK Resilience Academy forms an important part of the skills and engagement offer. It was established in April last year to build the skills that are needed across the whole of society to respond to emergencies.
The national security strategy consolidates various reviews and strategies related to national security into a single, coherent framework. It outlines the strategic context, identifies the main challenges we face as a nation in an era of radical uncertainty, and establishes the framework that the UK uses to guide its actions both at home and abroad. It is both a clear-eyed and a hard-edged plan to deal with the breadth of the challenges that we face, setting out a long-term vision for how we will do three crucial things: protect security at home, promote strength abroad, and increase our sovereign and asymmetric capabilities.
The Government have developed an internal implementation approach to ensure the accountability and delivery of the national security strategy, as well as ensuring that we adapt to a volatile geopolitical landscape. That is why our national security is not the remit of one Department or Minister. We have identified specific objectives, and have assigned lead and assisting Departments to deliver them. Departments are responsible for periodic reporting on progress, and taking action to address any deficiencies.
The Government will continue to update the Joint Committee on the National Security Strategy on progress, through formal public sessions and confidential sessions where appropriate. As part of the implementation of the strategy, we continue to make ourselves a harder target for hostile actors who seek to exploit our open, democratic society. That includes bolstering our cyber and economic security defences, which are essential to the fostering of innovation and growth.
Additionally, we are strengthening the defence of our borders and territorial waters.
In April the former Defence Secretary, the right hon. Member for Rawmarsh and Conisbrough (John Healey), exposed covert Russian undersea activity, paying tribute to the readiness of the UK’s armed forces to respond. In May, Baroness Lloyd, the Parliamentary Under-Secretary of State in the Department for Science, Innovation and Technology, outlined DSIT’s plans to present new legislative proposals to modernise and strengthen penalties for malicious activity impacting our undersea infrastructure.
As I am sure events in recent weeks have made clear, our overriding priority is ensuring stability and security in the Euro-Atlantic area, starting with our unwavering support for Ukraine. In total, the UK has committed up to £25 billion for Ukraine: £16 billion in military support, £5.6 billion in non-military support, and £3.5 billion in UK export finance. We continue to go further, renewing and deepening our key alliances, particularly those with the United States and the European Union. All this work is bolstered by new international partnerships, especially in emerging policy areas such as technology—for example, the UK-India technology security initiative and the UK-Japan frontier technology partnership.
It remains the Government’s intention to publish the defence investment plan before the NATO summit, which will take place on 7 July. The plan will set out much of our future strategy when it comes to how we will protect and defend our country. Let me give Members some idea of its focus. We will rebuild our core defence industrial base, focusing on achieving greater resilience in our stockpiles and supporting warfighting readiness.
Sir Julian Lewis
I am going to ask the rather obvious question. Given that the plan is to be put forward under the existing Prime Minister, does that mean that if the new Prime Minister wishes to change it, it will be changed, or will the commitment that is to be made to the forthcoming NATO Assembly have to stand as it is?
Dame Angela Eagle
As always, the right hon. Gentleman has asked a very important question. I think the key thing to understand is that this work is ongoing, and that there will be co-operation between the current Prime Minister and—I do not want to get ahead of what Labour party members might decide to do—whoever the next Prime Minister will be. I hope that gives the right hon. Gentleman some assurance.
Beyond defence, we will identify, protect and cultivate other sovereign capabilities, such as foundational industries and frontier technologies, that are critical to our industrial base and national competitiveness. I was interested by what my hon. Friend the Member for Warwick and Leamington said in this connection. We are in close contact and collaboration with states such as Canada to learn as much as we can about how they do resilience, although I might gently suggest that the Canadian landmass is slightly different from the UK landmass when it comes to thinking of organising a defence for it, and slightly different approaches will clearly have to be taken, given the geographical realities. However, there is much on which we can co-operate.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The hon. Member has been here throughout the debate.
Mr Snowden
Thank you very much for coming to my assistance, Madam Deputy Speaker—or to my defence, rather ironically.
The Minister has touched on critical industries as a key part of our defence plans for the future. Does she agree that our sovereign capability to manufacture our own fighter aircraft is critical, and does she share my dismay that our production lines sit empty, with no orders from the Government to maintain that sovereign capability?
Dame Angela Eagle
All I will say is that it is important that we rebuild our industrial infrastructure and make sure that we not only maintain but strengthen our sovereign capabilities, not only for now but with forward-looking tech and investment. The Government are determined to do that.
A foundation of our national security is our ability to assess, mitigate, respond to and recover from the risks that we face, should they manifest. These risks could come from anywhere. They could be natural hazards, as we have all been experiencing over the last few days, or they could be deliberate attacks, disease outbreaks or other civil emergencies.
Dame Angela Eagle
I agree, and it is important for the hon. Lady to understand that we are integrating climate change risks into our work. The Department for Environment, Food and Rural Affairs is the leading Department on work on climate adaptation, not mitigation. It is important that lead Departments can focus on the issue at hand, and DEFRA is doing adaptation.
Dr Chowns
One of the key points that I tried to get across in my speech is that this has to be a whole-of-Government effort. DEFRA cannot put in place a strategy to adapt the health service to the reality of climate change. It cannot put in place a strategy to adapt our schools, our transport infrastructure or our energy infrastructure to the reality of climate change. Does the Minister not recognise that this has to be a whole-of-Government effort, and that it is not something that DEFRA can hold? That is precisely why we need a Cabinet Office Minister to lead on climate resilience.
Dame Angela Eagle
The hon. Lady points out that adaptation is a cross-Government, cross-departmental thing. The way that the UK Government are organised means that Departments that are responsible for school buildings or transport deal with the adaptation issues that crop up in those Departments. I do not disagree with the hon. Lady’s analysis, but while the Cabinet Office does have a co-ordinating role, I do not necessarily think that having a Minister co-ordinating it would make an awful lot of difference.
Alicia Kearns
Since as early as 2013, when I was working with the Cabinet Office—specifically with the Joint Intelligence Organisation and others—climate change has been included in the matrix that it is required to plan for, respond to and seek to mitigate from a national security perspective. It is very much reflected in the national —I have forgotten the exact words, but it is the one that does not have an acronym. That is what happens when you work on something for too long. Climate change is in there and has been in there for a very long time, even way back when I was a civil servant.
Dame Angela Eagle
The hon. Lady is correct, and she talks about mitigation. There is also an adaptation issue here, which I was addressing, but clearly the cross-departmental nature of co-ordination happens within the Cabinet Office.
Our country’s resilience is front and centre of our approach to national security. Without security and resilience at home, we cannot deliver economic growth or any of our other missions to improve the lives of the British people.
My hon. Friend the Member for Bolton West (Phil Brickell) gave a good speech about what happens if corruption is allowed to get out of hand and people who defraud the public purse of money are allowed to get away with it. I thank him for asking important questions about Tom Hayhoe’s recommendations. I promise to make inquiries with colleagues in Government, and commit to writing to him about the specific issues that he raised in his speech.
The Government inherited a resilience landscape that had too often been neglected, leaving our nation exposed to the shocks of an increasingly volatile world. The resilience action plan, published last July, sets out the Government’s strategic approach to creating a stronger and more resilient UK, and the steps being taken to deliver it. We face a rapidly changing global risk landscape. From severe weather to geopolitical instability, the risks are complex and numerous. We must be honest with the public about the challenges while demonstrating our resolve to address them head-on, and we have to strike a balance by giving an appropriate warning without panicking people. Building a truly resilient society requires a fundamental cultural shift in the way that emergency preparedness is thought about. That includes being clear about the risks we face and the actions that we can all take to improve collective resilience, as the hon. Member for Hazel Grove (Lisa Smart) said from the Liberal Democrat Front Bench.
In summary, our No. 1 priority is to keep the country safe. The Government are undertaking plenty of work within our own shores to strengthen our stance, which is further bolstered by our unshakeable commitment to Europe-wide security. That responsibility has been spread right across the Government, and it is emblematic of the good work that can come when collaboration is at the heart of planning. Thanks to this work, the risk landscape is not an unknown country; we have made it familiar terrain through rigorous mapping of what could harm us and our citizens, and of what our response should be. It is through level-headed planning that we will create resilience at home and, through that work, create a secure foundation for families, businesses and economies to thrive.
Matt Western
I will keep it brief, as requested. I thank all Members from across the Chamber for making time to contribute to this debate, which underlines the importance and urgency of the challenge that we face in the wider security and resilience landscape. That includes health, energy, water supplies, climate, our economy and our democracy. Even the Electoral Commission has suffered a cyber-attack.
We face so many challenges and threats, and there are states that wish to exploit our weaknesses. That is why this debate is so important. The Backbench Business Committee recognises the number, scale and diversity of the attacks that we are now facing. Members have made points about the Canadian system and spoken about corruption. My hon. Friend the Member for Bolton West (Phil Brickell) talked about financial impropriety, and others spoke of the attacks on the Prime Minister. It is vital that we get our heads around the urgency of this issue, because the attacks that we face are growing exponentially and becoming more and more creative and inventive.
Once again, I thank the Backbench Business Committee for granting this debate, and thank Members for their contributions.
Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).
Northern Ireland Office
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
The debate will be opened by the Chair of the Northern Ireland Affairs Committee.
Tonia Antoniazzi (Gower) (Lab)
I thank the Backbench Business Committee for granting time for this timely debate on the spending of the Northern Ireland Office. As I stand here today, it remains the case that Northern Ireland has no agreed budget, despite it being a quarter of the way through the financial year. Executive Ministers have failed to agree a budget, which has left Departments and civil servants forced to rely on emergency contingency powers, with spending limited to 95% of last year’s opening budget. Most concerningly, this leaves the people of Northern Ireland uncertain about the public services they will be able to access in the coming year.
Although the Finance Minister published a draft multi-year budget in January, it was not supported by the other parties in the Executive and, frustratingly, that deadlock is still unresolved.
Robin Swann (South Antrim) (UUP)
Will the hon. Member also acknowledge that even Members of the Finance Minister’s party are now opposed to the budget he produced?
Tonia Antoniazzi
I recognise that we do find ourselves in a rather ridiculous situation, which impacts directly on the lives of people in Northern Ireland.
This precarious financial situation has serious implications beyond Northern Ireland, and the consequences for the Northern Ireland Office and the Treasury should be of concern to Members across the House. The vast majority of Northern Ireland’s funding comes from the UK Government through the block grant. Executive Ministers have raised concerns about the adequacy of the settlement and are calling for further funding. They cite the current financial year as being particularly challenging for Departments, with the block grant set to drop by 2.7%, before only modest increases in the following years.
We know that the Secretary of State has met the Finance Minister on a number of occasions in recent weeks, and I would be most grateful if he updated us on his discussions with Executive Ministers on urgently finding a resolution to agree a budget, and on the support the Government are providing to enable such a resolution to be found.
Jim Shannon (Strangford) (DUP)
I commend the Chair of the Northern Ireland Affairs Committee for all that she does, but this issue of course goes beyond what she is setting out. The Northern Ireland Office is tasked with co-ordinating the local growth fund across the Province, yet my local community and voluntary sector are expressing deep concerns about its flawed programme design. They say that the funding structure is inaccessible and unresponsive to local realities on the ground. Does the hon. Lady not agree that, when the Secretary of State gets to his feet, he must explain why the Northern Ireland Office has failed to properly engage with our community sector? Does she agree that urgent steps must be taken by his Department to reform this programme to ensure that these vital funds actually reach the groups who need them most?
Tonia Antoniazzi
I thank the hon. Member for his intervention about the local growth fund. In our Committee session today, we grilled the Parliamentary Under-Secretary of State for Northern Ireland, who is sitting on the Front Bench, about this funding. On numerous occasions, we have noted our disappointment that the relevant Department has been able to shift the spending, but I am sure that the Secretary of State will give the hon. Member an explanation later.
Given the potential impact of having no agreed budget on the delivery of public services if the situation continues into the autumn, does the Secretary of State foresee a circumstance in which he would step up and step in to set a budget for Northern Ireland, should the Executive remain unable or unwilling to do so?
Linked to this are concerns about the Executive’s overspending and budget sustainability. At the end of the last financial year, the Government provided the Executive with a £400 million reserve claim loan to cover departmental overspends in health and education. That follows the £559 million Executive debt write-off by the Government in 2024 as part of the financial package accompanying the restoration of power sharing.
The Northern Ireland Fiscal Council warns that overspending is now becoming normalised, and it describes how repeated bail-outs
“could dull the Executive’s incentive to take difficult fiscal decisions”.
Overspending against available budgets by devolved Governments amounts to serious financial mismanagement, according to Treasury policy. Would the Secretary of State describe the Executive’s actions in the same terms?
Sammy Wilson (East Antrim) (DUP)
Does the hon. Member accept that the Northern Ireland Fiscal Council has also said that, if spending allocations to the Executive were based on need, the Executive would be entitled to receive between £1 billion and £3.5 billion extra, which is part of the reason for this problem?
Tonia Antoniazzi
I think there are further discussions to be had about need, the Barnett formula and all those things. I am sure those discussions are happening and that those things are being continually reviewed, but I do agree about the need.
The Executive will repay this £400 million loan over three years—£80 million this year and £160 million next year, with £160 million due in 2028-29. Given the Executive’s track record, are the Government confident that these payments will be met? Northern Ireland Ministers have warned of further overspends, given their continued constrained financial position. The two Departments responsible for the reserve claim are likely to see a drop in their resource funding this year. How will the Government respond to further overspends?
Granting the reserve loan was on the condition that the Treasury conducted an open book exercise on the spending of Northern Ireland Departments. This found that spending per head on policing in Northern Ireland is 166% of what it is in England, spending per head on health, excluding social care, is 152% and spending per head on schools is 140%. On the other hand, spending per head on prisons and probation services is only 79% of that spent in England and Wales. The report presents a number of policy options, and says that the Executive could make savings of up to £3 billion. However, Northern Ireland Ministers contest many of its findings. In his response, will the Secretary of State address the Government’s expectations of the Executive taking forward these options, and tell us what steps the Government are taking to help put Northern Ireland’s finances on a more sustainable footing?
Jim Shannon
I thank the hon. Lady for giving way again. As she will know, one reason for that 152% health spending figure is the level of disability and poverty across Northern Ireland. The 152% figure reflects the actual need on the ground, and meeting that need must be the major goal for the Secretary of State to achieve.
Tonia Antoniazzi
I agree that our Committee has seen that the need is greater, and we are working to represent Northern Ireland and the people who live there as best we can.
My Committee has recently conducted inquiries on policing and security and on legacy, which the Government directly fund. The Police Service of Northern Ireland currently receives £37.8 million a year directly from the Government as additional security funding. This ringfenced funding was introduced in 2011, and until last year it was specifically used to address the threat from Northern Ireland-related terrorism, but this ASF has now been broadened to cover all national security threats. The increase we have seen over the current spending review period may be to cover the broadened remit, but no information is publicly available about how the level of funding is determined by the Government. While we know that publishing some information may not be possible due to security considerations, my Committee has called for greater transparency, and I would be grateful for the Secretary of State’s response to our recommendations.
The recent riots in Northern Ireland are of great concern, and they will be of serious concern to Members across this House. I take this opportunity to commend the PSNI and the emergency services for their response to the disorder. The PSNI was already facing a constrained financial position, so I welcome the additional £4 million provided by the NIO to meet some of the costs it incurred. Could the Secretary of State provide more detail on, and has he had any correspondence about, the funding that I have heard has been provided by the Irish Government for community cohesion following the riots.
Finally, I turn to the issue of legacy and the work of the Independent Commission for Reconciliation and Information Recovery, which I will refer to as the ICRIR. This body was set up under the previous Government’s Northern Ireland Troubles (Legacy and Reconciliation) Act 2023. It is responsible for investigations of legacy cases to provide information to victims, survivors and their families about troubles-related deaths and serious injury. For the present financial year, the ICRIR is receiving £232 million over the whole spending review period. However, Peter May’s recent review of the ICRIR raises some serious concerns about its capacity and governance. According to the review, cases are being paused due to a lack of resource which, in a recent Committee session, the ICRIR disputes. It says that the current funding levels “are not sufficient” to support its view of what is required under the legislation, with
“real concern that they will not have the means to deliver case outcomes within any reasonable timeframe”.
The ICRIR has also seen three finance directors in the past year, with the review describing
“a low level of maturity in terms of its financial and corporate governance.”
The review notes that the ICRIR is submitting to the Treasury a new business case seeking additional funding. Will the Secretary of State update us on the status of that? The Secretary of State told us that confidence in the ICRIR will be gained
“if it provides answers to families who have been looking for them for so long”.
Does he share my fears about the impact that pausing cases will have on victims and families who have already been made to wait decades for answers about their loved ones? Can he also assure the House that confidence in the commission’s financial management and governance arrangements has improved since the review?
Robin Swann
I congratulate the Chair on how she is raising the issue in this debate and how she has handled the legacy inquiry. Does she agree that there must be an answer to the concerns raised by the PSNI that it does not have any additional moneys to provide that information to the ICRIR with regard to legacy? There is also a funding issue there. Both the PSNI and the ICRIR have raised the issue of funding, saying that they are not being given the money to enable them to give the evidence they hold and manage to help the people who are waiting on those cases.
Tonia Antoniazzi
I thank the hon. Member for that contribution. It has been very clear from the Committee’s evidence sessions that, to cover the legacy issues it is still dealing with and will have to deal with, the PSNI is taking resource of time and money that it cannot afford, which impacts on what it can provide on the street, so I too would like to highlight that point.
We want to see a stable Executive, backed up by fair and sustainable public finances, reflecting the needs of the people of Northern Ireland. I am concerned that the Executive’s financial constraint and the funding pressures facing the PSNI and the ICRIR are having a very real impact on people’s lives today.
Jim Allister (North Antrim) (TUV)
In introducing the debate, the hon. Member for Gower (Tonia Antoniazzi), the Chair of the Northern Ireland Affairs Committee, lamented the failure of the Northern Ireland Executive to agree a budget; indeed, for any of the parties in the Northern Ireland Executive to even agree with their own party on a budget. That, clearly, is a difficulty in terms of providing the services for the people of Northern Ireland.
It would do this House well to ask more probing questions on how, not for the first time, the Northern Ireland Executive have failed to agree a budget. Are there political influences at stake? Sinn Féin controls the Department of Finance. Sinn Féin does not even want Northern Ireland to exist, never mind succeed, so is it really any great surprise that when it is in charge of the Department of Finance there is a stand-off about agreeing a budget? For Sinn Féin, the default position is always to blame the Brits, demand more money and turn that into a political campaign on how Northern Ireland is being treated unfairly. Even if it had all the money imaginable, Sinn Féin would not seek to make Northern Ireland work. It cannot make it work and then say, “But none the less, we need the fundamental constitutional change” which is its raison d’être and what it demands. There are at play bigger issues than a mere failure to balance the books.
On balancing the books, many of the parties that form the Northern Ireland Executive bear much responsibility themselves. When devolution was down and coming back at the beginning of 2024, there were parties now in the Executive who had no interest in getting a durable financial settlement. They had such a stampede mindset that they just wanted back into government. They did not support negotiations to enhance what could have been the ongoing sustaining financially of the Northern Ireland Executive. There were others who just wanted back into the Executive for the very sake of power and preferred to lie about what they had achieved in terms of safeguarding the Union. This was an Executive restored on the basis of the biggest lie for generations in Northern Ireland: that the Irish sea border had been removed. It patently has not been removed. There was much that should have been done by the Northern Ireland Executive parties at the time of going back into devolution to extract the financial settlement that was needed.
Now we have reached the situation where overspend is the norm in Northern Ireland. That overspend is built on an expectation that in due course there will be a bail-out. That has been the pattern throughout the years and that is the expectation of this Executive: in due course, there will be a bail-out or a writing-off of the moneys that have been overspent. It has happened before and that is the essence of the demand again. Are the Government going to do that once more? We have had occasions when past Governments have said to the Northern Ireland Executive, “If we’re going to bail you out, you have to transform and do all sorts of things to save money. Maybe you have to raise some money yourself.” None of that has happened. The absence of that engendered a belief that yet again they can produce the begging bowl and have the overspends written off. I look forward to hearing from the Secretary of State how clear he is about whether or not that will yet happen again.
Reference has also been made to policing. Yes, policing is grossly short of funding and it is a scandal that, in my constituency and others, if you can muster together three or four community constables you are doing well for a town and multiple villages. It is a scandal, but it does bring one back to the absolute folly of ever having devolved policing and justice. The Government’s attitude today is, “Policing and justice is devolved, so you find the money.” The allocations are wholly inadequate. If policing and justice had never been devolved, the Secretary of State would have had no escape route in terms of finding the money to give policing to the citizens of Northern Ireland. It was a moment of folly, just over 10 years ago, to devolve policing and justice.
There is a real burden that I wanted to come to, and it is this. The Northern Ireland Office’s promotional website states that the Northern Ireland Office has three priorities, and within the second priority are the wonderful words,
“protecting the UK internal market”.
That, of course, is the one thing that this Government have lamentably failed to do. Instead of protecting the UK internal market, this Government have wrecked it, because we now have an internal market that is partitioned by a full international customs border down the Irish sea, courtesy of the very lies I referred to earlier and the Windsor framework. Far from protecting the UK internal market, the Northern Ireland Office has gleefully presided over the sabotaging of the UK internal market.
In a recent survey, the Federation of Small Businesses found that 38% of GB businesses that used to supply Northern Ireland have stopped supplying it. Why? Because of the unbearable paperwork and burdens that are put on businesses in order for them to trade with Northern Ireland. Far from protecting the UK internal market, we have a UK internal market that has been riven by this Government’s actions.
When we look at the small print in these accounts, we see that the Government are going to give the mighty sum of £2.25 million over three years to a body called Intertrade UK, the purpose of which, as the name suggests, is to promote trade within the United Kingdom—and the Government are giving it £750,000 per annum to do so. Intertrade UK has no staff and no offices—nothing. Let me contrast that with InterTradeIreland: InterTradeIreland exists for the correlative purpose of promoting trade on an all-Ireland basis. It gets £5 million a year of British taxpayers’ money. It also gets southern Government money. It has over 40 staff, plush offices and a real programme of work. Contrast that with Intertrade UK—the Secretary of State thinks it is adequate to give that organisation no staff, no offices and £750,000 a year.
Intertrade UK is seeking to promote trade within an economy of 70 million people, and it gets £750,000 to do it. InterTradeIreland is supposed to be promoting trade on an all-Ireland basis for a population of 7 million, and it gets millions upon millions, 40 members of staff, and more. Where is the logic? Other than the logic of wanting to do down inter-UK trade, where is the logic of being so abundantly miserly with Intertrade UK in comparison to the funds being given to InterTradeIreland? When I read that the Government’s second priority in this area is this idea of “protecting the UK internal market”, I see it as a joke—not just a joke, but a very sick joke—because the very opposite has been done to my part of the United Kingdom.
I use this debate to draw attention to those facts and to say to this Government—more in hope than expectation—that one day they will realise that they are the Government of the United Kingdom, and that means promoting the United Kingdom, not promoting the partitioning of it. It means promoting the growth not of an all-Ireland economy, but of an all-UK economy. Sadly, this Government, deliberately and consciously, are failing in that fundamental mission.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I know this is an interesting debate and topic, but Members would be best to keep speeches 100% within scope.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
I will do my best on that score, Madam Deputy Speaker. I congratulate my hon. Friend the Member for Gower (Tonia Antoniazzi) on securing this important debate.
I want to draw on a consistent message that the Northern Ireland Committee has heard throughout a number of inquiries, whether into public services, the Northern Ireland economy, or police and security: the recurring question about whether the Northern Ireland Executive have been given sufficient funding to deliver the public services that people rightly expect. I know that am looking at that question from an interesting perspective—that of an MP whose constituency is not on the island of Ireland, and who is not directly affected by the day-to-day machinations and interdependence of relationships between the Northern Ireland Office, the Treasury, this place, the Northern Ireland Executive and the Assembly—but as a Scottish MP, I do understand the practical realities of devolution. Week in, week out, I see the impact of different political priorities being pursued by different Governments with the resources available to them. We always say we do not have enough money, but we will never have enough money; we always want more money. And that experience has shaped how I view this debate.
The Committee has considered in depth the evidence of the Northern Ireland Fiscal Council, recognising that Northern Ireland’s unique circumstances means that it requires more funding than a simple Barnett consequential. I keep coming back to the fact that the council again concludes that funding at around 124% of comparable spending in England is appropriate. It is considerably better than sticking a finger in the air and thinking of a number. The spending review reflects that assessment.
The Executive will receive an average of £19.3 billion a year over the spending review period, alongside targeted investment in public service transformation, policing, and city and growth deals. That is not to dismiss the very real pressures on Northern Ireland’s public finances. But funding alone is not enough if public services are unable to plan because the Executive have yet to make the decisions needed to allocate that funding.
Tomorrow is the last day of June—the end of the first quarter of the 2026-27 financial year—and the Northern Ireland Executive still have not agreed a single-year budget, let alone a multi-year one. That matters because budgets are not simply accounting exercises. They allow hospitals to plan, schools to recruit, police services to invest and public services to provide certainty for the people they serve. The consequences of delay are not abstract; they affect real people.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as one of the chairs of the Unison group of Labour MPs and someone who has been a member of Unison for 30 years. Before my time in this place, I lived this issue. When the Assembly collapsed in 2022, health workers in Northern Ireland received no pay increase because there was no functioning Executive able to implement the recommendations of the independent pay review body. The eventual award had to be backdated at the end of the financial year.
The consequences were significant: employers had to take action to ensure that staff were not inadvertently paid below the national minimum wage; payroll teams faced complex manual calculations to recover interim payments once backdated awards were made; and, for many low-paid NHS staff members who were also in receipt of universal credit, it created unnecessary financial uncertainty and administrative complications, because a year’s backdated money in one pay packet is not an indicator of regular income. It was unfair on staff, inefficient for employers, and, ultimately, patients paid the price when public services could not plan with certainty.
This was not a one-off. It has happened four times in the past five years, regardless of whether or not Stormont has been sitting. I know that the hon. Member for South Antrim (Robin Swann), in his life before this place, did his best to try to get it through, and that is recognised and known. But it is not acceptable. This year, the “Agenda for Change” trade unions have been told that there will be no uplift until a budget has been agreed. That means that, once again, there have been manual calculations to ensure that people are not being paid below the national minimum wage. We need to do more about that.
Northern Ireland does receive funding above its independently assessed level of need. There have been levels of growth deals—defence growth deals, and city and growth deals, with the need to invest in apprenticeships —so the opportunity is there. The question is not simply about whether there is enough money; it is about whether the decisions are being taken to use that money effectively.
The priority must be for the Executive to agree a budget —preferably a multi-year one—to give public services the certainty they need. Long-term planning ensures that significant investment delivers tangible improvements for the people of Northern Ireland. I therefore ask the Minister what further discussions he is having with the Executive to encourage agreement on a multi-year budget so that this record settlement can be translated into the public services and better outcomes that the people of Northern Ireland deserve, because they deserve nothing less.
Sammy Wilson (East Antrim) (DUP)
I want to start by thanking the Chair of the Northern Ireland Affairs Committee, the hon. Member for Gower (Tonia Antoniazzi), for the work of her Committee and for the diligence she has applied to the job she has taken on. It is deeply appreciated by Members from Northern Ireland that we have a Chairperson who is totally interested in the work that she is doing. I would not always agree with everything that comes out of the Committee, but she has nevertheless shown a desire to try to get things sorted out in Northern Ireland.
First, as has already been emphasised by a number of speakers, we are approaching this debate at a time when —a quarter of the way through the year—we do not actually have a budget in Northern Ireland, and not for the first time. I do not know, as the hon. and learned Member for North Antrim (Jim Allister) has said, whether this is a co-ordinated political plan or an example of the incompetence of Sinn Féin Ministers. If it is a co-ordinated political plan, it is a very stupid one, because not having a budget and not having money allocated to Departments does not just affect the Unionist population in Northern Ireland—it affects everybody. It affects both Sinn Féin voters and Unionist voters. While it may add to Sinn Féin’s argument that Northern Ireland is not a viable state, I nevertheless do not believe that they should be punishing they own constituents to prove that.
We have to look at the context of Northern Ireland. Getting a budget agreed anywhere is always going to be difficult, because there will always be competing priorities and there are always people wanting more. I suspect that the Chancellor has had similar problems and difficulties even in this Parliament, where she is dealing with only one party—there may be a lot of factions within that party, mind you, but it is only one party. It is much more difficult in a four-party coalition where the parties have totally different outlooks and they have to decide how the money is going to be allocated. We have only to look at the current and previous Sinn Féin Ministers, because do not forget: every time a budget has not been agreed in Northern Ireland, Sinn Féin have been in charge of the finances. I think that has happened on three occasions. The latest crisis has been caused because the Minister responsible did not consult with anybody before simply deciding on a budget—did not even consult with his fellow Ministers—and Ministers from his own party are now disagreeing with it.
I have some experience of this process, because I served in that post in the Northern Ireland Assembly for four years. The Conservative party gained power here in Westminster in May the year after I took over, and in June the reserves that we had, which were about 3% of the budget, were taken back by Treasury, and we were then given a 2% reduction, so there was a 5% reduction in the budget for that year. The budget had already been agreed, and it therefore had to be rewritten. It was not easy, but it was possible because there was a willingness to work. We consulted and consulted, compromised and everything else, and we managed to get a three-year budget, even against that background. That is why I do not accept the argument that they cannot get an agreed budget just because there are financial difficulties. I do not accept the excuses.
However, I would point out that Northern Ireland has for many years been underfunded, as has been confirmed by the Northern Ireland Fiscal Council review. I am pleased that our current party leader, my right hon. Friend the Member for Belfast East (Gavin Robinson), was the first person to raise the requirement to have budgets in Northern Ireland determined on need, and not just on the Barnett formula. There has been some success in that, as we now get the 124%. I accept that the Government took that argument on board, although they had not done so until my right hon. Friend persisted in pushing for that at all kinds of levels. However, even with that increase, there is still an historic backlog.
I am not here to simply say, “Give us more money.” I understand that there are fiscal restraints right across the United Kingdom. However, where a fiscal deficit has been identified, I think it is incumbent on the Government to look at how that can be addressed. I am sure that some people back home will not be very happy with me for saying this, but I think it would be wrong simply to say, “The Fiscal Council has identified between £1 billion and £3.5 billion, depending on whether you compare it with Scotland or Wales, so there’s the money.” If additional money is to be given, it should of course be allocated on the basis that something is given back in return.
Many people will say that interferes with the devolution settlement, because it means telling people how to spend the money. But I think it should be conditional: if people are looking for additional money, let us see how they are going to use it—to reform public services, to cut expenditure in the longer run, to make services more efficient. The money is given on that condition, and those conditions are measured, and the money is released on that basis. That would be one way out of the current difficulties facing the Executive.
The money would be conditionally given, and it would be given for things that have been promised for some time, I think, but have never been done, either because it was too hard to do them or there was not the money to do them. Reform does require some expenditure up front, even if it is only getting rid of some of the surplus staff or reviewing some of the estate. Looking forward in the estimates, that is one way that the Government should be considering dealing with this particular issue.
Secondly, the Northern Ireland budget is divided between what goes to the Executive—the bulk of it—and the Northern Ireland Office. We have to look at need. Let me just give some examples. On money allocated for agriculture, four times more is spent per head spent in Northern Ireland than in other parts of the United Kingdom, but that is not always reflected in the allocations. That is not because we are giving more generously; it is simply that Northern Ireland has a bigger agricultural industry, and that is reflected in the money that is given. Very often what is happening is that we are simply treated as if we were the rest of the United Kingdom, so we get much less per head, even though the industry is much more important. My hon. Friend the Member for Strangford (Jim Shannon) indicated in his intervention that poverty levels will impact the amount of money spent on health. Hence, the needs-based expenditure is more important than simply the block grant.
There are three things I want to raise about the Northern Ireland Office expenditure. First, there is a 25% uplift in the DEL spending—the departmental expenditure limit. According to the papers we have been given, that is attributed mostly to the additional money required for the Finucane inquiry. I have to say to the Secretary of State that there are people who feel really sore about the way that moneys can be allocated to the investigation of one particular death because Sinn Féin has made it such a big issue, while hundreds of families across Northern Ireland have never had a proper investigation into the death of their loved ones.
Yesterday evening I attended a memorial service for Ulster Defence Regiment victims in Northern Ireland: 192 UDR soldiers were killed during the troubles, and 62 were killed after they had retired or left the UDR, and many of their widows and families have never had any proper investigation into the death of their loved ones. Yet for the Finucane family we have had three Stevens inquiries—I remember those from when I was on the Policing Board. Then there was a review of those inquiries to see if they were adequate—the Cory review—and now we have another bout of the inquiry, with a nearly 25% increase in the budget of the Northern Ireland Office to facilitate that. That is not regarded as fair. When inquiries are driven by the political push of one particular party and the Government’s desire to keep them happy, to me that is first of all a waste of funds and, secondly, unfair.
Secondly, part of the budget has been increased to deal with the ICRIR reports and investigations. As has already been pointed out, while there has been an increase for the ICRIR, there has been no equivalent increase for the police service. The police service reckons that it is costing about £24 million per year to facilitate providing the information, yet no allowance has been made for that. That puts pressure on a budget that is already predicted to be in a deficit of £58 million this year. That means fewer police officers on the ground and so on.
Thirdly, as was pointed out by the hon. and learned Member for North Antrim, one of the roles of the Northern Ireland Office is to promote the internal market. I do not blame the current Government totally from the mess that we are in; they inherited botched negotiations by the previous Government, but little or nothing has been done to remedy that. When the Assembly was going back, negotiations went on and we got a document called “Safeguarding the Union”, which was totally endorsed by the current Government, even though they were then in opposition.
Part of that was about finding ways to promote the internal market. One thing that was recognised was that if there was disruption to trade, we would need to improve the trade routes, and so a ports fund of £10 million was agreed. Yet in a recent letter from the Secretary of State, it was accepted that although extra money was found for the Finucane inquiry and for the ICRIR, no funding has been allocated to the ports fund, which was designed to improve sea routes across the Irish sea and make them more efficient, so that goods could flow in and out of Northern Ireland in a less costly way.
Will the Secretary of State tell us what exactly is the status now of that £10 million commitment? I met with the port authorities in Larne, who were hoping that they would benefit from that funding. It would have meant that they could widen and lengthen the ramps, take in bigger ships and bring down the cost of transport. It would also have opened new routes to GB. The port authorities put in £10 million, expecting—under the promise that was made—that match funding would be made available from the Government.
Other actions have been taken by the Government that have made the routes more difficult, including the imposition of the carbon tax on shipping. That will be implemented from 1 July, and it is estimated to increase the cost of bringing goods across the Irish sea from GB to Northern Ireland, or vice versa, by around 7%. That, again, makes the route and the bringing of goods in from GB less competitive, on top of all the other reasons why companies do not want to sell to Northern Ireland now anyway—namely, the additional paperwork.
In conclusion, I just say to the Secretary of State that, yes, we do have a budget crisis in Northern Ireland, but I believe that there could be some inventiveness from the Government. My colleague Gordon Lyons, who is the Communities Minister, has suggested to the Treasury that he will lean hard to get efficiencies and savings from fraud in the benefits budget. But he has asked in return that some of those benefits be shared with Northern Ireland. Sinn Féin, which does not seem to wish to attack fraud, has been holding that up, but will the Secretary of State push with the Treasury the case for those savings from fraud that might be identified in Northern Ireland to be shared with the Executive to help reduce its financial pressures? Will he commit to working with Ministers to ensure that any additional funding is used in a productive way so that Northern Ireland can become much more sustainable fiscally than it is at present?
None of us wants to be here. Certainly as a Unionist, I do not want to be here with a begging bowl year after year, but I believe that there is a responsibility on both sides: the Government must recognise that there is a deficit that needs to be dealt with, and that deficit must dealt with in a way that makes positive changes for the future.
Jen Craft (Thurrock) (Lab)
Many Members across the House have spoken about the financial situation in Northern Ireland. My hon. Friend the Member for Gower (Tonia Antoniazzi) spoke very well about the impact that it has on the lives of people in Northern Ireland.
I would like to touch briefly on the impact that it is having on a particular group of vulnerable individuals, and I declare an interest at this point as the chair of the all-party parliamentary group on learning disability. That group of individuals is the people who had the misfortune to be housed at Muckamore Abbey hospital. An inquiry into two decades of systemic abuse concluded two weeks ago and published its report. Some of the findings were absolutely horrific.
The report found that mistreatment became a normality and that patients suffered black eyes, broken bones and severe neglect. These were patients who had learning disabilities and mental health issues. They were some of the most vulnerable people in our society—quite often non-verbal and unable to raise concerns about their treatment themselves. They were subjected to neglect, poor care and a wider diminution of their rights. Many had their lives made miserable by systematic bullying by certain members of staff.
The report raised serious concerns about the attitude of the trust towards patients and the abuse being reported. There was evidence of patients not being washed, with faeces under their fingernails or on their clothes, becoming obese or losing weight dramatically, owing to a lack of care over diet, and other patients were over-medicated and described as being “zombified”. Parents have described seeing their adult children basically disappearing before their eyes in a locked institution that they were unable to access.
The mistreatment of people with learning disabilities on locked mental health wards is unfortunately not contained to Northern Ireland, but this discussion about the estimates given to the Northern Ireland Executive presents an opportunity for Northern Ireland to lead the way. The report spoke of the need for a transformation in social care in Northern Ireland so that people with learning disabilities and mental health issues are treated in the community in a way that is compassionate and sees them as individuals. Given the £185 million set aside for public service transformation, does the Secretary of State share my hope that those who have suffered at Muckamore Abbey hospital, their families and their loved ones might see a transformation undertaken as a result of the report so that people in Northern Ireland, and indeed across the UK, do not have to suffer similarly?
Madam Deputy Speaker (Caroline Nokes)
We come to the Front-Bench contributions. I call the Liberal Democrat spokesperson.
Mr Paul Kohler (Wimbledon) (LD)
The 2026-27 main estimate for the Northern Ireland Office asks the House to approve spending plans for this politically sensitive region of the United Kingdom. In cash terms, the 2026-27 block grant has barely increased from 2025-26 levels. As the Stormont Executive are warning, that will leave a massive deficit and represents a 2.7% decrease in real spending power.
That settlement arrives against a backdrop in which the Executive overspent their budget by £400 million in the last financial year, covered only by a Treasury reserve advance now being repaid in instalments, with £80 million due this year in the first tranche. We have a Government clawing back money, not investing in Northern Ireland’s future.
On policing, the Government have provided an extra £113 million through the PSNI digital security fund. That figure sounds impressive, but it does not begin to address the operational drain that legacy demands place on day-to-day policing. The Chief Constable, Jon Boutcher, has warned that without the PSNI being funded to service the demands of what is planned to become the Legacy Commission, the entire project will fail, yet when he petitions the Secretary of State he is told that policing is a devolved matter, and when he turns to the Executive he is told that legacy costs arose under direct rule and are a matter for Westminster.
The responsibility bounces between the two, but the PSNI ends up footing the bill. The estimates do not contain any resolution to that deadlock. There is no acknowledgement that the legacy burden is a UK Government, not a Stormont, liability. Let us be clear that the Northern Ireland Affairs Committee has twice recommended a dedicated ringfenced funding stream to meet PSNI legacy costs, and it continues to do so in the face of Northern Ireland Office rejections.
On trade, it is worth reminding the House that 56% of people in Northern Ireland voted to remain in the EU. They have been proved correct, as Northern Ireland has borne the consequences of Brexit ever since, with disrupted supply chains and barriers to trade. Of course, the Windsor framework was meant to give Northern Ireland the best of both worlds, with unfettered access to both the UK internal market and the EU single market. The evidence suggests that it has delivered neither.
A Federation of Small Businesses survey found that more than half of businesses trading between Great Britain and Northern Ireland are experiencing real difficulties, with more than a third of UK-wide respondents who moved goods between Great Britain and Northern Ireland having stopped doing so entirely. Just one in seven Northern Ireland businesses say that they benefit from dual market access, which is much less than the 71% figure quoted by the Under-Secretary of State for Northern Ireland at the Northern Ireland Affairs Committee this afternoon, citing a pre-Windsor framework survey. Some two thirds of Northern Ireland-based businesses say that they have no understanding of the framework and have not taken advantage of it.
Implementation of the Windsor framework is a stated Northern Ireland Office priority, yet the only dedicated line of funding for it in the estimate is an £8.5 million reserve fund, and at the Select Committee today we heard that the Northern Ireland business support service—also known as the one-stop shop—will not come on stream until the next financial year at the earliest.
Finally, may I point out that the estimate transfers £35 million from the Home Office for the immigration health surcharge, yet the Home Office has not published data on the number of asylum claims lodged in Northern Ireland? We are being asked to approve spending derived from a population of claimants the Government decline to count.
Northern Ireland has endured too much and waited too long for a Government who match the scale of their ambitions with the substance of their spending. On the evidence of these estimates, it is still waiting.
Alex Burghart (Brentwood and Ongar) (Con)
I will also begin by congratulating the Chair of the Northern Ireland Affairs Committee, the hon. Member for Gower (Tonia Antoniazzi), on making sure that we got this debate. It is clear that without her and the support of her Committee, we would not be discussing this incredibly important issue on the Floor of the House. I repeat the remarks made by the right hon. Member for East Antrim (Sammy Wilson): the Select Committee in this Parliament has been exemplary and given us high quality analysis, which has benefited debate on both sides of the House.
We are here debating the estimate simply because the situation is becoming dire. As was said by the hon. Member for Cumbernauld and Kirkintilloch (Katrina Murray)—I fear that my pronunciation may be slightly out—this is not an abstract matter; it is having a genuine impact on public services today and on the planning of public services for tomorrow. Uncertainty is building and—I am sorry to say this—there is no suggestion that it will be alleviated any time soon. In fact, as the hon. and learned Member for North Antrim (Jim Allister) mentioned, it appears that we are further from agreement now than we were at the start of the year, because there is disagreement within Sinn Féin on the proposals put forward.
That begs an important question for the Government: what will happen next? This is a debate about devolved issues, but I know that the Secretary of State and his officials from the Northern Ireland Office have been in talks with the Executive and their representatives. I very much hope that we will get an update on those talks. We must, however, ask what will happen if no agreement is forthcoming. As was said, we are now a quarter of the way through the financial year and there is no solution in sight. We cannot move to a position where overspend continues to be normalised, and it appears that the Executive are effectively saying, “We can’t solve this problem—we need more money.” That is not sustainable, and it cannot give anyone confidence in devolution as it is now. What is the Government’s plan if the current talks break down and we move into the summer without an agreed budget in Northern Ireland?
I have a number of points to ask the Secretary of State about while I have the opportunity—most significantly, they are about legacy. He may have detected from some of our previous debates that Opposition Members are not in favour of what the Government are doing. That said, we think strongly that if the Government are to press ahead with their plans, given that it is acknowledged that those plans will create an additional burden on public services in Northern Ireland, on the police and on the legacy institutions, the Government should be prepared to meet that financial cost.
It is not enough to say that £250 million is being made available. That £250 million was made available by a Conservative Government some time ago, and since it was granted inflation has probably degraded it to £200 million at most. It is clear that if the Northern Ireland Troubles Bill is passed, it will increase the caseload of the ICRIR—the Legacy Commission, as it will become—but not increase the resources it has at its disposal, and it will increase the caseload that the PSNI is dealing with, but not increase the resources of the PSNI.
The danger is that we will see a bottleneck in the Legacy Commission and very slow processing of cases, and an additional drain on the resources of the PSNI that will take more people away from frontline policing. We know that frontline policing in Northern Ireland has about 1,000 fewer officers than were expected when New Decade, New Approach was signed. That is a clear and present danger that the Northern Ireland Troubles Bill presents to financing in Northern Ireland, and I would be grateful if the Secretary of State could explain the Government’s position.
I would also be interested to hear whether the Secretary of State has had any discussions with the heir presumptive to the Labour party leadership on the future of the troubles Bill, because the legislative timetable has obviously been pushed to the right again and it seems unlikely that we will have the legislation before the summer break. That being so, it will be a consideration for the next Prime Minister. Can the Secretary of State tell us what conversations he has had with the right hon. Member for Makerfield (Andy Burnham) about this legislation, and whether the next Prime Minister, if that is what he is, is in favour of it?
In the negotiations that any Government have with the Executive in Northern Ireland, I believe there is a duty to make the case that the Northern Ireland Executive should be prepared to raise revenue on top of the budget settlements that the Treasury gives. After the last Budget, I was prepared to say that I thought the Northern Ireland Office had acquired a reasonably good settlement from the Treasury for Northern Ireland. The key now is that that money should be well spent. If the Northern Ireland Executive want to spend more, they should be prepared to raise revenue, but they should also be prepared to deliver their public services more efficiently and effectively. I hope that His Majesty’s Government will work with the institutions in Northern Ireland to help that to happen.
The Secretary of State for Northern Ireland (Hilary Benn)
I join others in congratulating the Chair of the Select Committee, my hon. Friend the Member for Gower (Tonia Antoniazzi), on having secured this extremely important, timely and useful estimates debate and on the work she does to scrutinise what happens in Northern Ireland and the work of the Northern Ireland Office. The Committee is exceedingly energetic and will be getting full value for money from the small ministerial team, as it did today and will do over the next couple of weeks.
I shall begin by addressing the most important question that has been highlighted, to which the hon. Member for Brentwood and Ongar (Alex Burghart) just referred: the lack of an agreed budget. He has just reminded us that he thought the spending review was a pretty good settlement. The Chancellor set out that Northern Ireland would receive £19.3 billion per year on average over the course of the spending review period—the largest settlement since devolution in 1998. In addition, the Chancellor confirmed that the Government would be providing almost £750 million in additional funding through the Barnett formula over the spending review period as a result of decisions made at the autumn Budget and the spring statement. That includes an extra £373 million in the current financial year, 2026-27, and that money is available to the Executive.
To pick up on one point, I am aware of the arguments about the funding in comparison to Scotland and Wales. I simply want to make the point that funding settlements for all the nations of the United Kingdom are underpinned by the Barnett formula, and it is important to remember that, for example, compared with Wales, Northern Ireland has benefited from generous funding from the Barnett formula in previous years. The UK Government—the last Government and this one—have also committed around £16 billion in funding packages and agreed financial flexibilities from 2014-15 right up to 2029-30 for the Executive to support public services and long-term investment. The Treasury has given a commitment to discuss a fiscal framework for Northern Ireland, where, of course, funding under the Barnett formula can be discussed.
On the level of need, the fact is that this was independently assessed by the Northern Ireland Fiscal Council. The figure that it came up with was 124%, and that is indeed the level of funding that the Northern Ireland Executive are getting. My hon. Friend the Member for Cumbernauld and Kirkintilloch (Katrina Murray) recognises that fact. She rightly points out that, however much money is allocated, someone will always say, “Give us more.” How the money is spent has also been an important part of this debate, and I shall come to the remarks of the former Finance Minister, the right hon. Member for East Antrim (Sammy Wilson), in a moment.
Let us look at what is achieved in Northern Ireland for the expenditure, with 124% of the funding in England. In England, about 4% of people are waiting more than a year to see a hospital consultant. In Northern Ireland, it is nearly 50%, with more funding.
Robin Swann
The right hon. Gentleman will acknowledge that, as there has not been a repetitive budget since 2016, any transformation or investment in health is always more challenging, and that is where the waiting lists are. Does he also acknowledge that that transformation funding is now there, and that the work being done by my party colleague, the present Minister of Health, Mike Nesbitt, is bringing those waiting lists down?
Hilary Benn
I absolutely acknowledge the work that Mike Nesbitt has been doing in health, and it shows what can be achieved if minds are put to it. It is a difficult balance between, on the one hand, running the services today and keeping them going and, on the other hand, investing in transformation. In the end, however, investing in the transformation is the way in which we will be able to deliver better public services for the people of Northern Ireland.
I share the concern that has been expressed right across the House at the absence of an agreed multi-year budget, which is creating, above all, significant uncertainty for the funding of public services. I have been talking regularly with the Minister for Finance, who clearly faces a huge challenge in trying to get an agreement, and those conversations will continue this week, because we need to get to a multi-year budget as quickly as possible. I said about a month ago that the Executive needed to come towards the Government and meet us halfway, and there are two essential requirements.
The first relates to the fact that the amount of money currently being forecast as the overspend for this year is going up, beyond the level that we saw in the last financial year. The word “pressures” is heard frequently in Northern Ireland. People say that they have budget pressures. Well, everyone has budget pressures. Quite reasonably, the Government have asked what the nature of those pressures is. Are they absolutely unavoidable legal commitments, are they things we would like to do or are they things in between? Trying to interrogate and understand the nature of those pressures and to see what the Executive tell the Government about that is the first requirement.
The second requirement is a plan for how we will move from this year-to-year crisis—which was very clearly articulated by the right hon. Member for East Antrim in his contribution—because we need to see something that will address this in the longer term. I am much struck by what the Northern Ireland Fiscal Council said in its report on the sustainability of the finances, published on 16 June. It said that
“these immediate issues facing NI’s public finances reflect an unsustainable trajectory resulting from the underlying structural problems in the Budget. These structural issues are visible in the relatively high public sector pay bill, limited revenue-raising”—
a point just referred to—
“and persistent overspends.”
Whatever the size of the budget that anyone has, we have, in the end, a responsibility to find a way of living within that and to raise more revenue if that is open to us. That is what all Governments must do. The current Government have done it in relation to the public finances, and the same is true for the Northern Ireland Executive. In addition to the funding I have already described, there is the £617 million from the UK Government that is going into the city and growth deals, as well as the defence growth deal, which the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Wirral West (Matthew Patrick), has spoken about in the House; the enhanced investment zone; and the local growth fund.
A point was raised about the local growth fund. I recognise and accept that the change in the profile from revenue to capital has created a difficulty for the voluntary sector. That is why I met representatives of the voluntary sector and said to them, “There is unspent money in the PEACEPLUS programme; you can make a bid to that.” I think about £12 million is available in revenue. The Exec came to the Government and said, “We would like to keep £3 million of that for Go Succeed; we think it is a great programme, and we’d like you to carry on backing it.” We said, “Fine.” That left £9 million available in revenue for the economic inactivity programmes that the voluntary sector has been running. I said to the Executive, “How about putting the extra Barnett consequentials that you now have, including £373 million in the current year that you were not expecting, together with the £9 million? We could then enable those projects to continue.” That is an example of what can be done if we put our minds to it.
The extra capital allocation in the local growth fund may in part be the answer to the question asked about the ports fund. A number of commitments were made in the “Safeguarding the Union” document. I remember a large commitment that Casement Park would be fully funded so that the Euros could be hosted. Well, no money was allocated for it at all. The previous Government were very free with the promises, but they did not do the work to find the money. No funding has been identified for the ports fund, but there is money in the local growth fund. I also point out that Belfast harbour has a masterplan, which I understand it is looking to self-fund, and that the Government have made available an increase in capital funding to the Northern Ireland Executive. If the Executive wish to put money into port infrastructure, they are entirely able to do so.
Let me turn to PSNI funding. I once again pay tribute to the officers of the PSNI who, every time there is disorder in Northern Ireland, show extraordinary courage in protecting the public from those who are setting fire to buses, throwing bricks and burning people out of their houses. I had the chance to thank some of those officers when I returned to Northern Ireland the week before last, following the disorder. They are very brave. From memory, I think some 42 officers were injured in the recent disorder.
I appreciate the financial pressures faced, but this is a devolved matter. The hon. and learned Member for North Antrim said that he thought it was a profound mistake to have devolved responsibility for policing and justice. I respectfully disagree with him. The trouble with the call for ringfencing, which we have heard from other sources this evening, is this: we either believe in devolved Government—the elected representatives of the people of Northern Ireland taking decisions about how the money is spent—or begin to move back towards a ringfence; once we have a ringfence for the PSNI, it will not be long before someone says, “Can I have a ringfence over here?” In the end, we have a choice to make. I believe in devolved Government in Northern Ireland, and the Government believe in devolved Government in Northern Ireland. There is a matter of principle here: the funding is available to the Executive; it is for them to decide how much they allocate to policing as opposed to other priorities.
Sammy Wilson
I accept the argument that the Secretary of State is making. I served on the Northern Ireland Policing Board during the change from the Royal Ulster Constabulary to the PSNI, and was on the finance committee of the board. We had continual battles with the then Secretary of State, who was no more generous or flexible than a devolved Minister would have been. Devolution or no devolution, the fiscal and the financial situation is the same. I suppose the difference is that, when it comes to putting on pressure, the Secretary of State here is perhaps a bit more remote than the Justice Minister in Northern Ireland.
Hilary Benn
I will reflect on that point. I do not know in what sense the right hon. Gentleman uses “remote”; if it is geographical, I agree with him entirely. I acknowledge that, as he said from experience, agreeing a budget is difficult in a power-sharing system. It is difficult. He told the House an interesting story about being faced with reductions in budget and it being possible to come together and agree one. All Governments have to deal with the financial and fiscal circumstances they find, but when we take office, we have a responsibility to fulfil the tasks that are in front of us, which include balancing the budget. He also made interesting points about conditionality. How do we ensure, in return for whatever support a Government give—we have seen a long history of lumps and bumps of money, restoration after collapse, and so on—a consistent, measurable path to balanced budgets year after year, and an end to boom and bust in times of crisis?
We have increased the additional security funding, which, from memory, I think was flat for about 10 years under the previous Government. This Government came in and decided to increase the additional security funding. The point has been raised in the Select Committee about the comparison with the counter-terrorism policing grant that is available in England and Wales. However, if we divide the grant by the population, we get £19.42 per head of funding; if we divide the additional security funding for Northern Ireland by the population of Northern Ireland, we get £19.61 per head. When people ask why Northern Ireland is not eligible for the counter-terrorism grant, the answer is that it is getting the same funding per head from the additional security funding. It is for the Chief Constable to decide how best to use that money.
Let me turn to legacy funding. The hon. Member for Brentwood and Ongar, speaking for the Opposition, is right that the sum was identified some time ago. It is actually £232 million, because £18 million of the £250 million has been set aside for part 4 of the legacy Act. In addition, the framework agreement, to be given effect by the troubles Bill, will enable the Irish Government to commit a further €25 million for legacy mechanisms. We are talking regularly to the ICRIR and the Treasury on a business case, but I say to the hon. Gentleman that the caseload faced by the legacy commission is entirely the product of the piece of legislation that the previous Government passed.
Hilary Benn
Well, it is entirely the result of that. The funding that was made available was the fixed sum to which I referred a moment ago. That is the first point.
Secondly, the Department of Justice had put aside a sum of around, from memory, £50 million when the inquests five-year plan was put in place. It thought it would have 50 cases. A number of those, of course, are now not going ahead, and the troubles Bill proposes to restore nine and to sift the rest. Thirdly, prior to the legacy Act’s coming into law, the PSNI had about 1,000 cases to investigate; had the legacy Act not been passed, it would have continued to have to investigate those and receive requests for disclosure.
The final point I would make on this issue—and I did make this point to the Select Committee when I was asked about it—is that we are looking in particular at schedule 4 to the Bill because Jon Boutcher makes the point that if there is a requirement to sift all the material to identify that which is of high security before handing over the files, that puts an obligation in place. We are looking at what we can do to ease some of the cost burdens, as hon. Members have said, as more people come to the Legacy Commission—and I hope more people will come forward.
I will turn now to a couple of other points.
Alex Burghart
I am pleased that the Government are looking at some sort of additional support for PSNI. I sense that the Secretary of State is about to move off legacy. I did ask him whether he had discussed the Northern Ireland Troubles Bill with the right hon. Member for Makerfield (Andy Burnham) because, obviously, his view of the Bill will be critical for its future.
Hilary Benn
The hon. Gentleman invites me to speculate on discussions I may or may not have had, and I will kindly resist the request that he has just made for reasons that I am sure will have been obvious to him when he wrote that question into his speech.
The hon. and learned Member for North Antrim (Jim Allister) and I have discussed the internal market many times before. He talks about the firms that have stopped shipping stuff to Northern Ireland. He will find many, many firms that have stopped shipping stuff to Europe for exactly the same reason: the decision to leave the European Union. It is from that that all the consequences have flowed.
Hilary Benn
The hon. and learned Member shakes his head. With respect, I am afraid that it is a self-evident fact.
Sammy Wilson
Would the right hon. Member accept that international trade is much different than trade within the country that we belong to? If the impediments are stopping trade within our own country, of course that is much more serious than companies deciding that they are not going to sell to countries abroad.
Hilary Benn
I would indeed accept that point, if it was not for the fact that a decision had been made to leave the European Union when there is an open border between Northern Ireland and the Republic of Ireland. That was the fundamental problem that had to be solved, and none of the alternative suggestions would enable us to do this.
I want to respond to my hon. Friend the Member for Thurrock (Jen Craft) about the Muckamore hospital report. I think that every single Member of the House was deeply shocked by what we read in that report, and our hearts go out to all those who have been affected by the mistreatment that has been revealed. I think the answer to the very reasonable question that she put is that we all hope to see all the many recommendations in that report implemented.
Hilary Benn
I think the hon. Gentleman was responsible for establishing the inquiry, and I pay credit to him for doing so. The real way to honour those who have suffered is to ensure that the recommendations of the report are fully implemented.
Robin Swann
I thank the hon. Member for Thurrock (Jen Craft) for raising the matter. I was the Minister who commissioned the inquiry, and listening to the families and the individuals who were in Muckamore at that time was a harrowing experience. I want to put on the record my thanks to Tom Kark KC, who chaired the inquiry, for handling the inquiry and bringing forward the recommendations in an engaging and compassionate way. The health service, the trusts and the entire health family in Northern Ireland need to pay careful tribute to a number of those recommendations, and the hon. Lady made a good point that they contain learnings for health bodies, trusts and Departments across the United Kingdom.
Hilary Benn
I congratulate the hon. Member on having established the inquiry, because when things go catastrophically wrong, it is what we do about it that counts, and that requires an independent look and for the truth to be told.
In conclusion, it is of course for the Executive to agree a budget—above all, for the citizens they serve. That is the fundamental principle of devolved government in Northern Ireland. I repeat what I said earlier: both myself and the Chief Secretary to the Treasury are ready and willing to try to assist the Executive in doing that, but we need to see the things that I described earlier to be able to do so.
Tonia Antoniazzi
I thank the Secretary of State and the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Wirral West (Matthew Patrick), for their positive engagement with the Committee. We understand the challenges the Secretary of State faces, but we hope to provide the correct amount of scrutiny to get Northern Ireland into a better place financially. Many thanks to the shadow Secretary of State, the hon. Member for Brentwood and Ongar (Alex Burghart), and also to the right hon. Member for East Antrim (Sammy Wilson) for his kind words. I also pay tribute to my hon. Friend the Member for Thurrock (Jen Craft) for talking about the very difficult reading that is the Muckamore Abbey hospital review. I want everybody to be able to see that across this House, we care for everybody wherever they live, but especially in Northern Ireland.
Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).
Home Office and Ministry of Justice
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
The debate will be opened by the Chair of the Public Accounts Committee.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
I thank the Backbench Business Committee, Mr Speaker, and yourself, Madam Deputy Speaker, for granting the debate, and the Minister for being here—I hope she will find it useful.
We often speak in this Chamber about defence spending, and rightly so. Defence keeps our nation safe, but justice is what keeps the public safe, ensuring that victims receive justice and that offenders are removed from our streets. According to the National Audit Office, the Ministry of Justice’s total expenditure for 2024-25 was £15.5 billion, with an income of £1.9 billion, resulting in a net cost to the taxpayer of £13.6 billion. To put that into perspective, it is the equivalent of just two weeks of welfare spending.
When I refer to one justice system, I mean the police, the courts, prison officers and the Probation Service working together as a single interdependent system. When one part underperforms, it creates a domino effect across the entire system. Since the beginning of this parliamentary term, the Public Accounts Committee has published a number of critical reports on the criminal justice system, covering Crown courts, police productivity, probation efficiency, violence against women and girls, MOJ reports and prison estate capacity. These are not separate issues; they are interconnected pressures within one system, and they must be analysed, funded and reformed accordingly, not in isolation. I suggest that the PAC is a very useful Committee for considering these types of cross-cutting issues.
It is clear that the criminal justice system has considerable weaknesses. A central issue is the lack of usable integrated data. The police, courts and prisons operate on separate systems that do not effectively communicate with one another. This fragmentation makes it difficult for the system to function efficiently as a whole and increases the risk of serious administrative errors. That is reflected in the number of erroneous prisoner releases. In the last 12 months to March 2025, 262 prisoners were mistakenly released—an increase of 128% compared with the previous years.
Let me turn first to the estimates themselves—after all, that is what the debate is about. It is striking that even identifying a clear, unified figure for the system is difficult because of the fragmented way in which the funding is structured and assessed. The House of Commons Library has confirmed that the Ministry of Justice 2026-27 main estimate for resource departmental expenditure limit—running expenditure—is £12.69 billion, and capital departmental expenditure limit is confirmed at £2.36 billion. That represents a 4.4% and 2.6% increase compared with last year respectively. By contrast, the Home Office main estimate for RDEL for 2026-27 was £19.5% billion, representing a 10.8% increase on last year.
The Prime Minister has said that governing this country is about choices, so the question is: are these the right choices? Although the Government have committed to increasing the Ministry of Justice budget by more than 2% per year, the Department faces mounting pressures, as the Minister will know. Half its running costs are spent on staff, and it has experienced rising demand, inflationary pressures, and higher than expected costs. It has responded by transferring £695 million from underspent capital budgets into day-to-day expenditure, largely due to delays in the prison expansion programme. At the same time, it has committed to delivering at least 5% in savings, reducing administrative costs by 15% by 2029-30, and introducing AI to drive efficiencies. Those are all good things, but they do put pressure on the current budget. These ambitious targets must not come at the expense of frontline services, and they must come with the data to back up the ambition.
Let me turn to some of the issues in more detail. Police officers are on the frontline, and too often they face criticism without proper recognition for the vital work they do to keep our communities up and down the country safe. Although their funding has increased, with a £535.8 million uplift in 2026-27, forces are dealing with the growing complexity of crime, sustained financial pressure and persistent productivity challenges. In Gloucestershire, the Government are not delivering sufficient funding through the police grant to invest in any new digital IT, which would enable the police to be more efficient, and such pressures inevitably feed into the courts, which are already under severe strain.
The rising population in this country is bound to mean that more people will be going through our court system. Around 4 million new cases are now entering our courts and tribunals each year in England and Wales, and the average time to resolve a case has risen dramatically, from 481 days to 685. The backlog in the criminal courts remains exceptionally high, with an unprecedented 88,200 Crown court cases open as of December 2025—it might have come down a little since then. The median time from an offence being committed to the case being completed is 355 days, with some rape and other serious sexual offences—the so-called RASSO cases—taking three years or more, and some being postponed up to six times. Many victims simply give up before their cases come to court in order to try to put the trauma they have suffered behind them.
Is the system any better in the magistrates courts, where there is a backlog in excess of 310,000 cases? Through the Courts and Tribunals Bill, the Government propose to increase magistrates’ sentencing powers to up to 36 months. However, we have a huge problem with the recruitment of magistrates, meaning that the system is likely to be overwhelmed if more cases are diverted to them. It cannot be right that we have empty courtrooms and burgeoning waiting lists. The Government’s changes to legal aid have also led to inefficiency, with more people now representing themselves; I do not blame them at all, but it means that each case takes longer because people often need the court procedure explained to them.
Crown court sitting days have not kept pace with demand, despite offers from the Lady Chief Justice to increase capacity, which have not been taken up fully by the Government. Around 11% of courts are inactive on any given day. Delays of that scale are unacceptable for victims, defendants and public confidence in the system. These delays have the direct impact on the prison population, with more people being held on remand due to the backlog, as well as increased time for preliminary hearings and the granting of bail.
We are also seeing an increase in the number of people received into prison, driven by tougher sentencing and a rising remand population. Currently, between 16,600 and 18,000 people are held on remand in UK prisons, meaning they have been denied bail or are awaiting trial. Many of those people have been on remand for over six months, which is the target for maximum remand. That accounts for nearly 20% of the prison population. The increased flow of untried defendants and extended waiting times due to court backlogs is leading to that unacceptable increase in the prison population. If dealt with more efficiently, it would help with overcrowding in our prisons, but without sufficient capacity or staffing, the trend is unsustainable. The prison population reached a record high of 98% capacity, or 88,000, in August 2024—the highest ever. Overcrowding is driving violence, placing staff at risk, and undermining rehabilitation efforts.
As we know, the Government have committed to creating 20,000 new prison places, yet progress has been slow, with repeated delays and underspending. In a recent accounting officer assessment, there were significant delays in awarding new contracts at both HMP Forest Bank and HMP Rye Hill. The AOA does not set out the cause for those delays or for the additional costs incurred.
At the same time, retention of prison officers remains a serious challenge, affecting safety and stability across the prison estate. To give just one example of what is going on in the prison system, at our hearing on HMP Dartmoor the issue of radon was raised. The Ministry of Justice has signed a lease that cannot be broken until 2033, yet no sooner had that lease been signed, the prison was deemed unsafe because of radon. It is costing £4 million a year for an empty prison. HMP Dartmoor is an example of a Department making a decision under pressure and at speed, leading to a complete waste of public money.
In March 2025, approximately 242,000 individuals were under probation supervision. Vacancy rates in the probation service have risen from 14% in 2021 to 21% in 2025. Staff are routinely working beyond capacity, estimated at 118%, although the figure is likely to be higher, particularly in London. That workload will be increased further with the Government’s early release scheme. We heard deeply concerning evidence describing a culture of emotional strain and trauma among probation staff. This is not just a workforce issue, but a public safety issue, because when probation fails, reoffending rises, placing additional burdens on the police, courts and prisons.
The cost to this country of reoffending alone stands at a staggering £20.9 million, but the human cost to victims and communities is immeasurable. In part that is because our prisons are so overcrowded that prisoners are not being given meaningful activity, for example work training, so that when they are released they have developed skills that could help them to find work and reduce the reoffending rate.
Jim Shannon (Strangford) (DUP)
Does the hon. Gentleman agree that when prisoners are engaged in retraining or rehabilitation, they can then return to the community they were brought up in, but that is often where their problems started? The report might be able to recommend things that can be done in prison, but when people get back to their community, that takes over and they start where they left off. Does he agree that such issues must be sorted out in the location, in the community, and in the place people come from, to ensure that they do not go back to their bad habits?
Sir Geoffrey Clifton-Brown
The hon. Member makes an interesting point, and the Government must consider in the round how they can give people useful training, work and leisure in prison, so that they come out with some skills. Where people go, how they are housed and what employment offers they get are issues that the Government need to consider seriously—it is a really big problem.
The number of recalls to prison is now at an all-time high, demonstrating a system under severe stress. Planned reforms, including early-release schemes, risk placing even greater pressure on an already overstretched probation service. Well-run probation is not optional; it is essential. It is what enables people to reintegrate into society and prevents the cycle of crime from continuing.
In conclusion, the criminal justice system must be treated as one system. The Home Office and the Ministry of Justice need to work much more closely together to resolve some of the serious problems that I have outlined. Investment, reform and accountability must reflect that reality. Fixing one part in isolation will not solve the wider problem. As I have said, democracy is founded on an effective and properly functioning criminal justice system to keep its citizens safe. Serious criminals need to be removed from society by imprisonment, but the system must help itself by taking strenuous steps to reduce reoffending, which I repeat costs this country £20.9 billion a year. It is a well-thumbed maxim that, whatever the cause, justice delayed is justice denied.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
I thank the Backbench Business Committee for granting time for this important debate. The debate follows a joint application by the Chairs of the Justice, Public Accounts and Home Affairs Committees. There is cross-Committee concern for our criminal justice system, as the Chair of the Public Accounts Committee, the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown), has just said. I thank my fellow Chairs for their focus on the issue in its widest sense.
As Chair of the Justice Committee, I will focus my remarks on the estimates for the Ministry of Justice. A year ago, the Justice Committee was granted a similar debate on the spending of the Ministry of Justice. I noted at that point the positive settlement that the MOJ had received as part of the spending review, including a £7 billion investment aimed at delivering 14,000 new prison places by 2031 and £700 million a year for the Probation Service by 2028-29, in the light of the Sentencing Act 2026 reforms. Although I welcome many of the actions that the Government have taken over the past year to reform our criminal justice system, there is still a great deal of progress to be made, as those targets indicate.
The Ministry of Justice suffered years of budget cuts during the years of Tory austerity, meaning that when this Government were elected in 2024, MOJ expenditure was 11% less in real terms than it was in 2010. The main estimates for 2026-27 confirm that the MOJ’s day-to-day spending is set to increase by £757 million, or 6.5%, which includes further investment in the Prison and Probation Service, the Courts and Tribunals Service and the Legal Aid Agency. I will come to each of those areas in turn shortly. The MOJ’s capital spending is also set to increase by almost £60 million, or 2.6%. I note that the MOJ anticipates drawing down further funding at the supplementary estimates to support its prison capacity programme, and that must be right.
This year’s main estimates allocate over half its day-to-day spending to the Prison and Probation Service. This is aimed at investment in staffing, opening of additional prison places and paying for prison contract costs. The prison population stands at over 87,000 and it is predicted to increase, with the most recent set of projections forecasting 91,400 by September 2026, and between 97,400 and 102,100 by September 2029. These are the highest numbers we will ever have seen in UK prisons.
Already, 25% of prisoners live in overcrowded conditions. As we have heard, overcrowding reduces safety, increases the likelihood of self-harm and violence, and impairs the rehabilitative programme that prisons are able to offer. The Justice Committee has focused much of its work over the past year on the endemic drugs crisis in our prisons and the poor rehabilitative offer available for prisoners.
The Government’s continued investment in creating new prison places is necessary, but alongside the provisions of the Sentencing Act, some of which have now come into force, I hope that we can begin to see a stabilisation and eventual reduction of the prison population and an improvement in conditions there. I note that deaths in prison custody decreased by 12% from the previous 12 months up to March this year, but any non-natural death in prison is a tragedy. I direct Members to our reports on drugs in prisons and rehabilitation in prisons, which have been tagged on the Order Paper as relevant documents for this debate.
As I mentioned earlier, by 2028-29, the Probation Service will receive an additional £700 million per year to support reforms resulting from the Sentencing Act, including a significant increase in the use of electronic monitoring or tagging. That investment is a substantial and welcome increase for a service that has been under strain for many years. I have raised repeatedly my concerns about the performance of Serco in its provision of the tagging service, and the Justice Committee will closely monitor Serco’s performance moving forward.
I commend the work of the Public Accounts Committee in looking at the probation service and the report it published in February this year. The PAC report stated that the vacancy rate for probation officers increased from 14% in 2021 to 21% in 2025, with probation officers working above capacity for several years. The system has been running hot for an unsustainable period, which impacts on the hard-working probation staff. That cannot be underplayed and I hope to see improvements in this area soon.
The additional funding for the Courts and Tribunals Service is driven by pay increases and an increase in the uncapped sitting days in the Crown courts, which are necessary to recruit and retain staff and to address the backlog. The Crown court backlog continues to sit at around 80,000 cases. The uncapping of sitting days for 2026-27 is a welcome step and has already had a positive impact, but it is widely recognised that it is not enough on its own.
It is against that backdrop of an ever-increasing backlog that the Government introduced the Courts and Tribunals Bill earlier this year. Among other measures, the Bill would shift more cases to the magistrates courts and reduce the use of jury trials. The Justice Committee recently published an extensive report on the Bill, in which we warned that capacity in magistrates courts is unlikely to expand quickly enough to meet this increased level of demand. Our report highlighted the long-standing reductions in the number of magistrates and legal advisers, and described the recruitment target of having 21,000 magistrates in place by 2029 as unrealistic.
The Courts and Tribunals Bill has been carried over to this Session, but a date for its consideration on Report has not yet been set. I would encourage the incoming Prime Minister—whosoever that may be—to consider carefully the Committee’s critique of the Bill, but also to be conscious that reform is desperately needed and cannot simply be kicked down the road to avoid difficult decisions.
Sir Ashley Fox (Bridgwater) (Con)
I am grateful to the Chair of the Justice Committee for giving way. What contribution to reducing the Crown court backlog does he believe curtailing the right to jury trials will make?
Andy Slaughter
First, one has to look at the Leveson package—the two volumes that Sir Brian Leveson has put together over 1,000 pages. That has 180 recommendations, a very small number of which deal with this issue. It is undeniable that it will be one factor that has an effect. Where I agree with the hon. Gentleman is that it is very difficult to calculate at this stage what effect it will have.
The changes to jury trials—not the abolition of jury trials—are moving the line so that some more cases will be dealt with at a summary level. As I think the hon. Gentleman knows, I prefer to look at the practical problems there may be in replacing some jury trials, with the additional pressures on the magistrates court. As a matter of principle, we can differ; as a matter of practice, I suspect he would agree with me. I ask him to agree with me that there will be some benefit, but I agree that it has not been calculated as yet.
Let me pick up what I was saying. A malfunctioning courts system is bad for victims, bad for defendants and bad for faith in our justice system, which has ramifications for our democracy.
I will conclude by touching on the Legal Aid Agency, which affects civil and criminal legal aid. Legal Aid Agency spending will rise by 10% year on year. That is driven by Government reforms that will result in higher billing in civil representation schemes, fee uplifts in crime lower schemes and additional operating costs. As I said last year, I was surprised to see that the spending review did not include a specific funding allocation for the Legal Aid Agency, with the only reference to it being in the context of potential efficiency savings that the MOJ will make in the review period.
Continuing investment in legal aid is essential to the proper functioning of the criminal justice system and efforts to tackle the Crown court backlog. Access to justice for those who rely on legal aid is reliant on a well-funded and properly functioning Legal Aid Agency, and we are all aware of the difficulties it has had over the past year. The Justice Committee will soon publish a report focused on legal aid as part of a wider access to justice inquiry.
Let me emphasise how important it is that we have a properly functioning criminal justice system if the public are to continue to have faith in our institutions and political system. I implore the incoming Administration not to lose the focus on reforming the criminal justice system. The current system is not fit for purpose, and we cannot afford not to act.
Sir Ashley Fox (Bridgwater) (Con)
The Crown court backlog is the most significant challenge facing the Ministry of Justice. Long delays in cases reaching trial undermine confidence in the whole justice system. I welcome the extra money that the Government have made available to increase the number of sitting days of the Crown court. I also welcome the additional funding to improve the physical condition of our courts and to invest in improved IT systems to make our courts run more efficiently.
While the Government are right to take those steps, I am concerned that they are wasting time, effort and money in curtailing the rights of British citizens to a jury trial. This reform has been presented as a necessary step to improve the efficiency of the courts. However, evidence suggests the contrary. The Government are aware of analysis by criminal justice researchers that indicates that the entire package of Government reforms will save no more than 8% of Crown court time. More striking still, the introduction of judge-only trials is likely to deliver a saving of just 1.5% to 2.5%. That is a marginal efficiency gain compared with the curtailing of our citizens’ rights to a jury trial, and it does not take into account the potential wasted time in determining whether a trial is to be held in a magistrates court or the new Crown court bench division.
I have previously asked the Lord Chancellor to set out the evidence to show how much of the backlog will be cut by his reduction of jury trials, but I have not received a meaningful reply, so I must conclude that he is either unwilling or unable to provide a response. The Labour party has proven of late that it is willing to dispense with the unpopular and the ineffectual, so I hope it will take the same approach to unpopular and ineffectual policy as it does to personnel. I hope that the right hon. Member for Makerfield (Andy Burnham) and his new Lord Chancellor will drop this dreadful policy.
If the Government are serious about reducing delays, perhaps their focus should be on addressing why workers in the Ministry of Justice take more days off sick than workers in any other Whitehall Department. The average MOJ employee took 10.7 days’ sickness in 2024-25; that is 30% higher than the civil service average, and double the average in the private sector. The Minister needs to get her Department in order.
Sarah Russell (Congleton) (Lab)
Does the hon. Member have any figures disaggregating prison officers from the remainder of MOJ staff? Obviously, their working lives are very different.
Sir Ashley Fox
I do not believe that information was provided, certainly not when it was presented to me, but if the hon. Lady has it, no doubt she will send it to me.
Jury trials and staff absence are not the only areas where the Government are focusing on the wrong issue; a similar problem emerges in the management of our prisons. The Government seem to believe that recklessly releasing many thousands of criminals early will address the crisis of overcrowding, instead of investing in measures to ensure that they do not reoffend. I fear that releasing so many criminals so early in their sentences risks a wave of reoffending in the future.
It is well established that when prisoners engage in meaningful educational or vocational courses, there are sizeable reductions in reoffending. More than 50% of adult prisoners have the literacy skills of an 11-year-old or lower; knowing this, one might think that the Government would seek to address the problem. The earned progression model should surely ensure that participation in education and training is compulsory to secure the very early releases that the Government are proposing. Instead, this Government are choosing to reduce the provision of prison education, astonishing though that might seem.
That is of huge concern, because investment in prison education is cost-effective. Research in 2018 showed that the economic benefits of lower reoffending and higher levels of employment after release outweighed the costs of prisoner education by a ratio of 5:1. In this instance, the problem is not that the budget has been cut, but that the cost of supplying that education has risen so significantly that the volume of core education delivered this year will be cut by 20% to 25%. Instead of addressing why those costs have increased or exploring more competitive and flexible commissioning models to incorporate smaller providers, the Government’s response has been to cut provision. That is short-sighted. If the MOJ is so poor at entering into contracts, may I recommend to the Minister that that budget is entirely devolved to prison governors? I believe they would be better at bringing together local businesses to provide the education they need for the prisoners in their care. It would certainly be better than paying Serco, Capita or whoever £100 million a year to deliver less education each year.
Jess Brown-Fuller (Chichester) (LD)
The hon. Gentleman is making an excellent point about the ability of prison governors to spend money. I was speaking to a prison governor recently, who said that because of the amount he is allowed to spend, when the washing machine breaks, he cannot purchase a commercial one. He keeps buying ones from the high street, which naturally break after a week or so because of the level of washing his prison has to do. Does the hon. Gentleman agree that giving prison governors some more flexibility so that they can make decisions for the prisons they know best would actually save the MOJ money in the long run?
Sir Ashley Fox
I thank the hon. Lady for her intervention, and I agree with her. Members of the Justice Committee hear that all the time when we visit prisons. For example, broken security netting cannot be repaired or replaced until some very long and convoluted process goes through Whitehall and comes back six months later, no doubt after many drones have flown in with however many packages of contraband goods. It is absolutely hopeless. We have to devolve proper responsibility and financial management to prison governors. Sitting on the Justice Committee, I have seen and heard at first hand the reality of how reduced educational opportunities are putting rehabilitation at risk, yet despite awareness of these dangers, the Government only partially accepted our formal recommendation to prioritise the delivery of core education provision.
Estimates day debates allow the House to hold the Government to account, not just for how much they spend, but for how well they spend it. Curtailing jury trials for marginal gain and cutting back on prison education are not the reforms of a system focused on long-term effectiveness. If we are serious about delivering timely, fair and sustainable justice, we must prioritise the right kinds of investment that will deliver the reforms the justice system needs to protect victims as its No. 1 priority, to deliver justice and to get good value for money for the taxpayer.
Sarah Russell (Congleton) (Lab)
I thank the Government for the considerable progress that has been made on criminal legal aid and other matters within the estimates since we have taken office. The courts system, as we have heard, was in the most dilapidated and decrepit state, and we had a dearth of judge recruitment between 2010 and 2018. The net result was that the entire justice system was on its knees. In that context, the 10% uplift in legal aid expenditure over two years was long overdue.
I will ask the Minister a couple of questions. There have been significant problems with the Legal Aid Agency’s IT systems. Those problems are increasingly in hand, but it appears from House of Commons Library papers that there is a 75% reduction in capital spend at the Legal Aid Agency over the coming period. It is not clear to me whether that reporting is accurate or perhaps not right, because there is a proposal to spend significant money on the Legal Aid Agency’s IT systems, and I do not see how that would not fit within the capital estimates. It would be helpful if the Minister could report back, either today or to the Justice Committee subsequently, on how that has come about. The disparity seems extremely large.
The entire system is still creaking heavily. In an environment in which we know that there may have to be further cuts to other Departments to fund the defence investment that is required, we must remember that the Ministry of Justice has experienced cuts not just since 2010, but since 1997. Legal aid rates have gone up by £1 an hour since 1997, with the exception of the areas that the Government have put up—it is only some of them—since we took office. The result is that legal aid in general is in hugely difficult circumstances, and we see the net effect of that in the number of people representing themselves in the courts.
I have asked in Justice Committee sittings whether there has been an evaluation of the impact on court backlogs of unrepresented litigants in person. I have asked what assessment has been made of the difference they make to trial times in the criminal and civil courts, and therefore the potential implications for the backlogs in those courts. At the moment, the backlog stands at 350,000 in the magistrates court, and the figure is commonly reported to be 80,000 for the Crown court.
The MOJ has not been able to give us those figures, and it cannot say that that assessment has been done. It is speculative to suggest that people not having a lawyer—and large numbers of them do not—is increasing the courts backlog, because we just do not have the figures. In an environment in which every penny counts, and in which spending that money extremely efficiently is vital, it seems a significant omission not to have at least reviewed whether moving up the criteria for entitlement to legal aid significantly might change the dimensions of the court backlog, as all of us want to see.
The nature of the current entitlement is that someone with a total household income of £37,000 or more in the Crown court—they could be facing trial for rape or all kinds of serious offences—would not be entitled to legal aid. I think most members of the public would be shocked that if they were accused of a crime of that gravity, they would get no legal aid if their household income—potentially from two adults—came to more than that. In 1970, about 28 million people in this country were eligible for legal aid. The figure today would be infinitely smaller.
I completely accept that we cannot simply flood money into a system when we do not have that money and when it would not be responsible. There is also the risk that we create waste if we suddenly flush money into a system not set up to accommodate it. I understand why the Government are taking a staged approach, but I should like us to ensure that we are exploring all the potential ways of reducing the Crown court backlog. At present there are some contentious proposals on the table, some of which I do not support. It is pleasing to note that Andy Burnham—
Madam Deputy Speaker (Caroline Nokes)
Order. The right hon. Member for Makerfield.
Sarah Russell
Many thanks, Madam Deputy Speaker. My right hon. Friend the Member for Makerfield (Andy Burnham) suggested in December that this might be worth looking at again, and many of us in all parts of the House would be grateful for such an approach.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
It is an honour to follow my hon. Friend the Member for Congleton (Sarah Russell), and indeed, to follow all the Members who have contributed to what has been a very thoughtful debate. There seems to be a huge amount of cross-party consensus, indicated by the Chair of the Justice Committee, my hon. Friend the Member for Hammersmith and Chiswick (Andy Slaughter) and my colleague on the Public Accounts Committee, the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown). I commend the hon. Gentleman for the work that he does in championing sound public finances. I also agreed with a great deal of what he said about this being an issue across Government, and about the Public Accounts Committee therefore being well placed to contribute to the discussion and, indeed, the solutions. Failures to address these issues have significant effects, both on the public finances and on the most vulnerable people in society, and, indeed, they are issues that are often reflected in our constituency mailboxes.
I was contacted recently by a young woman who had reported child sexual abuse to the police last year. Owing to repeated delays and cancellations, she has still not had her “achieving best evidence” interview with the police. That is extremely distressing for her, as all can imagine, but I am afraid it is symptomatic of the delays that persist within the criminal justice system, and we know that young victims are significantly more likely to withdraw from the justice process when a case is dragging on. In 2023, more than one in four rape investigations ended because the victims could no longer continue. These long waiting times are a significant factor when it comes to achieving justice, not to mention the cost to the public purse. With that in mind, I am pleased that the Government have already lifted the cap on the number of days on which courts can sit, because it will promote efficiency within the system. We must use our court estate to its full capacity, and we know that that is not happening at present.
Warinder Juss (Wolverhampton West) (Lab)
Not long ago, I had a meeting with a group of barristers at Wolverhampton Crown court. They were grateful to the Government for uncapping the number of hearing days and trial dates, which they said had made a significant difference to the court backlogs, but they also raised the problem of prisoners not arriving in court on time. They felt that dealing with it would make a significant impact on ensuring that cases did proceed. Does my hon. Friend agree that the Government could perhaps take another look at that?
Catherine McKinnell
I entirely agree, and my hon. Friend has anticipated a point that I was going to make. The increased court days are clearly vital to maintaining productivity and the efficiency of the use of court time, although that only works if the court system itself is working. We have seen very good examples of the way in which the additional days are already being used to clear backlogs and reduce the number of outstanding cases. In the English courts, we have seen evidence of the prioritisation of domestic abuse cases involving vulnerable witnesses. This can reduce waiting times, particularly for people involved in those sensitive cases—and yes, that makes a big difference to them individually, but it also makes an impact on our system as a whole.
As my hon. Friend has said, we need a court estate that is fit for purpose in order to maximise the use of these additional days. I too have visited my local court, in this instance Newcastle Crown court. What was obvious, even on the day I was there, was the consequence of some of the malfunctions in the system that make it difficult for court cases to proceed, such as faulty infrastructure, the flooding of parts of the court building, dock alarms or door locks failing to operate. As a result of such problems, staff do not feel safe enough to do their work and maintain the security of the courtroom, and therefore cannot go ahead. Often it is vulnerable victims who bear the brunt of delays and cancelled court hearings.
On the day I was at Newcastle Crown court, I heard about a complainant in a rape case. Her husband was the victim of an assault by the defendant, who had raped his wife. They were forced to wait four hours for the trial to begin. They were eventually told that the defendant would arrive and that the delay to his delivery was causing the delay, but it had a knock-on effect on additional days in court. Such delays ensue right across the system.
Court staff report that, from a structural perspective, many of the issues affecting the court system in Newcastle have been caused by the departure of a full-time maintenance engineer, who was dismissed due to the need to make savings. In the light of the many delays of trials and hearings, that appears to be a false economy, which is why I am pleased that the Government have recognised the challenges to the court estate itself and are making investments. I am also really pleased that the Minister is acting on the huge problem of private contractors delivering defendants to an incorrect court, several hours late or just not at all.
Midway through a trial in Newcastle in April, a defendant left court in custody on a Friday, only to fail to reappear the following Monday, with a jury ready and waiting. It is completely unacceptable, a total waste of taxpayers’ money and hugely offensive to those taking part in trials. I know the Minister is aware of these issues and is keen to establish an oversight body to review the prisoner transfer process from end to end. I will keep a very close eye on that, and I am sure that other Members contributing to this debate will do the same.
Finally, I know that the Government recognise the importance of providing free legal advice, as set out very well by my hon. Friend the Member for Congleton. The Public Accounts Committee has recognised the importance of investing up to £34 million more a year in criminal aid, which is welcome.
I conclude by asking the Minister to join me in recognising both the human and the financial benefit of timely justice, the absolute importance of maintaining our court estate, and the improvements. Where we see good practice happening across our system, it must be shared. I often hear good ideas and wonder why they are not being done elsewhere, and we need to have a system in which good practice is shared and best practice is rolled out for the benefit of justice right across the system.
Jess Brown-Fuller (Chichester) (LD)
It is a pleasure to speak in today’s estimates day debate on criminal justice, and I put on the record my thanks to the three Chairs of the Select Committees that suggested this debate to the Backbench Business Committee: the Chair of the Public Accounts Committee, the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown); the Chair of the Home Affairs Committee, the right hon. Member for Staffordshire Moorlands (Dame Karen Bradley); and the Chair of the Justice Committee, the hon. Member for Hammersmith and Chiswick (Andy Slaughter). I also thank all hon. Members who have stuck it out in the Chamber on a Monday evening, who clearly care about criminal justice.
Politics is all about priorities, and so often the justice system falls a little short. Unless members of the public have had experience of the criminal justice system, have been victims of crime or have a loved one who has had the experience of going through the system, it does not necessarily appear in their top five priorities for the Government, but I thank all those who work to keep the criminal justice system functioning despite the lack of investment, the often crumbling infrastructure and the huge amount of pressure on them to ensure that justice is served.
The system as it stands lets down victims and defendants alike. It fails to rehabilitate offenders, and so many never see the justice that they deserve. The Crown court backlog is clearly unacceptably high, and that opinion is shared across the House. It is the biggest challenge that the justice system faces, as the hon. Member for Bridgwater (Sir Ashley Fox) said in his contribution. Its exponential growth requires urgent action, but the fix does not lie in taking a sledgehammer to jury trials. Jury trials provide a fundamental safeguard of fairness and liberty, and they are not the cause of the backlog.
We on the Liberal Democrat Benches do not fundamentally believe that the Government have successfully made the case that their reforms will reduce the backlog or make any cost saving to the Department. The modelling has still not been made available, and the estimates behind the claimed time savings have been widely questioned. Even accepting the Government’s own estimates, it will take a decade for the backlog to fall below current levels. Indeed, the backlog is currently predicted to continue increasing and to surpass 100,000 cases by the end of next year.
What has been proven to reduce the backlog across the country is the very welcome uncapping of sitting days, and we are pleased that His Majesty’s Courts and Tribunals Service has been allocated a £143.1 million uplift, including the funding for uncapped sitting days. With the previous increases in sitting days that the Government announced in the last round, Crown court backlogs are beginning to fall. The Old Bailey reduced its backlog in 2025. In Chelmsford, it fell by 10%, and Maidstone saw a 5% reduction in its backlog. Across the country, the overall Crown court backlog in the last quarter fell for the first time in three years. So the truth is that proper funding for our courts and open sitting days are bringing down the backlog, and we are yet to see the result of the full uncapping of sitting days, which came into place only in April.
Given the scepticism that the right hon. Member for Makerfield (Andy Burnham) has expressed about jury trial reform, I hope the Government will give serious consideration to changing course. He told BBC Radio Manchester that the Government should
“pause…this and take a step back and have proper consideration”,
as the hon. Member for Congleton (Sarah Russell) mentioned.
On another area of the criminal justice system, we Liberal Democrats have put forward several amendments, such as training for court staff, so that the victim experience is better, because victims often report feeling unsupported or unheard. The Government must do more to continue their journey to ensure that the court system centres victims’ experience. Part of that experience is the processing after a criminal case, and access to court transcripts for victims. I acknowledge that the Government have made steps to improve access, after robust negotiations in both Houses on various Bills since July 2024, most recently the Sentencing Act 2026 and the Victims and Courts Act 2026.
I put on record the exemplary effort made by my hon. Friend the Member for Richmond Park (Sarah Olney), who has been campaigning to ensure that court transcripts are made available for free to victims of crime, after a constituent of hers was quoted thousands of pounds to access the transcript of her own court case. Nobody should be priced out of seeing their own story in black and white after they have gone through a Crown court experience. Charlotte Meijer and the campaign Open Justice for All have been campaigning incredibly on this issue. They have published a letter calling on the Deputy Prime Minister to go further and faster, and that includes ensuring that magistrates courts are recorded and sentencing remarks are made available for free in all courts.
We are not here to discuss the Courts and Tribunals Bill, but it does not seem to be progressing currently or coming back to the House in any rush. I would be quite happy for clauses 1 to 8 to never appear again, but other clauses that do really important things—introducing recording in magistrates courts, repealing the presumption against parental responsibility—are key to strengthening our justice system and our family courts.
We repeatedly hear stories of failings in infrastructure such as roofs collapsing, IT systems not working, and evidence being shared on a memory stick and being lost during a hearing. The Ministry of Justice must get a grip of this chance to change that and to improve the environment for those working in the courts and those attending them.
I will briefly move on to prisons, which continue to run very hot. They are overcrowded, understaffed and increasingly unable to rehabilitate offenders. Violence is rife, with an average of 28 assaults on staff every day across the prison estate. On the point made by the hon. Member for Bridgwater about higher sickness levels, I think that is in large part due to the stress experienced by prison staff. We see the same in the Probation Service, which has a much higher sickness rate than other civil service departments, and I think it is also largely due to stress.
The Liberal Democrats believe that rehabilitation must be at the heart of any approach within our prison system. That means investing in better education, alongside introducing a through-the-gates mentoring programme to support prisoners as they transition back into society. Education is a key area. I recently raised it with the MOJ, because Government analysis shows a significant decrease in core education hours in public sector prisons. That has been felt most acutely in women’s prisons, where there has been a 30% fall in the number of hours for which women can access prison education. The Government urgently need to set out a plan to reverse that trend, otherwise the cycle of reoffending will simply continue for far too many people. Reoffending, as mentioned by the Chair of the Public Accounts Committee, is estimated to cost taxpayers £20.9 billion every year.
I sat down with a group of ex-offenders earlier this year, working with the organisation Revolving Doors. One of the ex-offenders I was chatting to had been in prison 17 times on short sentences. He explained that drug addiction was ruling his life; when he was released from prison, in order to fund a drug addiction that was costing him £250 a day, he would commit theft to the value of £750 a day. He would re-sell the stolen items so that he could afford his drug habit. This shows that there is a cost to our businesses as well. If we do not get the criminal justice system working, and if we do not invest in people and stop the cycle of reoffending to fund addiction, those people get trapped in the criminal justice system. Nowhere in our system is the “investor save” principle stronger than in our criminal justice system.
A well-functioning Probation Service is indispensable to rehabilitating ex-offenders. A dysfunctional Probation Service fails victims. Probation officers are expected to manage ever larger caseloads while receiving less training. Combined with poor pay, it is little wonder that many leave, despite wanting to help. A probation officer said to me, in one of my surgeries, that when she first started in probation 30 years ago, she spent 30 minutes with an offender she was managing. When she came out of the meeting, her boss said, “Why on earth did you only spend 30 minutes with that person? How on earth could you get to know them in just 30 minutes?” She said that if she spends 30 minutes with somebody now, she is told she needs to speed up because she has spent far too long with them and has far too many people to get through. She has stuck it out—she is still in the Probation Service—but so many people leave. We have a real retention crisis, because nobody goes into probation to tick boxes; they go in because they truly believe that they can change people’s lives.
In February this year, the Public Accounts Committee published a report on the efficiency and reliability of the Probation Service. It concluded that
“the Probation Service in England and Wales is failing”,
that it is
“teetering on the edge of collapse”,
and that its performance has significantly worsened since the MOJ and His Majesty’s Prison and Probation Service brought probation under full public control in 2018-19. The failure of the system is epitomised by record numbers of prisoners being recalled to custody. At the end of March 2025, recalled prisoners accounted for 15% of the entire prison population—a 49% increase since 2021. I recognise that the Government will have invested £700 million in probation by 2028-29, but we are yet to see a significant step change to show that that investment has stabilised the service. It is not just about the investment, though; it is about the culture shift that is desperately needed in probation. I have had many conversations with the Prisons Minister in the other place on this topic and I know it is something he feels passionately about.
Keeping the public safe also requires improvements to policing, a return to visible neighbourhood policing and an end to the scourge of officers stuck behind desks completing administrative work. Even though policing has received an uplift, cases are, as the hon. Member for North Cotswolds said, far more complex and require far more police time. This situation—alongside the alarming reduction in police front counters and stations—has left communities, especially those in my constituency, feeling abandoned. I should not see constituents turning around with shock when they see a police officer walking down the street with me in areas like Selsey; they are so not used to community policing people acted like they had never seen a police officer before when they saw us. The Government should commit, as part of their upcoming police force reorganisation, to embedding a dedicated rural and coastal crime team in every police force, ensuring that rural crime does not go unpunished.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I am grateful to be able to respond to this estimates day debate considering the expenditure of the Ministry of Justice and the Home Office as it relates to criminal justice. I thank all Members who contributed. I especially thank the Chair of the Public Accounts Committee, my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown), for opening the debate, and for his sponsorship of the application for debate, alongside the Chairs of the Home Affairs Committee and the Justice Committee.
I want to thank all the prison, probation and police officers, the staff that work in the relevant agencies, and the many workers and volunteers in the associated charities who work hard in our justice system. Whatever we debate, and whatever the Government decide around expenditure, they are the ones who have to go out and deliver the priorities of the Government of the day.
I am afraid that, whatever the topic and whatever part of their activities and spending plans we are debating now, we are debating a shadow Government—a Government in name only. We are debating the spending plans of a Government who lost their Prime Minister a week ago. We are scrutinising the priorities of a Ministry of Justice whose Lord Chancellor serves at the pleasure of a Labour party that is, as we speak, sounding the fanfares and preparing a coronation for its newest MP to become Prime Minister—a Prime Minister whose team has briefed The Spectator that they are going to sack the Lord Chancellor. We have no idea who will be the Lord Chancellor in a few weeks’ time, nor even who will make up the ministerial ranks serving him.
We have a Government in limbo, and however much they protest and tell us that it is business as usual, there will not be any sensible civil servant in any Government Department wanting to move forward policy and delivery work when they have no idea whether it will or will not survive contact with the right hon. Member for Makerfield (Andy Burnham) and his new Ministers. This provides Labour with a welcome opportunity to change course. We have heard about the challenges facing these Departments, including prison education, the court estate, data, record levels of mistaken releases—at record levels—as well as legal aid and the IT hacking experienced earlier in the year. The Government are wrestling with many issues, but I will primarily focus on two.
First, I will turn to Labour’s appalling plans to let rapists, paedophiles and seriously violent criminals out of prison early, which we were able to consider today through the urgent question. Many of our constituents have been receiving letters telling them that the person who was convicted of harming them is being considered for early release. Victims have already spoken publicly about the impact that has had on them, and this is before they are certain about what is going to happen; that is because, to make it even worse, the letters do not tell them if the prisoner will definitely be released, or when exactly, just that they might be.
The Conservatives’ understanding, though, is that everyone who has been written to has a perpetrator who is serving a standard determinate sentence and therefore will automatically be released early. Labour has failed victims either way: either they are all being released, so why have the Government not told people whether they are and when; or some of them will not be, in which case, why are the Government causing unnecessary upset and distress to victims?
Sir Ashley Fox
Does my hon. Friend recall that when the Labour party announced its early release system, it said words to the effect of those who have been imprisoned for the most serious and heinous crimes would not be covered by the early release scheme? Does it not seem extraordinary that rapists and those who have committed serious sexual assaults are in fact eligible for this early release scheme?
Dr Mullan
My hon. Friend is right, and I will discuss his point in more detail. My hon. Friend said, “words to the effect”, but that was the exact wording that Ministers used in this Chamber, on the Government website and in press releases: the Government said that the most serious offenders would be excluded. When we challenged that, behind the scenes—and even on live television, on Sky News—Ministers said that what we were saying was not true; as we now know for sure, it was.
Labour tells us that this move is necessary. I imagine that Labour Members who genuinely care about these issues have been told by Ministers that here is nothing else they can do—that they have no choice and it is all because of the prison overcrowding crisis. I want to tackle that in detail, because that is not true. There are always different choices to be made.
The estimates before us, explaining the spending that is planned on prisons and prison spaces, highlight that most of the Department’s capital budget is allocated to the prison programme, which was awarded £7 billion up to 2030 in the recent spending review. Ministers know that their planned prison space numbers are essentially the same as ours were. The Minister also knows that the prisons that the Government have opened were paid for and started by the last Government. I share the frustration that Ministers at the time felt with the challenges in prison building; this Government already know how that feels at first hand, considering they have failed for more than a year to do anything significant about a major prison building contractor going bust. Nevertheless, more spaces are due to come online. So what we are managing is a short-term challenge.
I have spoken before about my preference for the justice system to be a greater public and political priority, which the Liberal Democrat spokesperson, the hon. Member for Chichester (Jess Brown-Fuller), also spoke about. Others, including the hon. Member for Congleton (Sarah Russell), talked about the long-term lack of prioritisation of this issue. As a result, early prison release is absolutely not new. The previous Labour Government released 80,000 prisoners early, and the previous Conservative Government also operated the same early release programmes; Labour has used the exact same programme that the previous Government used and then implemented one of its own. These programmes allow for a Government to manage prison capacity in order to tackle the sorts of challenges mentioned by Ministers and Members on the Government Benches.
Previous projections are also unreliable and have forecast much higher prison populations than is currently the case. In fact, the prison population was projected to reach 90,000 by June 2019, but it did not hit that figure —it never has. So is the plan to release rapists and child groomers an essential short-term measure? No, it is not. It is a permanent long-term change to our sentencing laws that will have a profound impact on victims and the ability to secure justice. It is also being done in a fundamentally different way from other early release programmes.
Early release schemes have historically excluded serious violent and sexual offenders, but this Government are deliberately and specifically choosing not to do that. We warned the Government repeatedly that their exclusions based on sentence type were flawed, but they simply said again and again that the most serious offenders would be excluded. That was always untrue, because the criterion for this—the use of an extended determinate sentence—was never a criterion related to the seriousness or type of offence. During the passage of the Sentencing Act, I told the Government that every year, more than 60% of rapists and 90% of child groomers receive standard determinate sentences, and would therefore not be excluded and could be released early, but they did not listen. Instead, they sent Ministers on to the airwaves to say that it was not true. Now, finally, after victims themselves have been written to, the Government can no longer escape from what they have done.
Those victims include Fiona Goddard, who went public in sharing her letter last week. Live on “Good Morning Britain”, after explaining what her perpetrators had done to her—about the rapes and sexual assaults that she suffered—she was told the Government line: that they had excluded the most dangerous offenders. Susanna Reid, who was interviewing her, saw immediately how insulting to Fiona that response was, saying that it did not address anything that she had been saying. Fiona said that it was
“actually quite offensive, because they are basically trying to say that sexual crimes against children aren’t some of the most serious.”
She is right, isn’t she? How can anyone justify an early release programme that includes rapists and child sexual predators by saying it excludes the most dangerous offenders?
The use of the word “dangerous” is in itself a deceitful change in terminology. Up until last week, the Government said that the programme would exclude the most serious offenders, despite, as I have said, me telling them repeatedly that this definition was not aligned to the sentences they were excluding. Finally, just weeks before serious criminals will be let out, they have realised that they were wrong—not that “dangerous” is any better than “most serious” if, either way, rapists are included and are being released early.
We know that more than 7,000 victims have been written to; we know that many more are not registered for updates and will not be told. But how many perpetrators are getting out, and what offences have they committed? We do not know. We have an idea. We know that every year, as I mentioned, more than 5,000 rapists, paedophiles, child groomers and seriously violent offenders are sent to prison on a standard determinate sentence. That is every year—we can therefore assume that thousands of such offenders are in prison at any one time.
The Government are today happy to present to us their estimates on their spending on the prison population and prison building, but they will not and cannot tell us how many of those offenders they will be letting out.
Sir Geoffrey Clifton-Brown
As my hon. Friend and the House will know, the reoffending rate is around 50%. Given the numbers he has just announced, it is inevitable that serious crimes will be committed. If the Government are committed to this policy, which I hope they are not, and want to release people early, which I do not agree with, they should not release these serious criminals. They should instead release the less serious criminals.
Madam Deputy Speaker (Caroline Nokes)
Order. I will remind the shadow Minister that this is a debate on the estimates—perhaps we could return to them.
Dr Mullan
If you will forgive me, Madam Deputy Speaker, I am talking about a major issue that relates directly to the estimates: the prison building programme, the need for that programme and what the Government are doing to manage the prison population. I believe it is directly related to the estimates in that regard.
I repeat, sincerely, that multiple Governments of different parties have let prisoners out of prison early in order to manage prison crises, but they have never let rapists and child groomers out early. Government Members are therefore backing a totally unnecessary way of managing prison capacity. They really do not have to do it. They are being forced into doing so, and I feel very sorry for them as a result.
It is difficult to understand how the Government can lay these estimates before the House and put forward a proposal for changes to sentencing if they do not even know how many people they are letting out of prison and for what reason. I cannot believe that the Minister thinks that that is acceptable, and it will be difficult for her to justify. But, to be fair, she may also struggle to answer a basic question about her own responsibilities—about her plans to erode our right to jury trial and to abolish our right to elect.
The Conservatives will oppose any erosion of the right to jury trial. It is a constitutional protection that belongs to people, not to the convenience of a Government. The evidence does not support the case that jury trials are the cause of the backlog; empty courtrooms are. We are awaiting a date for Report stage of the Courts and Tribunals Bill. Given the political situation, and considering the Minister’s planned capital and revenue expenditure in this area, I think it is entirely legitimate to ask whether the proposal on jury trials is even still Government policy. When the legislation that is meant to address the central crisis in our criminal justice system is dependent on who wins an internal party election in the next few weeks—if there even is one—that is not a functioning legislative programme; it is chaos dressed up as reform.
Are the Government laser-focused on what will actually work to bring the backlog down? No. Instead, they have been laser-focused on driving through unnecessary vandalism on one of our oldest constitutional rights. While the backlog is still much too high, the backlogs in Crown courts are stabilising and even coming down in some areas. The Government have announced uncapped Crown court sitting days for 2026-27, and we absolutely welcome that, even though it took much too long. It is exactly what we have called for consistently, and I give credit where it is due.
We have seen the first quarterly decline in Crown court backlogs across England and Wales in three years in the most recent data. The Criminal Bar Association points out that in particular areas of the country, the reductions are more significant. In the south-east of England, the backlogs in courts are down 3.1% over three months and 4.2% over six months. In the north-west of England, they are down 2.3% over three months and 3.3% over six months. In the north-east of England, they are down 2.9% in three months. In Wales, they are down 2.4% over three months. Meanwhile, the figure for magistrates courts shows an all-time peak of more than 370,000 cases at the end of March this year, up 2% on the previous quarter—and the magistrates courts are where the Government want to send more cases.
We heard again and again in the first stages of the Courts and Tribunals Bill that the workforce, whether it be in the courts, judges or legal representatives, can bring the backlogs down, but that the jury reforms were an unnecessary distraction. According to the X feed of the monitoring account Idle Courts, recently as many as 123 out of 516 Crown courtrooms—nearly a quarter—were standing empty on working days. We know that that was not because there were no cases to hear, no juries or no defendants. It was because of issues such as listing challenges, staffing shortages and the underutilisation of available court space.
To date, the Government have not listened and have refused to drop those parts of the Bill that are, as the hon. Member for Chichester said, clearly unwelcome to so many in the workforce. I hope we learn today that what we are told about the views of the right hon. Member for Makerfield is correct and that this unacceptable plan to erode our jury rights will be dropped.
Let me turn to the Home Office elements of this debate, because the two Departments are inextricably linked. Members will understand that it is not the day-to-day responsibility of the Minister or I, but we both know that what happens at the front end—policing, charging, and bail—flows directly into the courts, with probation and prisons at the back end. Police officer numbers fell by more than 1,000 in just one year under this Government, from September 2024 to September 2025, and the total number of people involved in policing fell by 3,000. The National Police Chiefs’ Council said in response to this year’s funding settlement and the estimates that we are debating that many forces are planning service reductions, with consequences for officer numbers, staff capacity and overall resilience.
The Government cannot simultaneously claim to want swifter justice and a safer society while allowing the frontline workforce who investigate crime, make arrests and build prosecutions to continue to shrink. The Conservatives’ plan would put 10,000 extra officers on the streets, triple the use of stop and search, and introduce facial recognition technology in the worst crime hotspots.
On asylum, the Home Office estimates that there are more than 400,000 illegal migrants in the UK—people in this country illegally—but nearly half cannot be removed because of outstanding asylum and human rights claims. Total spending on asylum support remains at over £4.5 billion, and the decision of the Government to put even more asylum seekers in more expensive locations such as Crowborough in Wealden in the constituency of your fellow Deputy Speaker, Madam Deputy Speaker, is going to cost more money than if they were to be kept in their original places.
Let me close with this. The Chair of the Public Accounts Committee said that the focus of the debate can be distilled to concerns about the risks to public safety and trust, and he is right. We are spending more than ever before on our criminal justice system—billions of pounds of taxpayers’ money flow through the estimates we are debating—but reoffending is rising, rape gang survivors are being told that their abusers may be freed early and police officer numbers are falling. The Government may be about to change their Prime Minister, and with that the MOJ will more than likely welcome a new Lord Chancellor, so policies announced with great fanfare may quietly disappear over the summer, but the people waiting for Crown court hearings and the victims seeing criminals walk free will still be there.
We will not oppose the estimate, but we will not let the Government off the hook, either. They have had nearly two years and the numbers are not getting any better. The public deserve better. The Opposition will hold them to account for every one of these figures, whoever happens to be sitting in Downing Street when we do it.
The Minister for Courts and Legal Services (Sarah Sackman)
I associate myself with the remarks of those who have thanked the Chairs of the various Select Committees for securing this important debate, and I thank everybody who made incredibly thoughtful contributions to it, although there was the odd exception.
To govern is to choose, and those on the Opposition—[Interruption.] I am coming to it. The hon. Member for Bexhill and Battle (Dr Mullan) is getting started early. We know what choices the Opposition would make, because the Government’s inheritance in the criminal justice system was intolerable. Our prisons were allowed to run red hot so that the most serious offenders had nowhere to be locked up—a total dereliction of duty from the so-called party of law and order. In our courts, we had record and rising backlogs—there is consensus about that in the House—with both victims and defendants seeing intolerable delays. I could not agree more with the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) that this is one system, and it must keep the public safe and command public confidence. Yes, indeed, justice delayed is justice denied.
We see the brass-neckedness of Opposition Members—there is no apology—but this Government do not duck the choices. As I will come to, in both areas we have grasped the nettle. We have sought expert advice in the form of the independent review led by Sir Brian Leveson into the state of our criminal courts, and from David Gauke in relation to sentencing. We have heard the conclusions of those reviews, and yes, we have been prepared to make the tough choices required to put our justice system first and to put it on a stable footing.
The context outlined by the hon. Member for North Cotswolds and astutely by my hon. Friend the Member for Hammersmith and Chiswick (Andy Slaughter) is one in which for several decades justice has been relatively sidelined in public policy terms and in investment terms. That has changed under this Labour Government with the uplift in the capital budget, as hon. Members across the House have rightly acknowledged. That is seen in prison construction, the investment in our court estate, the investment in the technology required to bring our justice system into the 21st century and, indeed, in the vital intervention of uncapping sitting days to salvage our courts from the brink of collapse. That is the choice that the Government have made to put justice first and to fix the mess that the Opposition left us with.
Let me turn first to the crisis in our courts. We have taken a multi-pronged approach to this issue, as is set out in the estimates Bill. In colloquial terms, I would say that we have thrown the kitchen sink at it. We have done that in three ways: investment; modernisation and efficiency; and reform. Let me take each in turn.
First, we have taken the choice that the Conservatives failed to take when they gutted our legal aid system, our court workforce and the capital spend in our courts. We have reversed that. Now, £2.78 billion has been agreed in the concordat with our courts, including those uncapped sitting days, and £287 million in capital spend is literally fixing the leaking roofs in Newcastle and right across the country. I was also pleased to see Harrow Crown court reopened when I visited the other day.
On investment in our workforce, the hon. Member for Bexhill and Battle speaks of empty courtrooms. Of course we do not want to see empty courtrooms, but that is a reflection of the state of system capacity. We cannot 3D-print judges, prosecutors, defence lawyers or court staff; we have to train them. Those people are skilled. They have to be trained, they have to be remunerated, they have to be retained. That is why this Government chose, early doors, to make the investment of £116 million in criminal legal aid for solicitors, the £34 million pledged to advocates and the record settlement for the Crown Prosecution Service, as well as the investment in our judiciary. It is that that is going to fill and sustain our empty courtrooms.
Many, including the hon. Member for Chichester (Jess Brown-Fuller), have rightly spoken about victims. We have made a £0.5 billion investment in victim support services. The transformation in the availability of transcripts and audio recording of proceedings in our magistrates courts is vital not only to improving the victim experience but, given the intolerable delays, to keeping victims and witnesses engaged in the process, because when victims and witnesses pull out of the process and walk away, they do not get justice at all. That is the situation that the Conservatives left us with.
Efficiency and modernisation are vital too, and it is right that Members across this House challenge the system and challenge those responsible for it to improve matters. I am grateful to my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for referring to prisoner transport and the prisoner escort and custody services—PECS—because this issue has been highlighted by the Bar, by the judiciary and by Members in this House. The Minister for Prisons in the other place and I have set up an oversight board to grip our PECS contracts—contracts that were agreed with Serco by the previous Government—to ensure that we are driving out inefficiency in that operation from end to end.
The judiciary is making a step change through a national listing framework, accompanied by AI data-driven tools, to improve the listing and scheduling of cases and make it more consistent. We are seeing investment in blitz courts in London and other places, as well as a case co-ordinator in every single Crown court centre to progress cases more rapidly. The adoption of remote technology is increasing the amount of remote participation, reducing the need for those prisoner transfers and enabling us to get through the easier cases. All of that is being done to drive the efficiency that everyone quite rightly wants to see.
However, I have to be clear that—just as my hon. Friend the Member for Hammersmith and Chiswick said, and consistent with the conclusions of Sir Brian Leveson—efficiency and investment alone will not reduce the backlog. It is true that the investment that we have made in sitting days, uncapping them for 2026-27, has resulted in a stabilisation of the backlog, just as we hoped it would, but the backlog continues to sit at over 80,000. Behind each and every one of those cases, there is a victim waiting for justice and a defendant stuck languishing in the remand system, and the public’s confidence in our criminal justice system is waning. That is why we will not duck the necessity of structural reform.
Sir Geoffrey Clifton-Brown
The Minister is absolutely right: it is necessary to have confidence in our criminal justice system. Will she therefore answer the question from my hon. Friend the Member for Bexhill and Battle (Dr Mullan)? Will the Government be letting out rapists and other serious offenders under the early release scheme, and if so, how many?
Sarah Sackman
I am talking about courts, but I will turn to sentencing and prisons in due course. However, I must remind the hon. Gentleman that the Sentencing Act provisions, which will come into force in September and to which he refers, were made necessary by the Opposition’s failure to invest in prison places over many years. Over 14 years in government, they made their choice, and they added net 500 prison places. In the first two years, this Government have already delivered an additional 3,000 places, and the biggest prison building programme since the Victorians is set to deliver 14,000 additional prison places.
Let me return to the Crown court backlog. Reform cannot be avoided. To bring the backlog down, it is vital we ensure that the right cases are heard in the right place. It cannot be right that defendants can insist on their right to a jury trial in cases that could be heard by magistrates under even the existing sentencing powers. That is not fair on victims, and it is not fair that those cases are in the same queue as other, more serious cases, which have to have a jury trial, but a timely one. We cannot duck those choices.
The proposals to increase magistrates courts’ sentencing powers, remove the right to elect and create a Crown court bench division are sound. When a triable either-way case is heard in the magistrates court, it moves far faster than in the Crown court. We have to take a proportionate and hard-headed approach that balances the rights of defendants, the rights of victims and the entitlement of every citizen in this country to a timely trial. Timeliness is an essential ingredient of fairness.
As I have said, we inherited a prison system on the brink of collapse. To govern is to choose, and we took decisive action: £4.7 billion invested in the largest prison building programme that this country has seen, more foreign national offenders deported than ever before, 3,000 prison places delivered in the first two years of this Government and the Sentencing Act reforms, which will put our prisons on a more sustainable footing. As others have mentioned, we have also made a vital £700 million investment in probation, which is crucial to keeping the public safe and, as others have said, getting reoffending under control. Punishment can take place in prison, but punishment can also take place outside prison. The tough community sentence regime, the presumption of tagging, and the managed, structured and orderly early release system, as compared with the chaotic and opaque system under the previous Government—that is the choice that we make. That is how we get our criminal justice system under control.
Sarah Sackman
The hon. Member has had an entire urgent question in which to ventilate these issues, and I am here to debate the estimates and address some of the other points that have been raised. I do not duck the essential point that our early release scheme will apply to some of those guilty of the offences to which he refers, if safe to do so. If they have misbehaved in prison, they will not benefit from those provisions. The point is that this is not a free-for-all. They will be subject to tagging and control on the outside. That is why the investment in probation is critical.
Sarah Sackman
The policy exists, as I have said, critically in the context of a restored probation system, and it is to that which I come right now.
Probation is an indispensable part of the scheme that the hon. Member talks about—a probation system that was, as I have said, absolutely gutted under the Opposition. Probation and community services will receive an additional £700 million by the final year of the spending review. In real terms, that looks like recruiting at least an additional 1,300 trainee probation officers by March 2027, on top of the over 2,300 who have been onboarded in the past two years. Those hard-working probation officers—not the slackers that perhaps were portrayed by the hon. Member for Bridgwater (Sir Ashley Fox); far from it— doing some of the most difficult jobs in our public services have been delivered a 6% headline increase in pay, and rightly so, because they do such valuable work. They have been given the tools with which to do that work.
We have the biggest expansion of tagging in British history, with a presumption that every offender will be tagged on release from prison, save in very specific circumstances. All of that keeps the public safe, and staff will be given the technology to enable them to do their work in a more efficient and accurate way with the Justice Transcribe AI-powered tool. These investments and reforms will ensure that probation officers can have the biggest impact by focusing on those who present the highest risk.
A number of points have been made on legal aid, which will celebrate its 80th anniversary in a couple of years’ time. It is one of the proudest achievements of a previous Labour Government—the Attlee Government. It is something that we have put back on a stable footing. As I have said, we have put in an enormous uplift of £116 million for legal aid solicitors, up to £34 million for barristers, match funding for pupillages, building the workforce and, to the question of my hon. Friend the Member for Congleton (Sarah Russell), investment in the digital system.
My hon. Friend is right that the particular line in the estimates pack from the House of Commons Library to which I believe she refers does not reflect the totality of the capital investment that the Government have made in this area. We are at £61 million invested in the digital transformation. That is much needed because those in this House will know that the impact that the criminal cyber-attack had on the legal aid system was so detrimental, precisely because there had been so much underinvestment and neglect of the system. It is therefore important that we not just stabilise the system, but transform it so that legal aid providers, but even more importantly, their clients can benefit in the long term.
I am conscious of time, and so I will speak briefly about policing. The hon. Member for North Cotswolds is absolutely right that this is one system and it needs to behave as such. I recently had the privilege of visiting the Greater Manchester local criminal justice board, and I saw an outstanding example of cross-working in the criminal justice system. Prevention is better than cure, and so much of the investment we see in policing, but also the reform in the policing reform Bill, which will bring so many officers out from behind their desks and onto the streets in neighbourhood policing, will mean that we can prevent so much crime and intervene before so much of that behaviour becomes problematic.
Sir Ashley Fox
On prevention being better than cure, would the Minister care to comment upon the reduction in provision of prison education before she concludes her remarks?
Sarah Sackman
Prison education is vital, and I have seen some fantastic examples of it, in particular on a recent visit to High Down. Prison education can take many forms, such as vocational training and education in a conventional sense. In some senses, the bigger question is how do we make our prisons safe? There is no point in having outstanding education—I agree with the hon. Member that it is important; I do not think we disagree on this—if drones are bringing drugs and contraband into prisons, as he pointed out, and if prisons are overcrowded. If that is the case, it is almost impossible to deliver and see the benefit of that education. The fact that this Government are prioritising, through a £40 million investment, a drone prevention programme, that we are building new prisons that are fit for people to live in and receive that education, is a choice that makes sense and that, as I said, prevents so much of the problem.
Violence reduction units, the prison reform Bill, and the workforce plan that the Home Office has put forward are all part of the choice—I return to that theme—that the Government make, whether on policing, courts, prisons, or probation. We choose to fix the mess, and when we see a problem we make the choices required to fix it. Investment, modernisation and reform: the contrast between that and the choices that Opposition Members made when in government could not be starker. We must now give the plan a chance to work.
Madam Deputy Speaker (Caroline Nokes)
I call Sir Geoffrey Clifton-Brown to wind up the debate briefly.
Sir Geoffrey Clifton-Brown
This has been a constructive debate, and everybody has aired the themes that I raised throughout the debate. The Minister has outlined one or two areas where things are going a little better, namely perhaps a reduction in some of the Crown court backlogs, but that is countervailed by increases in the backlog in magistrates courts. I echo the remarks of my hon. Friend the Member for Bexhill and Battle (Dr Mullan) —as I am sure the Minister would—because we should pay grateful thanks to those police officers, probation officers and court officers who often have to work in incredibly difficult conditions, delivering some of the most difficult tasks in society. We should thank them.
The most worrying thing I heard tonight concerns the early release scheme, and the number of potentially very serious criminals who will be released. The Minister has made very clear that government is about choices. I think this is the wrong choice, but if she and the Government are determined to do this, let us be honest about it. She did not answer my question about numbers, but perhaps if I table a parliamentary question she will—I will do that to see whether she does answer it. I think this is the wrong choice, and I urge her again to rethink it.
I also echo comments made by my colleagues. The reoffending rate is far too high at around 50%, and we must find a way of giving prisoners meaningful education, training and skills, so that when they come out of prison they will, we hope, not reoffend. Finally, the Minister makes great play of measures that will be taken with serious offenders when they come out of prison—tagging and so on. Tagging has a part to play, but as she and I know, and the rest of the House knows, if a prisoner is going to commit a crime, they will commit that crime whether they have a tag on or not—they will probably take it off before they commit the crime, but I do not wish to go too far down that line. I ask the Minister to please reconsider this issue. We all want the criminal justice system to work and for people to have faith in it, but my worry is that if one person who is released early commits a heinous crime, that will destabilise society in a huge way. Otherwise, this has been a constructive debate, and I thank the Government and the Minister for her time.
Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).
Business without Debate
Diethylstilbestrol: Intergenerational Impact
(1 day, 4 hours ago)
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Jessica Toale (Bournemouth West) (Lab)
I am grateful to have secured this important debate.
I begin by asking the House to imagine a young woman in Britain in the 1950s. She is pregnant, she may have struggled to conceive and she may already have experienced the heartbreak of miscarriage, so she is desperate to do everything that she can to protect her baby. She goes to the doctor, as many of us would. She is prescribed a drug and told that it may help to prevent miscarriage, help her carry that baby to term and even give her the healthy child she so desperately wants. Of course she takes it—why would she not? She trusts her doctor, she trusts the health system and above all she wants to do the best she can for her child. But then imagine her finding out, decades later, that the very medicine that she took to protect her child had in fact harmed her, harmed that child and may even have harmed her grandchildren as well. That is the reality of diethylstilbestrol or DES.
DES was widely prescribed as an anti-miscarriage drug between the 1930s and the 1970s. It was used to treat pregnancy complications and to supress breast milk, and it was prescribed to women who were looking to the medical profession for help. But DES was not the miracle drug they were told it was. Evidence emerged in the 1950s that not only was it ineffective, but that it was also dangerous. It has since been linked to breast cancer, cervical and vaginal cancers, infertility and a range of other serious reproductive and gynaecological issues. Yet despite the warning signs, the evidence of harm and the fact that other countries moved to withdraw or restrict its use, DES continued to be prescribed in Britain for decades. Around 300,000 women are estimated to have been given DES in the UK between 1939 and the 1970s.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for Bournemouth West (Jessica Toale) for securing the debate. I spoke to her beforehand to obtain her permission to intervene. As she rightly says, over 300,000 women in the UK were prescribed DES in one of the worst medical disasters in NHS history. Repercussions of the use of the drug, as the hon. Lady says, are intergenerational, as evidence shows negative effects on third generations. Does she agree that further research is needed to study the long-term effects of DES exposure to better understand the extent of its impact and ensure effective medical treatment for those affected by the drug? I commend her again and I look forward to hearing the Minister’s reply.
Jessica Toale
Yes, I agree that research is needed and that is one of the things that DES campaigners are calling for.
One of those 300,000 women was Rita, the mother of my constituent, Jan Hall. Rita was prescribed DES when she was pregnant with Jan, but when Jan was just a toddler, Rita died of breast cancer. She was only 32. Jan herself later developed cervical cancer in her twenties. Because of the surgeries she had to undergo, she was told she may never be able to have children. She lived not only with that physical consequence, but with decades of uncertainty, fear, grief and anger. Her daughters have experienced significant gynaecological health problems, and now Jan worries about her grandchildren as well.
Jan is not alone. Across the country, men, women and their families have come forward to share their stories and their experiences as victims of this scandal. Some of them are in the Gallery with us today and have allowed me to share some of their painful testimonies.
Alison Bennett (Mid Sussex) (LD)
One of the people in the Gallery is my constituent, Heather Farrant, who came to Parliament today with two of her three daughters. She has lived with the lifelong consequences of her mother’s exposure to DES. Will the hon. Lady commend Heather and all the campaigners for their bravery in speaking so publicly about something that has been hidden for a long time? Until Heather came to speak to me in my surgery, I had not heard of DES, and without those campaigners, we would not have known about it and been able to raise it here today.
Jessica Toale
It was a pleasure to meet Heather today, along with all the other campaigners. I thank them all for having shown such strength in coming forward to share their stories.
One of the cruellest impacts of DES, which sets it apart from other medical scandals, is that its consequences do not stop with the women who were prescribed it or their immediate children. There is growing evidence of intergenerational impacts affecting grandchildren, and possibly beyond. We do not yet know how far those consequences reach. That uncertainty is part of the harm that the families face.
Research suggests that women who took DES during pregnancy—the DES mothers—may face around a 30% higher chance of breast cancer. Female babies exposed in the womb—DES daughters—have around 40 times the risk of developing clear cell adenocarcinoma of the vagina and cervix. They also face increased risks of reproductive complications, including infertility, ectopic pregnancies, premature births and a range of other conditions and complications that we are learning about all the time.
Clare, who is in the Gallery today, described being robbed of her fertility and suffering ovarian failure, and later developing an autoimmune inflammatory condition. At the age of 18, Juliette, who is also with us, was rushed to A&E with severe haemorrhaging after a reaction to the contraceptive pill, and she has stage 4 endometriosis. Anne-Marie, who is also with us, was taken off the pill due to stroke risk and has described being housebound due to the gynaecological issues she has faced. Many of them describe managing complex hormonal challenges and, later in life, debilitating menopausal symptoms. That is a common experience for a lot of these women.
Dr Ellie Chowns (North Herefordshire) (Green)
I thank the hon. Member for securing this really important debate. One of my constituents, who is a DES daughter, came to see me, and she reported that her mother’s health records were lost when her GP moved back in the 1970s. Does the hon. Member share my concern that a key issue here is that the lack of effective recordkeeping and the loss or destruction of records over time make it harder and harder to trace causal effects? Does she agree that we want to hear from the Minister what allowances will be made for this record-keeping issue in addressing the long-term impacts of DES on those daughters and grandchildren?
Jessica Toale
Of course. Recordkeeping is one of the issues we face as a campaign group. I know the Department of Health and Social Care is looking at that, and I will come on to that issue later in my remarks.
Limited studies have been done on DES sons, but they suggest that these men face an increased risk of genital abnormalities and infertility. In May 2026, Maxwell Samuda became the first man to speak out openly about the effects of the scandal on him and his family, and I pay tribute to him. There are serious, unresolved questions about the second and third generations—the grandchildren. That is important, because this is not history or a scandal of the past; it is live and a continuing injustice to these women and their families.
People affected by DES are still living with the consequences today. Some are discovering later in life that health problems they have endured for decades may be connected to a drug that their mother took and was prescribed before they were born. Those who suspect DES exposure often find that doctors, clinicians and the wider health system have little or no awareness of it. That really matters, because for too many DES survivors, the harm has been compounded by the disbelief that they face. They have been told that their symptoms are unrelated and not to worry. They have been sent away, ignored, dismissed or left to piece the evidence together for themselves. Anne-Marie, who is here today, said that she had to buy her own medical encyclopaedia just to find out what was wrong with her.
Sadly, that is part of a much wider pattern that we see in women’s health, which has been poorly understood for generations and continues to be poorly understood today. Women’s pain is too often minimised. Their symptoms are normalised or ignored. Reproductive health is often treated as something that is niche, too complicated, embarrassing or somehow secondary, and it is not given the seriousness that it deserves. Women are not listened to and their concerns are dismissed until the evidence is too impossible to ignore. The history and present experience of DES is part of that wider system and failure, and, even now, we do not have the systems in place to properly support those affected.
One of the most worrying examples of that is in screening. Current routine smear testing for cervical cancer is designed primarily to deal with and detect changes linked to HPV. It does not reliably detect clear cell adenocarcinoma—the rare cancer associated with DES exposure. That means many DES daughters may believe that they are being adequately screened, but in fact the very cancers for which they have an increased risk will not be picked up through the standard process. Crucially, they need access to advanced screening for a much longer span of years than most women do.
A truly heartbreaking experience of that was the experience of Charly, who is in the Gallery today. She is a DES daughter and was diagnosed with clear cell adenocarcinoma in her cervix and uterus at the age of eight; she was given a hysterectomy at the age of nine. We know that standard breast cancer screening does not pick things up and is not adequate for women who face DES exposure.
Many women bear not only the emotional burden of uncertainty because of DES, but a financial burden, self-funding annual scans as a precautionary measure and undertaking fertility treatments. Today, in the meeting with the Minister, Juliette described the range of tests she undergoes every year at large personal expense and the lack of fairness for people who cannot afford to do so. That is unacceptable, which is why targeted screening and specialist monitoring for those at risk is so important. People who are affected need accurate information, proper care, and the chance of early diagnosis.
When I first heard Jan’s story, I had to act, and as a nation, we have a unique responsibility to act.
Mr Connor Rand (Altrincham and Sale West) (Lab)
I thank my hon. Friend for the powerful speech she is making, and for her campaigning work on this really important issue. I recently met my constituent Susannah, who is a victim of the DES scandal. She spoke movingly about the impact it has had on her life—20 gruelling operations since she was a teenager, precious time with her friends and family lost and the shadow of a life-threatening illness, because of course as a DES sufferer, she is 40 times more likely to suffer from cervical cancer. Does my hon. Friend agree with Susannah and me that the Government should very carefully consider the merits of a full public inquiry into this scandal?
Jessica Toale
I thank my hon. Friend for his intervention. I have also met Susie—she is a doughty campaigner and a real tribute to the movement. I will come on to some of the calls of the DES Justice campaign shortly.
The reason I think we as a nation have a unique responsibility to act is that DES was developed here in the UK, using public money. I am just going to let that sink in for a minute. It was not patented, meaning that it could be used widely, and it was. Despite the evidence of harms, the Medicines and Healthcare products Regulatory Agency still has not shown us any evidence of when it officially advised against the use of DES.
In July last year, I co-ordinated a cross-party letter signed by 37 Members of Parliament, calling for recognition and an apology for those affected by DES. Since then, those affected have come together to establish the DES Justice campaign, and I pay tribute to all the brave men and women who have come forward to share their stories. I know how painful and personal this is, and I know that for many, speaking out means reliving a trauma that has shaped their whole life. I also want to acknowledge Clare Fletcher and the DES campaigners who have worked tirelessly for recognition, often with little support and against huge institutional silence, and I thank Sarah Corker and ITV News for their investigation, which helped bring the scandal to public attention and forced institutions to begin answering questions that were left unanswered for decades.
That co-ordinated campaigning has paid off. In September, the MHRA admitted that it had made inaccurate statements for up to 25 years about when DES was withdrawn in Britain and apologised. In November, the former Health Secretary, my right hon. Friend the Member for Ilford North (Wes Streeting), acknowledged the suffering of DES-affected families and apologised. This was a huge step; it was the first time that many campaigners felt that the state had begun to recognise what had happened to them. That apology matters, but it cannot be the end of the matter, because for people like Jan—who has campaigned for more than 40 years—there must now be action.
The DES Justice campaign is calling for the Government to take five clear steps. The first of those steps is to commit to uncovering the truth about what happened, including through a full, judge-led statutory inquiry. The second is to support research into the long-term and intergenerational effects of DES; the third is to raise awareness of DES among NHS professionals; the fourth is to assess the feasibility of tracking and informing those potentially exposed to DES; and the fifth is to introduce targeted screening and monitoring for those at risk.
Those asks are reasonable, practical and necessary, because while some progress has been made, it remains nowhere near enough. We need updated and accurate information on the NHS website, so that people searching for DES are not left confused, frightened, or dependent on campaign groups for basic fasts. We need better information flows to GPs, gynaecologists, oncologists, fertility specialists and other NHS professionals. We need DES to be included in medical training and continuing professional development, so that clinicians know what it is, what the risks are, and how to support people who have been exposed. We need clear guidance on screening and monitoring, especially given the limitations of routine smear testing.
We also need a serious effort to understand whether and how those at risk can be identified, and those affected informed. I recognise that this is difficult—many of the records are old, and some have been lost or destroyed or were never kept properly. Some people will not know whether their mothers took DES, and some mothers may no longer be alive to be asked, but difficulty cannot be an excuse for inaction.
There are people who may be at risk today and do not know it. There are women who believe they are protected by the smear test, but they need specialist monitoring. There are families living with unexplained patterns of gynaecological problems—infertility, pregnancy loss or cancer—without even ever knowing that DES could be part of the picture.
Jessica Toale
There are mothers who carry and have carried unimaginable guilt—a guilt that should never have been theirs to bear. No mother should be made to feel responsible for trusting her doctor, no daughter should be left to feel that her suffering is inexplicable, and no family should be forced to campaign for decades simply to be believed.
I believe that DES is the greatest pharmaceutical scandal of our time, and one for which we owe victims justice and greater accountability. A drug developed using public money was prescribed to hundreds of thousands of women, with evidence of harm emerging while it continued to be used, and the consequences stretch across generations, yet most people have never heard of it. That is part of the injustice, too, and it must change.
I thank the Minister for meeting some of our DES Justice campaigners and their families today. Madam Deputy Speaker, thank you for dropping into our drop-in this afternoon. Will the Minister honour the calls of those campaigners for greater awareness among NHS professionals; better clinical guidance; more publicly available information; research; and targeted screening and support? Will the Government consider the case for a full statutory inquiry, so that the truth can finally be established?
Time is running out. Many DES mothers have already died. Many daughters are now later in life. Many campaigners have been fighting for decades to be heard. With every year that passes, more records disappear, more witnesses are lost and more families are left without answers. It is not too late to do the right thing, to acknowledge the scale of the failure and to improve care for those who were affected.
I close by paying tribute again to my constituent Jan, whose courage and determination brought this issue to my attention. She has kept campaigning not just for herself, but for every family affected by DES. I pay tribute to every DES mother, daughter, son and grandchild, and every family member who has fought for recognition. They deserve justice, and they deserve answers and to know what happened to them. They deserve to be supported by the very health system that failed them. If anyone listening to this debate thinks that they, their mother, their grandmother or someone they know may have been affected by DES, I urge them to seek further information from the DES Justice campaign or to contact my office. This Government have an opportunity to listen, to act and to begin putting right one of the greatest medical injustices of our time. I urge the Minister to take that opportunity today.
The Parliamentary Under-Secretary of State for Health and Social Care (Preet Kaur Gill)
I am grateful for the opportunity to respond to this important debate on the intergenerational impact of diethylstilbestrol on women. I begin by applauding the perseverance of my hon. Friend the Member for Bournemouth West (Jessica Toale) and the courage of those affected by the impact of DES, including the campaigners, many of them women, and their families, who have worked for many years to ensure that their experiences are heard and understood. I was honoured to meet some of them earlier today, and I thank them for being here in the Gallery tonight—mothers and daughters, on behalf of their children and grandchildren.
On 5 November 2025, my right hon. Friend the Member for Ilford North (Wes Streeting), the then Secretary of State for Health and Social Care, issued a formal apology on behalf of the Government to all those who have been affected by DES. I wish to reiterate that apology today. At this stage, the Government’s focus is on carefully considering the available evidence and determining the most appropriate next steps, rather than simply establishing a public inquiry. Our current work includes ensuring that appropriate clinical pathways, professional awareness and sources of support are in place for those who may have been affected by DES exposure.
We have taken action to raise awareness of DES among health professionals. On 12 December 2025, Professor Peter Johnson, the national clinical director for cancer, sent a letter to all cancer alliance leaders highlighting the effects of DES and asking them to cascade guidance through their clinical networks to help to reach appropriate health professionals, including GPs. We have also taken steps to improve our knowledge of the impacts of DES. The Department has formally commissioned the University of Exeter, through the National Institute for Health and Care Research, to undertake a systematic evidence review of those impacts, because, as my hon. Friend pointed out, the current research, while useful, does not yet paint a coherent picture. For instance, existing systematic reviews of the physical impacts across first, second and third generations are relatively dated, and have reached differing conclusions. There are also primary research studies that have not yet been incorporated in those reviews, and existing reviews have not fully considered psychosocial impacts. The newly commissioned review is intended to address those gaps.
My hon. Friend asked about screening. The research ensures that any future policy on local treatment pathways, clinical guidance and potential screening arrangements is informed by the latest available evidence. It will also be important in guiding decisions on whether a lifelong screening protocol should be developed for people affected by DES. The women affected by it should, of course, be involved in this work, which is why we ensured that the university will engage with members of DES Justice UK so that it can learn from women—and some men—with lived experience of the effects.
I recognise the importance of trying to understand the scale of DES exposure and the number of people who may have been affected. The Medicines and Healthcare products Regulatory Agency has taken a number of steps to establish what regulatory action was taken by its predecessor in relation to the risk associated with DES. They include searches of agency archives, both digital and hard-copy, for documentation relating to regulatory activity associated with the use of DES; visits to the National Archives to attempt to locate records from the 1970s, including discussions of DES by the Committee on Safety of Medicines, a predecessor of the Commission on Human Medicines; and locating previous editions of the “British National Formulary” and Association of the British Pharmaceutical Industry datasheets that may detail information on the use of DES. The MHRA also contacted the General Medical Council to establish whether any direct communications on DES had been sent by the GMC to healthcare professionals directly, but the GMC could find no records of communications. Finally, there have been searches of the Yellow Card database for any reports of the use of DES, although given the time that has passed, I am sure that the House will appreciate the significant challenges in relation to locating and retrieving records between the 1940s and the 1970s. In addition, my officials are working to explore what can be done through NHS digital processes in relation to missing or destroyed medical records.
Let me again thank Members for raising this important issue, and pay tribute to all those affected by DES who have continued to campaign for recognition, support and answers.
Lisa Smart (Hazel Grove) (LD)
I am here because my constituent Helen, from Romiley, came to see me at my advice surgery on Saturday. I was waiting to raise this point until the Minister was close to ending her speech, because I want to understand what is being done and what more the Government can do to give information to people who think they may be DES daughters. Helen’s mum certainly took something during her pregnancy, but it is difficult to interpret the GP’s handwriting on the records that Helen has received. What can the Minister tell Helen and people like her who think their health conditions suggest that they are DES daughters, but who do not yet have the evidence to show that they are?
Preet Kaur Gill
I thank the hon. Member for her question, and pay tribute to Helen. My hon. Friend mentioned this important issue. While there may be 600 women out there, there are many, many more who just do not know—and, I am sure, grandchildren too. Not only should information be widely available on NHS websites, but women should be able to go to their GPs, and their GPs should be able to direct them to a screening service, while also taking seriously the issues that they raise. More needs to be more done in this regard, and I look forward to working with campaigners and with my hon. Friend to establish what more we can do when we identify gaps.
I pay tribute to the women I met earlier today, who are sitting in the Gallery. Hearing directly from them their powerful testimonies puts a lot of this into context for me. It is not just about reading people’s stories; it is about the lived experience of what that trauma has been like for many women, their grandchildren and so forth. I pay tribute to Clare Fletcher; Marion and Juliette; Heather and her two daughters; Liam, Charly, Anne-Marie and her daughter; and Julia. My apologies if I have missed someone’s name. Thank you so much for sharing your exposure to DES and the fact that the healthcare system did not adequately address the recognised and multigenerational adverse effects of the drug.
We have to continue to listen carefully to those affected, learn from their experiences and take every appropriate step to safeguard people, now and in the future. As someone said, this is not simply a historical medical issue; it is about women whose voices were dismissed, whose experiences were doubted and whose families continue to live with the consequences. It is just a reminder that when women say that something is wrong, we must listen. We cannot change the past, but we can ensure that their voices shape how we respond.
Question put and agreed to.
Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2026
(1 day, 4 hours ago)
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The Minister for Energy (Michael Shanks)
I beg to move,
That the Committee has considered the draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2026.
It is a pleasure to serve in this Committee under your chairmanship, Ms McVey. The draft regulations were laid before the House on 14 May. Before I outline the provisions to be made by the statutory instrument, I will briefly provide some context.
The Offshore Petroleum Regulator for Environment and Decommissioning, which for the sake of all our time I will now call OPRED, minimises the impact of the offshore oil and gas sector on the environment by controlling air emissions and discharges to sea, and by reducing disturbance over the life cycle of operations, from seismic surveys through to post-decommissioning monitoring. OPRED recoups the eligible costs of its regulatory functions from industry in the offshore oil and gas sector in two ways: first, by using regulations that are covered by these draft fees regulations; and, secondly, by five charging schemes. The charging schemes do not require legislative change and will be amended administratively.
OPRED’s average income from fees is about £7.3 million annually, recovered from about 100 companies. Currently, the fees that OPRED charges are based on rates of £210 an hour for environmental specialists and £114 an hour for non-specialists. Environmental specialists are technical staff who carry out the functions of the Secretary of State, and non-specialists are support staff. OPRED’s fees are determined by multiplying the appropriate hourly rate by the number of hours worked by environmental specialists and non-specialist staff.
The current hourly rates have been in force since July 2025. Having reviewed its cost base, OPRED has concluded that the existing rates needed to be revised to reflect today’s costs for regulatory services. During the review, OPRED also identified that some regulatory costs were not being fully recovered, in particular the cost of statutory advice from nature conservation bodies and certain costs associated with the UK energy portal, which is OPRED’s digital system for delivering regulatory services.
The revised cost base ensures that all eligible costs are met by those who benefit from the services, rather than by the taxpayer. That is consistent with the Treasury’s “Managing Public Money” principles, which require full cost recovery where appropriate. The revised hourly rates were approved by the Treasury in January 2026. The draft fees regulations will amend the charging provisions by increasing the hourly rate for environmental specialists to £256 and for non-specialists to £130—there will be a quiz at the end to make sure that people know the difference between those two sets of numbers.
OPRED formally consulted the offshore industry on the rate change proposals and the cost base revision in February this year. The consultation, which launched on 17 February and closed on 13 March, sought views on the proposed rates and their implementation, and we received five responses. While that is a limited number of responses, the issues raised were broadly consistent. Respondents commented primarily on the scale of the proposed increases, including the cumulative impact over successive financial years, and made comparisons with inflation rates, and they expressed concerns about the transparency of the underlying cost base and the timing of implementation.
OPRED considered the consultation responses and concluded that the new rates accurately reflect the cost of carrying out its regulatory functions, despite being higher than the rate of inflation. OPRED acknowledged that the timing of the rate increase could cause issues for industry in relation to planning and budgeting, but it saw this as part of an anticipated annual process. The new hourly rates are expected to be brought into effect at the beginning of July, in line with rate changes in previous years. OPRED concluded that failure to implement the revised rates would result in costs falling on the taxpayer, rather than on those benefiting from its services. OPRED determined that the rates should be increased in accordance with the proposals in the consultation. A formal response was published in April 2026. OPRED’s fees regime guidance will be revised to reflect the new hourly rates.
I conclude by emphasising that the revisions to the hourly rates introduced by the draft regulations will allow OPRED to recover the eligible costs of providing regulatory services from those who benefit from them, rather than those costs falling on the taxpayer. I hope that all hon. Members will support the measure.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is an absolute pleasure to serve under your chairmanship this evening, Ms McVey. As the Minister has eloquently set out, the draft regulations seek to increase the fees associated with a number of assessment requirements for the licensing of offshore activity, such as conservation of habitats assessments and offshore safety directives, and they are eminently sensible.
Andrew Bowie
There is a first time for everything. I do not seek to stand in the way of these regulations, but I will raise the inherent irony illustrated here of a Government who have made clear their intention not to issue new licences for exploration yet are seeking to increase the costs associated with environmental impact assessments and other regulatory requirements. I hope it indicates the beginning of a change of course for the Government, but I fear that will not be the case. We can but hope.
This Government have decided time and again to move against our domestic energy industry, choosing to run down our North sea ecosystem rather than nurture the skills base and support the industry. Two weeks ago, the Aberdeen South by-election—a referendum on our oil and gas industry that I will not stop talking about—saw the north-east of Scotland return a decisive verdict. Will the Government listen?
Michael Shanks
The shadow Minister and I have this bout regularly, and he makes the same points as he always does. I congratulate him on the one by-election that his party has won, but I am afraid that I do not have time to name all the by-elections it has lost in recent years. However, I am absolutely delighted to find a bit of consensus between our two parties, and I welcome his support for the regulations.
On the wider point, as I have said repeatedly, our domestic oil and gas industry is hugely important and will continue to be so for many years to come, but so too is investing in the future of our energy industry beyond oil and gas. I hope that the same consensus we saw at the start of the shadow Minister’s speech might yet be found on our wider investment in the North sea, which benefits his constituents and indeed those of the new hon. Member for Aberdeen South (Douglas Lumsden).
Question put and agreed to.
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Animal Abusers
(1 day, 4 hours ago)
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Jacob Collier (Burton and Uttoxeter) (Lab)
I beg to move,
That this House has considered e-petition 759783 relating to a public register of animal abusers and automatic ownership bans.
It is a pleasure to serve under your chairmanship, Dr Murrison, and a privilege to lead this debate on behalf of the Petitions Committee. The creator of the petition, Bea Elton, joins us in the Public Gallery. Bea does not work day to day in the protection of animals; she provides a cleaning service for those in need and who are struggling to keep their homes in order. She documents this on her Instagram channel, cleanwithbeax, which has more than 2.2 million followers—probably about the same number as the Minister has.
Bea was kind enough to meet me online ahead of today’s debate—it is lucky she did not meet me in my office, because there was quite a lot of cleaning to do on my desk. Meeting Bea made clear to me her passion and sense of duty for those less fortunate than herself. While deep cleaning homes, Bea has uncovered the awful situations in which some animals find themselves vulnerable to serious neglect and abuse.
It is important to note the distinction between abuse and neglect. Abuse is distinguished by intent. Some people unintentionally neglect their animals due to circumstances beyond their control, such as financial difficulty or mental distress. Those people are not the concern of this petition, which is focused on intentional abuse. The abuse we are discussing today is not the professional cruelty of organised criminals running illegal dogfights or breeding operations, which are well known to the police, or abusive commercial practices in farms; it is about the hidden cruelty inflicted in domestic settings up and down the country.
Bea emphasised to me that her focus is on abuse committed in the domestic, rather than the commercial setting. Unfortunately, the most recent statistics from the Royal Society for the Prevention of Cruelty to Animals, the main investigative body for offences under the current legislation, confirm that Bea’s experiences reflect the situation across our society. In 2022, 400 pet owners were convicted on evidence gathered by the RSPCA in its investigations. I put on record my thanks to the RSPCA for its tireless work in this space right across our country.
The abuse of animals offends our deepest instincts of fairness and kindness. These animals are utterly blameless, yet uniquely vulnerable. The more animals Bea found in this predicament, the stronger became her conviction that the current system for preventing animal abuse is inadequate. One of Bea’s most pressing concerns is that the system fails to prevent animal abuse from occurring in the first place.
In short, Bea’s petition requests that those convicted of animal abuse be prohibited from owning animals again, and that their conviction be listed on a national register that can be accessed by breeders, charities, vets, local authorities and other appropriate organisations. In response, the Government have rejected the demands on the grounds that the current provisions are sufficient; I will return to those points later in my remarks.
Kevin Bonavia (Stevenage) (Lab)
I thank the petitioners for bringing this important issue to the House; I am very sympathetic.
Animal abuse comes in many forms, and we should also consider what sanctions owners who are irresponsible with their pets should face. In my constituency, we recently had a horrific case where an XL bully attacked a man and he ended up needing hospital treatment. Does my hon. Friend agree that people who cannot responsibly handle their animals are also committing a form of abuse and should be treated accordingly?
Jacob Collier
I think that is a separate issue, but legislation on XL bullies already exists and it needs to be properly enforced.
Animal abuse convictions are most often made under the Animal Welfare Act 2006, and sexual abuse is covered by the Crime and Policing Act 2026. An individual convicted under the Animal Welfare Act can face up to five years in prison and can be subject to a court-issued disqualification order preventing them from owning animals for the rest of their life, although the court decides the specific terms of the order.
The experts I spoke to in preparation for this debate—I thank Claire McParland, Dr David Martin and Mark Randell—agree that the current legislative framework is a significant improvement on the previous legislation, under which animal cruelty was largely prosecuted as criminal damage and sentences were often a little lenient for organised crime. The Government note in their response that all
“offences under the Animal Welfare Act 2006 are currently stored on the Police National Computer. This information may be shared with appropriate organisations”
and with members of the public in specific circumstances. However, the records of convictions under the earlier legislation are less comprehensive.
Under the current system, the reporting of suspected offences is an inevitable challenge. Most reports of animal abuse come from the public, which makes enforcement more reactive than preventive. One risk of a national register is that it could make people less likely to report, because they may assume that the authorities already have the matter in hand. Once the RSPCA begins to investigate a report, it can request information from the police about any previous convictions, but that process can be slow and there is no guarantee that the police will release the information. A dedicated national register would, of course, make that easier.
Another route through which animal abuse can be investigated is when police forces discover abuse while investigating other reports. Dr David Martin, who has decades of experience as an expert witness in animal abuse cases, stressed to me that the collaboration between the police and the RSPCA is very effective in England, Scotland and Wales. Local teams know who to call when they have a query or come across animal abuse in their day-to-day activities. On the other hand, Mark Randell, a former police officer who has spent decades campaigning for improvements to the police response to animal abuse, said that identifying animal abuse is not standardised across police forces, and understanding of how animal abuse fits into broader safeguarding varies greatly between police forces across the country. We should consider standardised training so that there is not a postcode lottery.
Despite the difficulties, the RSPCA successfully prosecutes hundreds of cases each year. Although disqualification orders are at the discretion of the court, the petition requests that bans be made automatic upon conviction. That might reduce instances of animal abuse, especially if coupled with a national register available to vets and rehoming charities. However, in a liberal democracy, we evaluate proposals for punishing crimes based not simply on how effectively they prevent recurrence, but on whether the punishment is proportionate, and it is not clear that automatic lifetime bans are proportionate.
An automatic ban has no regard for whether the perpetrator is entirely responsible for their crime. For example, they could be in a coercive or controlling relationship, or could themselves be a victim of abuse, which might drive them to inflict harm on animals. In such cases, it is harder to establish with certainty that they are responsible for the crime, so an automatic ban may be disproportionate.
Perran Moon (Camborne and Redruth) (Lab)
Across Cornwall, there are dozens of cases of animal abuse every year and animal abuse is a blight on our duchy, so I welcome the principle of an abuser register. Does my hon. Friend agree that we should not just add perpetrators to the register, but ensure that the threat of custodial sentences is strong enough that they know they will be punished for their crimes?
Jacob Collier
I agree. The threat of prosecution was strengthened by the 2006 Act, which has aided in preventing abuse. When the Government review the animal welfare legislation, they should take that into consideration.
A lifetime ban ignores the possibility that offenders may change their ways. In this country, we believe that those who break the law can be rehabilitated into law-abiding society. Imagine a case in which a child or young adult commits abuse against an animal. What if they are locking that animal in a cupboard to protect it from a violent parent? A lifetime ban would mean that they would be unable to have such a pet in their retirement, which feels disproportionate.
When the argument is considered from that perspective, the discretionary nature of disqualification orders appears to be a strength: judges have the freedom to consider the offender’s circumstances, which may have motivated the crime. None the less, it may be the case that disqualification orders need to be issued more regularly to prevent recurrence. Guidelines could be changed to make them time-limited orders when a certain level or kind of abuse has been committed.
As for the national register, the RSPCA has repeatedly stated that it is unreasonably difficult for it to access the history of an alleged offender. How the register works in practice must be considered carefully. Bea wants the register to be accessible to appropriate organisations, but not the general public, which would avoid giving rise to animal abuse vigilantism, the likes of which we have seen spreading on social media in other cases.
Alongside access, there is also the question of what information the register should contain. A public register may be less effective if it is simply a snapshot of past offending. As I noted earlier, convictions under the Animal Welfare Act are only part of the picture, and a register of convictions is not as detailed as the archive of RSPCA intelligence. Information must be comprehensive and up to date if it is to be truly effective for relevant agencies.
A more useful alternative might therefore be a disclosure scheme akin to Clare’s law, which enables police to disclose information about an individual’s history of violence or abuse where there is a credible risk to their partner. That scheme is on a statutory footing, requiring police forces to give reasons if they do not wish to make a disclosure. The family of Holly Bramley have been campaigning for an animal abuse register and police disclosure scheme since her tragic murder in 2023. Holly’s killer was a prolific abuser and killer of animals and he used the threat of animal abuse to control Holly. The link between animal abuse and domestic violence cannot be ignored, and it is key to this debate. We owe it to Holly to take action.
Paul Waugh (Rochdale) (Lab/Co-op)
My hon. Friend makes a valid link between the abuse of animals and of human beings. I thank the petitioner, Bea, for bringing this issue to this place, because it shines a spotlight on both forms of abuse. The RSPCA has reported that 71% of domestic violence victims suffer death threats to their pets, too. Does that not prove that we need to be more sophisticated in how we record crimes of animal abuse, so that we capture the wider sense that these people are a threat not just to animals, but to their wives, their partners and everyone else?
Jacob Collier
I absolutely agree with my hon. Friend. I was shocked by some of the evidence I heard while preparing for this debate about the link between domestic violence and animal abuse. As the Government consider the next steps, that must be key to their thinking. I understand that the RSPCA is in discussions with the Home Office and the Department for Environment, Food and Rural Affairs regarding a version of Clare’s law for animal abuse, and I would welcome an update on those discussions from the Minister.
In just three months, Bea’s petition has received more than 238,000 signatures, illustrating the depth of feeling across our country about abuse against animals. That feeling, together with the expert opinion of organisations such as the RSPCA, indicates that the current provisions against animal abuse are not adequate. An automatic life ban for convicted abusers appears to be a disproportionate response, though questions remain about whether disqualification orders are being used as frequently as they should be. A public register of convictions is similarly unsuitable. However, a version of Clare’s law for animal abuse might strike the right balance, allowing the appropriate agencies up-to-date access and intelligence when they need it, in order to intervene before abuse is committed. I thank Bea for creating this petition and allowing this necessary debate—my office is a prime candidate if she wants to conduct another spring clean.
Robert Jenrick (Newark) (Reform)
I begin by thanking Bea Elton and the near-quarter of a million petitioners who have brought this issue to the attention of the House of Commons. We are a nation of animal lovers; it is an essential part of the British psyche. We were the first country in the world to have an animal cruelty charity, which became the Royal Society for the Prevention of Cruelty to Animals. In fact, the RSPCA was created 60 years before a similar charity for children, which perhaps says something about the unique attachment we on these islands have to our animals. In 1822, we became the first state to create laws against animal cruelty, again before some prescient ones with respect to humans. Animal charities receive millions of pounds more every year than charities for children do. All of that tells us that the British love their animals; I certainly do.
I am here on behalf of my constituents to strongly back the petition and all that Bea and her fellow campaigners have achieved so far. It cannot be right that in a country like ours, where we have such a deep sentimental attachment to our animals, we allow people who have been known to abuse animals to take charge of them again. It should be the law of the land that if somebody has been convicted of knowingly abusing an animal, they are never in charge of one again. I strongly support the purpose of the petition.
Similarly, it is right that a register is created that is either in the public domain or, as a bare minimum, available to those who breed and sell animals—the ultimate guardians of animals, who entrust them to others—so that they can make sensible choices and not give animals to those who are known to have abused them. It is surprising that a register like that does not exist in our country already; it should do. If the petition spurs the Government to establish such a register, Bea and the quarter of a million people the length and breadth of the country who signed it will have done a good deed.
We must take better care of our pets and animals. That is obviously good for animals, but it is good for us as well. The tenderness we show animals should be something that we celebrate and take pride in when we visit other parts of the world that do not have the traditions that we have. It is part of, as I think Peter Singer described, the “ever-expanding circle of empathy” where, if we treat animals well, it will encourage us to treat humans in a similar fashion.
I will finish by again thanking Bea and all of the petitioners. I encourage the Government to take up the recommendations and to create a mandatory ban and a register that is available for all those who pass animals into the custody of their fellow citizens. That will ensure that we protect animals and increase and improve the world-class laws against animal cruelty that we have in this country.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
It is a pleasure to serve under your chairmanship, Dr Murrison. I congratulate my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier) on securing this debate on behalf of the Petitions Committee, and I thank all my constituents and everybody else who signed the e-petition. Of course, I also thank Bea, who is in the Public Gallery today, for bringing this issue to light.
This topic matters deeply to people across the country, including in my constituency. People expect those who cause suffering to an animal to face serious consequences. More than that, they expect the law to prevent another animal from ever being put at risk again. At home, our dog Foggy is a treasured member of our family, and that is how most people feel about their pets. They rely on us, they trust us and they absolutely deserve to be safe in our care.
I recently received a letter about today’s debate from a 13-year-old constituent, who is worried that someone convicted of animal abuse could go on to have another animal and cannot understand why someone who has already shown cruelty towards an animal should be given another opportunity to cause harm. It was a powerful letter, not because it came from a young person—although that certainly made it all the more striking—but because it put the matter so plainly: why should we wait until another animal has suffered before we act?
As we have heard, important powers are already available to the courts under the Animal Welfare Act 2006. Those convicted of an offence can be disqualified from owning animals, keeping them, taking part in their care, influencing how they are kept, dealing in them or transporting them. Those powers absolutely matter. Increasing the maximum sentences for the most serious animal cruelty offences was an important step forward, but the petition raises a fair question: is the current system clear, consistent and practical enough to stop people who have been banned simply going elsewhere and acquiring another animal? A conviction may be recorded and a disqualification order may be made, but what happens when someone approaches a rescue centre, a breeder or another organisation to take on an animal? How does that organisation know whether the person standing in front of them has a history of serious cruelty or has been banned by a court from keeping animals? At present, the answer seems far too uncertain.
Perran Moon
Does my hon. Friend agree that we surely need to close the loophole whereby banned owners can give their pets or farm animals to their wife or husband to own, and still live with them?
Lee Pitcher
Absolutely; there is no place for legal loopholes like that in our country, where we love our animals so much.
The Government have referred to the police national computer and to existing arrangements for information sharing. I recognise that there are important safeguards around personal information and data protection that we must be aware of, but a record held somewhere in the system is not the same as a practical safeguarding tool that can stop a banned person acquiring another animal. That is the point behind the petition, and it is a point that we should take very seriously. This Labour Government were elected on a commitment to strengthen animal welfare, including through action on puppy farming and smuggling, snare traps, trail hunting and hunting trophies. We should now look carefully at whether the animal protection provided after a cruelty conviction is strong enough in practice.
I believe there is a serious case for a properly governed national safeguarding scheme for those convicted of the most serious animal cruelty offences and subject to ownership bans. It would not need to be a public database. This should not be about naming and shaming people or allowing uncontrolled access to sensitive information; it should be a proportionate safeguarding measure, with clear rules on who can make a check, when they can do so, and what information they can receive. It can be managed, is what I am saying.
Animal rescue and rehoming organisations, veterinary professionals, local authorities, licensing bodies and responsible breeders should be able to establish whether an individual is prohibited from keeping an animal before an animal is placed in that person’s care. We rightly recognise that information sometimes needs to be shared to protect children, vulnerable adults and the wider public. I believe we should be willing to consider a careful and proportionate approach that protects animals from people with a proven record of cruelty or neglect.
The petition calls for automatic life bans following convictions for animal abuse or neglect. I understand why it has attracted such strong support. For the gravest cases, particularly those involving deliberate, sustained or repeated cruelty, the future protection of animals must be at the heart of the court’s decision. There should be a strong presumption that someone who has shown such serious cruelty should not be entrusted with the care of an animal again. Courts must retain the ability to consider the individual circumstances of the case, but where a serious offender receives only a short ban, or no ban at all, there should be clear reasons for that decision.
This is not simply about punishment; it is about prevention. Animal cruelty can be part of a wider pattern of harm, as we have heard. It can sit alongside coercive control, domestic abuse and violence within a household, which makes early identification and effective safeguarding even more important, so I ask the Minister to look carefully at what more can be done. Will the Government consider consulting on a national animal welfare safeguarding disclosure scheme, so that responsible organisations can check whether a prospective owner has been convicted of serious cruelty or banned from keeping animals previously? Will the Government consider whether the law should create a stronger expectation of lengthy and, where appropriate, lifetime ownership bans in serious and repeated cases? Will they also publish clearer information on the number of disqualification orders made, how long they last, how often they are breached, and what action is taken when they are ignored?
My 13-year-old constituent is not asking for anything unreasonable. They are asking for a system that works, before another animal is intentionally harmed. That is a basic test of whether our animal welfare laws are doing what the public expect them to do. For my 13-year-old constituent, for Bea, for all those who signed the petition and for every wonderful, beautiful animal we love, we should always try to meet that test.
Juliet Campbell (Broxtowe) (Lab)
It is a pleasure to serve under your chairship, Dr Murrison. I thank my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier) for his opening speech, particularly for talking about the link between domestic violence and animal abuse. I also thank the people from my constituency who signed the petition, and the petitioner for creating it.
Animal abuse is a particular type of cruelty for which perpetrators should be made accountable—but far too often, that does not happen. I was encouraged by the Government’s animal welfare strategy, which sets out a clear vision for improving animal welfare standards across the country. This Government are delivering the most comprehensive animal welfare programme in a generation, but we have the opportunity to go further. The Government could consider having a register of animal abusers and an automatic ban on ownership for all those convicted of animal abuse, to tackle the increased number of cases and reported cases that we are seeing today. In 2024, the RSPCA reported a heartbreaking increase in cases of animal and pet abuse, with their emergency line taking more than one call every 16 seconds. Therefore, I can only support the petition.
Although courts can disqualify individuals from ownership once they are convicted of animal abuse, there is no central register on which charities, vets or businesses can check if someone is banned from keeping animals before selling or rehoming to them, or even employing them to take care of animals. The Government have said that having a public register would not be appropriate, because it would run the risk of exposing a person on the register to vigilantism. However, a closed register that is only accessible by, for example, vets, breeders and charities could remedy that problem. A closed register, alongside a mandatory ban, would serve as a deterrent to animal abusers, especially repeat offenders.
Statistics show that abuse of pets is on the rise, and I have been made aware of an increase in animal abuse content being shared online, so I can only support the petition. The vast majority of pets are not simply animals to us, but members of our families. We recognise that although animal cruelty is on the rise, it is the exception; many pets across the country can safely rely on their owners for consistent care, safety and kindness. However, all animals deserve the best lives possible, so I ask the Government to build on the foundations that they laid in the animal welfare strategy.
Josh Newbury (Cannock Chase) (Lab)
It is a pleasure to speak with you in the Chair, Dr Murrison, for what I think is the first time. I thank my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier) for, as always, introducing the debate so thoughtfully as a member of the Petitions Committee. I also thank the 386 animal lovers in my constituency who added their names to the petition. Colleagues may have been hoping to have an animal welfare debate without hearing from me, but I am afraid that today is not that day.
The petitions that we debate are not often started by social media influencers, but it is because of the determination of Bea Elton—known to her millions of followers, myself included, as Clean with Bea—that we are able to debate this important issue today. I will forgive hon. Members who have not yet watched Bea’s videos if they are on their phones throughout my speech. Bea offers free home cleaning to people in deep crisis or with severe hoarding tendencies. Sadly, she often comes across animals that have been neglected and have had to live in awful conditions. I am glad that Bea has used her experience and platform to bring the issue to Parliament. I hope that we can focus on the art of the possible, as I know that preventing the needless suffering of animals unites us all, across the political spectrum.
Last autumn, I went on a ride-along with Sophie, an RSPCA inspector, to see what a day looked like for her. My constituency is full of pet owners, and who can blame them—why would anyone who lives somewhere as beautiful as Cannock Chase not get a dog as motivation to explore our stunning scenery together? However, I admit that I do not have a pet, not because I do not love animals, but because I could not give one the time and attention that it deserves—I often joke that I have two young kids and that is enough for now.
This debate comes down to the fundamental fact that owning a pet is not a right; it is a privilege and a responsibility. The time I spent with Sophie reinforced that. Like many people, I assumed that most of an RSPCA inspector’s work involved rescuing animals from awful situations—and of course, they do that, in tandem with the police—but what surprised me was how much of their time is spent trying to stop animals reaching that point in the first place. Inspectors spend hours following up with owners after advising them that a pet needs veterinary treatment, for example, and they work closely with local vets to check whether animals have actually received the care that they need. Most owners do the right thing, but when somebody repeatedly ignores inspectors’ advice and an animal continues to suffer because treatment has been withheld, concerns rightly begin to escalate.
One thing that has stayed with me from that day is that many cases of animal abuse reveal something far deeper. Inspectors told me that they often encounter people whose lives have unravelled. That might be because of relationship breakdown, domestic abuse, as we have heard, physical illness or mental ill health. None of that excuses neglect, but it reminds us that animal welfare is often connected to the wider challenges in somebody’s life.
We also know, as we have heard, that the relationship can work the other way. The Ruby’s law campaign highlighted that perpetrators of domestic abuse may threaten or harm family pets as a means of coercion and control, knowing exactly how much fear and distress that causes. Nine in 10 people experiencing domestic abuse in England and Wales reported that animals were also abused by the perpetrators, so protecting animals is not separate from protecting people; sometimes it is part of the very same task. That is why partnership between organisations is so important. The RSPCA, as we know, does not have the power to seize animals, so it relies on the police following its investigations, and inspectors cannot force entry into a property if access is refused.
The experience left me with one clear thought: our system does a reasonable job of responding once abuse has happened, but I am not convinced that it does enough to stop the next animal becoming a victim. As hon. Members have highlighted, the Government’s response to the petition states that convictions for animal cruelty are already recorded on the police national computer and that courts have the power to disqualify offenders from keeping animals. That is absolutely true, but rescue centres, breeders and pet shops cannot routinely check those records, so somebody who has already been banned from keeping animals can walk into one of those organisations, appear perfectly respectable and walk out with another pet simply because the people rehoming the animal have no way of checking whether that person has been disqualified. That does not mean the law has comprehensively failed; it means there is a gap in the system.
Breaching a disqualification order is an offence, but somebody has to discover that breach first. Given the demands on our police and local authorities, we should not be relying on chance or left hoping that somebody will spot what has happened when another animal is already suffering. Surely it is better to stop the animal being placed there in the first place.
I understand the Government’s concerns about privacy when it comes to a public register, but there could be a sensible middle ground, as hon. Members have already outlined. If a register was available to verified rescue organisations, breeders and licensed pet sellers, it would allow them to check whether somebody is currently subject to a disqualification order before an animal is handed over. It would not be to name and shame, or to publish personal information, but to answer one simple question: can this person legally keep and care for an animal?
Mark Sewards (Leeds South West and Morley) (Lab)
My hon. Friend is making such a powerful speech that I did not want to interrupt, but I spoke to volunteers at the East Ardsley RSPCA in my constituency the other week. They told me that they have to endure abuse from people who accuse them of not taking care of animals, because people have reported cruelty to them, but the volunteers do not necessarily have the powers to act. If the RSPCA and other organisations had access to a database, that would solve that problem. Will my hon. Friend also take the opportunity to commend the RSPCA in my constituency for all of its outstanding work?
Josh Newbury
I will never miss an opportunity to thank the RSPCA, including in Leeds South West and Morley and the East Ardsley centre. My hon. Friend is right that RSPCA staff and volunteers often face abuse themselves because many people are rightly passionate about protecting animals, but it is important to remember that their powers are far more limited than perhaps many of us realise. They are as determined as anybody to do the right thing by animals, so we need to make sure that they are given as many powers as are appropriate and that we support them in doing their important work. The enemy are the people who commit the abuse, not the people who try to help.
The Government are right that judges should retain discretion over the terms of disqualification orders. Every case is different, and rehabilitation should always remain possible where appropriate, but once someone has been convicted of egregious animal abuse, a ban should be automatic and should have a practical effect. The petition is not asking us to reinvent the wheel. The convictions already exist and the courts already have the powers. All we are asking is to close one obvious gap in the system so that trusted organisations have the information they need to stop known offenders acquiring another vulnerable animal. I say to the Minister that if that change could prevent even a handful of animals suffering, it would be a step well worth taking.
Dr Danny Chambers (Winchester) (LD)
It is an honour to serve under your chairship, Dr Murrison. I thank the hon. Member for Burton and Uttoxeter (Jacob Collier) for introducing this hugely important debate; the petitioners and Bea Elton for getting so many signatures, which is why we are discussing this issue; and Holly’s family, who are turning an absolute tragedy into something that could have a positive legacy. That is very courageous.
In my many years of working in veterinary practice, one observation always stuck with me: how people treat animals is often a reflection of how they treat the people closest to them. People who treat animals with unfailing kindness tend to be some of the kindest people you will ever meet. If people deliberately inflict suffering on a defenceless animal, it is often a warning sign that that violence will extend beyond the animal and into the home. We do not know what goes on behind closed doors.
Ben Maguire (North Cornwall) (LD)
I congratulate my hon. Friend on being a fantastic animal champion; he has done fantastic work on puppy smuggling. Does he agree not only that there should be stronger sentencing powers, but that those with a proven track record of serious animal abuse and harm should face complete ownership bans?
Dr Chambers
I totally agree. We should be clear that, as other hon. Members have pointed out, there is a very big difference between someone who causes suffering to an animal for a variety of reasons, such as mental health issues or ignorance, or through neglect, and someone who deliberately causes harm to an animal because they have a sadistic personality or want to feel powerful. In this debate, it is important to consider the motivation behind causing the suffering: if someone causes deliberate suffering, it indicates that they may well cause harm to other people around them.
As a vet, it is always unsettling to treat a dog with a broken rib that could have resulted from a kick when the owner says that it fell down the stairs, for example. That is a very unusual thing for a dog to do, and it would be very unusual to break a rib as a result. My concern in those situations, beyond treating the animal in front of me, extends to the people living in closest proximity to the person who has brought in the dog. We know that people sometimes even coerce their partner to stay with them instead of leaving by threatening to harm their pet. On that note, I pay tribute to organisations such as Trinity in Winchester, which has a refuge for people fleeing domestic abuse that allows them to take their pets with them, because that is a barrier to people escaping that situation. Cats Protection and Dogs Trust have very similar schemes, and they are hugely important.
As vets, we are trained to recognise the early signs of diseases so that we can treat them before they become irreversible, and I believe we should take the same approach to violence. Animal abuse is not always an isolated act of cruelty; sometimes it is the first symptom of something much more dangerous. That is why I take every opportunity to discuss the important work of the Links Group, which highlights the evidence linking animal abuse with domestic abuse and other forms of violence.
I ask the Minister to consider three measures. First, when someone has been convicted of abusing an animal, that information should be disclosed under the domestic violence disclosure scheme, commonly known as Clare’s law, where it is relevant to protecting someone at risk. If animal abuse predicts domestic violence, that information must be available to all those who need it. The issue at the moment is that the abuse of an animal is often prosecuted under animal welfare laws and does not show up when people look for historical allegations of or convictions for domestic violence.
Secondly, anyone convicted of sexually abusing an animal should be automatically placed on the sex offenders register. At present, such convictions under animal welfare legislation carry no referral to public protection mechanisms. That means that if someone has sexually abused an animal, they are prosecuted under animal welfare laws and there is no way of tracking them, although they have a higher likelihood of committing sexual violence against other people as well. That cannot be right; it is an anomaly that this House should fix. Thirdly, anyone convicted of deliberately abusing an animal should be prohibited from owning animals in the future. The courts should have the powers to impose long-term or, where appropriate, lifetime disqualification orders.
Holly’s killer had abused animals since the age of eight. He had admitted it and the RSPCA knew about it, but the legal and justice systems that are in place did not allow anyone to join those dots. We cannot allow that to happen again. By clamping down hard on deliberate animal abuse, we can protect women, spouses, children and animals from future harm.
Aphra Brandreth (Chester South and Eddisbury) (Con)
It is a pleasure to serve under your chairmanship, Dr Murrison. This is an important debate, and I thank Bea for highlighting the issue through the petition.
We have had many contributions. The hon. Member for Burton and Uttoxeter (Jacob Collier) clearly set out the background to the petition and the challenges in identifying and enforcing convictions for animal abuse. The right hon. Member for Newark (Robert Jenrick) highlighted the importance of and the care that we all feel for our pets and animals. The hon. Member for Doncaster East and the Isle of Axholme (Lee Pitcher) discussed the need to think about prevention alongside punishment.
We are all united in our shared belief that any case of animal cruelty is completely unacceptable. As an animal lover, I am deeply committed to doing what I can in this House to raise awareness, to legislate and to support efforts to prevent animal cruelty. I am therefore proud to be part of a Conservative party that has a strong record on animal welfare from our time in government. We passed legislation including the Animal Welfare (Livestock Exports) Act 2024, which bans the export of live animals for slaughter, and the Animal Welfare (Sentencing) Act 2021, which increased the maximum prison sentence for animal cruelty from six months to five years. The last Government also introduced the Animal Welfare (Sentience) Act 2022, the Animals (Penalty Notices) Act 2022 and the Glue Traps (Offences) Act 2022.
I will mention one more piece of legislation, passed since the July 2024 election and introduced by a Conservative MP—me. The Dogs (Protection of Livestock) (Amendment) Act 2025 shows our ongoing commitment to animal welfare. I was pleased to introduce that legislation to update the laws surrounding livestock worrying, by increasing the fine where dogs attack livestock and giving the police more powers to investigate instances of livestock worrying. I am grateful to hon. Members from across the House who supported the passage of that Act.
Sir John Hayes (South Holland and The Deepings) (Con)
I apologise to the hon. Member for Burton and Uttoxeter (Jacob Collier), who introduced the debate, that I was not here at the outset; I have already apologised to you, Dr Murrison. I rise simply to highlight the association between animal cruelty and domestic abuse, which was highlighted earlier. Annette Bramley is my constituent. Her daughter Holly was killed by a wicked husband who is now enduring life in prison, although of course in a better age he would have been executed.
The connection between animal cruelty and domestic abuse is proven; I have the facts and figures, and I am happy to give them to my hon. Friend the Member for Chester South and Eddisbury (Aphra Brandreth) and to the Minister, but I will not bore the Chamber with them now. They illustrate that a huge proportion of those who are cruel to people have also been cruel to animals: there is an association that would allow us to deal with risk more effectively.
I have been working with the Government on this issue and I commend them for that work, but I wonder if the Minister can address it in his speech. It is important that we know where the Government are on that work, whether it can be done within existing legislation, or whether it will require further secondary or primary legislation.
Aphra Brandreth
I thank my right hon. Friend for speaking so eloquently, as he always does. I will come on to the case of his constituent and pay tribute to the work that she is doing in due course.
Because of the widespread commitment to, and support for, reducing animal cruelty, the UK has some of the highest animal welfare standards in the world, and it is right for us to cement our status as a global leader by continuing to raise the bar. It does not surprise me that the petition we are debating today has received over 230,000 signatures, because I know this is an issue that many of our constituents rightly feel strongly about. In my constituency, 328 people have added their names to it.
Existing provisions ensure that all prosecutions for animal cruelty offences under the Animal Welfare Act 2006 are stored on the police national computer. That information can be shared with appropriate organisations at the police’s discretion. However, there are some points that I would welcome the Minister’s thoughts on. What assessment has he made of the arrangement under the 2006 Act? For example, is there consistency in decisions as to when data is shared? How regularly is data being shared? Where is it being shared? Importantly, is it helping to prevent incidents of abuse?
I want to turn to the connection between animal abuse and domestic violence, because, sadly, there is a link, and perpetrators of animal abuse too often also abuse people. That has been highlighted by cases such as the tragic murder of Holly Bramley, as we have heard, which has not only boosted awareness, but increased demand for a public register. I commend her mother Annette for turning an unimaginably difficult situation into a campaign that honours her daughter’s legacy and focuses on ensuring that the link between animal and domestic violence is properly recorded.
The RSPA highlighted that 2.3 million adults experienced domestic abuse in 2024, and 71% of victims reported a threat to their pets. Figures such as that should give us serious cause for concern. What steps is the Minister taking to work with ministerial colleagues in the Home Office to ensure a cohesive approach to tackling the link between animal and domestic abuse?
I want to recognise the important work being done by the veterinary profession to highlight that link—I draw attention to my entry in the Register of Members’ Financial Interests as someone who is married to a veterinary surgeon and as an owner of a veterinary business. The work of the Links Group, which is chaired by Dr Paula Boyden, former veterinary director of the Dogs Trust, is helping to inform vets on the frontline who may be exposed to cases that need action. I hope the Minister will join me in acknowledging the importance of that work and outline whether the Government are engaging with the veterinary profession, including the Links Group, the British Veterinary Association and other stakeholders, to support that work.
Pets are too often used as a means of coercion and control against those experiencing domestic abuse. That is why it is so important that anyone suffering at the hands of an abuser knows that support is available. Earlier this month, I attended the Cats Protection drop-in in Parliament where, among other things, it highlighted the work of charities that provide temporary foster care for pets when someone is fleeing domestic abuse. That support can make the difference between someone remaining in an abusive relationship for fear of leaving a beloved pet behind and having the confidence to escape to safety. Does the Minister agree that those are exactly the kinds of initiatives we should be championing to raise awareness of this issue? Will he outline what steps the Government are taking to improve public awareness of the links between animal abuse and domestic abuse, including the use of threats or harm to pets as a form of coercive and controlling behaviour?
I am sure that all Members will encourage anyone who is experiencing domestic abuse or worried about animal abuse to come forward and seek help. Police forces, including Cheshire constabulary in my area, have safe ways for people to report abuse, and I want anyone listening to this debate to know that you do not have to face it alone; help is available and I urge you to reach out. If we raise awareness of the link between animal and domestic abuse, and improve the sharing and recording of information, I believe that we can identify abuse earlier, protect more victims and prevent further harm. Ultimately, that is what every one of us in this House wants to achieve.
Although the Government have said in their written response to the petition that they will not introduce a public register, given the number of U-turns that have been made thus far, I am not certain whether that position can be relied on. However, what is certain is that anyone who is abusing animals or using the threat of animal abuse for manipulation must be prosecuted and face the consequences of their despicable actions.
The Minister of State, Department for Environment, Food and Rural Affairs (Stephen Morgan)
It is a pleasure to serve under your chairship, Dr Murrison. I congratulate my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier) on opening this debate on behalf of the Petitions Committee and thank him for the thoughtful way he set out the issues raised in the petition. I also thank all right hon. and hon. Members for their contributions on establishing a public register for animal abusers and the automatic ownership ban.
The petition has attracted significant public support, with more than 235,000 signatures, clearly demonstrating how strongly people across the country feel about protecting animals. I commend the tireless campaigning of Bea and her supporters. As a dog lover—and the owner of 11-year-old labradoodle Albert Attlee, who brings real joy to my family and me—I share the petitioners’ deep concern about animal cruelty. People want to see animals treated with care and respect.
We are a nation of animal lovers, and I represent a party with a proud track record of delivering meaningful protections for animals. From introducing the landmark Hunting Act 2004 to strengthening safeguards for domestic animals through the Animal Welfare Act, Labour has consistently led the way in placing animal welfare at the heart of the Government agenda, because we believe that how we treat animals reflects the kind of society we are.
However, we must also confront the harsh reality that animal abuse still occurs often and in deeply distressing ways that shock the conscience and undermine the values we hold dear as a nation. Cases of neglect, cruelty and deliberate harm continue to surface, reminding us that the protections we have in place, while important, are not always enough to prevent suffering or deter repeat offending. That reality drives the strength of feeling behind this petition. Where abuse occurs, we want animals to be protected, offenders to be held accountable and to make sure that further harm is not caused. The challenge is not whether to act, but how best to achieve lasting protection for animals.
I will first address the proposal for automatic lifetime bans on animal ownership. Under the Animal Welfare Act 2006, courts can impose disqualification orders preventing individuals from owning, keeping or caring for animals. In the most serious cases, these bans can be imposed for life. It is for the courts to determine the appropriate sanction based on the specific facts of each case. Judicial discretion is not a weakness in the legislation; it is a strength. It enables courts to impose the strongest possible restrictions where they are needed, while ensuring fairness and proportionality. Introducing an automatic lifetime ban in all cases would remove that discretion.
I now turn to the proposal for a public register of animal abusers. I understand why there is public support for the idea, and the reassurance it is intended to provide, but there are already systems in place to record and share this information when it is right to do so. Convictions under the Animal Welfare Act 2006 are recorded on the police national computer, and enforcement bodies such as the police and local authorities have access to that information.
There are also established disclosure mechanisms that allow the police to share relevant information with those who need it. That means relevant information can be used where it is needed for licensing, safeguarding or public protection. A publicly accessible register, however, could create serious risks, including the potential for harassment and misuse of personal data. The more effective approach is targeted disclosure, ensuring that relevant information is shared lawfully, proportionately and with the appropriate bodies at the right time.
I also recognise the concerns raised by campaigns such as Holly’s law and Ruby’s law, which Members have raised today. They speak to a serious issue: the link between animal abuse, domestic abuse and coercive control. The Government take that link very seriously. Statutory guidance under the Domestic Abuse Act 2021 already recognises that pets can be used to control, coerce, threaten or distress a victim. DEFRA is supporting wider, cross-Government work in this area, led by the Home Office and the Ministry of Justice. I assure Members that I will continue that cross-Government work.
Our focus is on better awareness, appropriate information-sharing, pet fostering, veterinary awareness and stronger microchipping safeguards. That is why the right information must reach the right people at the right time through lawful and targeted safeguarding routes.
Sir John Hayes
I am grateful for the Minister’s indulgence, given that I was not here at the beginning. He is right that the sharing of information is critical among all the agencies that deal with domestic abuse and animal cruelty, but the Government may need to weave this into their bigger piece of work, which he will be aware of, on risk—dealing with risk in a rather different way, reinforcing some of the existing guidance and possibly even statute. We spoke about Holly’s law, which does not necessarily need to be primary legislation, but does need to have statutory force. Statutory guidance may be the answer in this respect. I do not prejudge that; I simply put it on the record for the Minister to discuss with his compatriots in the Home Office and the Ministry of Justice.
Stephen Morgan
The right hon. Member is a tireless champion on these issues, having met the former Safeguarding Minister in the Home Office and written to Baroness Hayman following his business question last year. I assure him that officials are continuing to work across Government on the points that came out of his meeting with the Minister, and I will certainly take away the points that he just raised.
Dr Chambers
I totally understand the need for safeguards so that disclosures are not used as an excuse for harassment or inappropriate release of data. Sexually abusing an animal does not mean that someone is on the sex offenders register, and the committing of deliberate acts of violence against an animal would not automatically be included in domestic violence disclosure; but, given the way that information is recorded and stored currently, even if the police wanted to and thought it appropriate, it is unlikely that they would be able to disclose it. Would the Minister meet me to discuss how we ensure that these offences are at least recorded in a way that means that they could be disclosed if deemed necessary and appropriate?
Stephen Morgan
I thank the hon. Member for the insight that he, as a vet, brings to the debate. I am very happy to take his suggestions and views back to the Department. He will know that animal welfare is not within my portfolio—it is the responsibility of Baroness Hayman—but I will take back his suggestions and concerns and explore that further.
Stephen Morgan
I will make some progress, but I am happy to take away the action and share it with my ministerial colleague.
We heard at the start of the debate that, more broadly, the Government are committed to strengthening animal welfare protections and raising standards across the system. That is why, last December, we published our ambitious animal welfare strategy for England. This strategy is not a short-term list of individual measures but a long-term plan to improve welfare, prevent poor welfare earlier and support a more joined-up approach. It includes practical action to promote sensible, responsible pet ownership, tackle puppy smuggling, end low-welfare puppy farming and explore further protections.
That matters, because many welfare problems begin long before prosecution is brought. They can start with poor breeding, poor socialisation, lack of knowledge or owners unable to meet an animal’s needs. By addressing those causes earlier, we can reduce the risk of animal suffering and reduce pressure on enforcement bodies later on.
Of course, enforcement remains vital where poor welfare or cruelty does occur. Local authorities, the police and animal welfare organisations all play an important part in protecting animals and holding offenders to account. As we have heard, the RSPCA alone secured more than 1,000 prosecutions in 2024, which shows the scale of that continuing work. That is why the Government’s approach is both practical and preventive. We want to stop animals suffering wherever we can, not only respond once harm has already happened. That means helping owners to understand their duties, providing early advice and ensuring people know where to turn before welfare problems escalate. It also means improving traceability through stronger microchipping and better records so that lost animals can be reunited with their owners, and that irresponsible breeders or owners cannot avoid accountability. Taken together, those measures provide a clear direction, prevent cruelty earlier, target enforcement where risk is greatest, and protect animals through proportionate, workable and lawful safeguards.
I thank all right hon. and hon. Members for their thoughtful contributions and for speaking so passionately on behalf of their constituents and those who signed the petition. I commend the work of the RSPCA and all organisations that support animal welfare across our country. The Government are clear about our commitment to protecting animals from cruelty, neglect and exploitation, and to ensuring that those responsible are held properly to account. Courts have the power to impose lifetime bans where appropriate, and it is right that they retain the discretion to do so.
Although we recognise the good intention behind the calls for a public register, the risks outweigh the benefits. Targeted disclosure remains the most effective approach. We are continuing to strengthen enforcement by supporting local authorities on how to utilise the tools available to them more effectively. We will continue to deliver our animal welfare strategy, which will improve the lives of millions of animals across our country. I look forward to continuing to work with colleagues and stakeholders to ensure the highest possible standards of animal welfare.
Jacob Collier
I thank all right hon. and hon. Members for their contributions. It is great that there has been cross-party support. I hope Bea is happy about that, because that does not always happen in this place, but I think that is because we are a nation of animal lovers, as the right hon. Member for Newark (Robert Jenrick) said.
My hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher) asked whether the current systems are enough to stop a convicted animal abuser from simply buying another animal, and I think the answer is no. The Minister says that the Government want a disclosure scheme, but we need to consider how that would work in practice.
My hon. Friend the Member for Camborne and Redruth (Perran Moon) spoke about partners being able to buy pets. The Government should look at that loophole, but the Minister did not mention it in his speech.
I am always keen to hear from my hon. Friend the Member for Cannock Chase (Josh Newbury)—particularly when he makes insightful points and people think it is me making them. What he said about trusted organisations having access to some kind of register was very important.
I pay tribute to the work that the hon. Member for Winchester (Dr Chambers) has done as a vet. He spoke with great authority about people’s motivation for this crime. He talked about deliberate suffering and the warning signs of domestic abuse. As the Minister investigates this area more closely, I encourage him to work across Government with the Home Office and the Ministry of Justice.
I hope Bea has enjoyed the debate. I thank her very much for starting the petition and I thank the quarter of a million people who signed it. Hopefully, we have some good action to take forward.
Question put and agreed to.
Resolved,
That this House has considered e-petition 759783 relating to a public register of animal abusers and automatic ownership bans.
NHS Breast Screening
(1 day, 4 hours ago)
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Irene Campbell (North Ayrshire and Arran) (Lab)
I beg to move,
That this House has considered e-petition 742179 relating to NHS breast screening.
It is a pleasure to serve under your chairmanship, Mr Vickers. I would like to start by thanking the petitioner, Gemma Reeves, for all the hard work she has put into starting the petition and gathering over 106,000 signatures from across the UK. The petition is titled “Lower the age for invites to regular mammograms to 40 & perform annually”, and says:
“Lower the age for when you are first called to 40 and provide funding to carry out Mammograms Annually instead of every Three Years.
Early detection is key and the prevalence of Breast Cancer in young patients is rising.
I am a Chemotherapy Nurse and working in this Clinical Setting for 8 Years and I have seen a rise in Breast Cancer in Patients under the Age of 40 increase.
Early detection is key in identifying those Aggressive forms of Breast Cancer”.
This is an issue that many people here and outside the Chamber care deeply about. Breast cancer still affects too many women, and far too many women die from it every year. I had the privilege of meeting with Gemma, who is here today. She told me about her experience of being a nurse for 15 years, eight of which have been in oncology, and about her concerns from having seen a rise in breast cancer cases in younger women, especially since covid.
Breast cancer is the most common type of cancer for women in the UK—one in seven women may get it. As Gemma wrote in her petition, “Early detection is key”, and has led to improved recovery and survival rates. Over half of breast cancer cases occur in women outside the national screening age, and one in six occur in women under 50. Men, too, get breast cancer; however, they make up approximately 1% of all cases. Currently, the NHS invites women to come to their first breast screening between the ages of 50 and 53, and this goes on until they are 71. They are invited every three years, after which a woman can choose to continue going for mammograms, but will not be automatically invited. Although everyone is at risk of breast cancer, women are at a higher risk if they are over 50, have dense breast tissue, have a family history of breast or ovarian cancer, or have particular breast conditions, for example benign breast disease.
There is a breast screening pathway for those identified as NHS-targeted very high risk. It is also important to note that NICE guidelines recommend annual mammography scans for women aged between 40 and 49 at moderate risk, as well as annual mammography or MRI surveillance for some high-risk groups.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for securing this debate. Unfortunately, many women are diagnosed with this cancer each year. Invasive lobular breast cancer accounts for some 15% of all breast cancer cases, yet it is routinely missed until it reaches an advanced stage. Hundreds of members of this House have backed the call for a dedicated £20 million five-year research investment into the fundamental biology of lobular cancers. Does the hon. Lady agree that the Minister—I believe she is sympathetic to this—must undertake to incorporate advanced screening technologies, such as contrast-enhanced mammography or MRI, into the NHS pathway for women with dense breast tissue or a suspected lobular profile? The Government must grasp the issue and do something now.
Irene Campbell
I thank the hon. Member for his intervention. I, too, look forward to hearing the Minister’s response on that issue.
Some 1.94 million women between the ages of 50 and 70 were screened in 2024-25, and almost 20,000 cancers were detected. Cancers were detected in nine in every 1,000 women, which is a 16% increase on the previous year. Attendance to screening reached the highest level in a decade and has been championed by charities such as Breast Cancer Now, which shares public figures, stories and personal messages.
Peter Fortune (Bromley and Biggin Hill) (Con)
I thank the hon. Member for securing this important debate. Does she share my concern about the difference between the numbers of first-time attendees to screening and returning attendees, at 89.1% and 63% respectively? Does she have a view on how we can increase the number attending their first screening?
Irene Campbell
Screening is key, and we have to be bolder and more inventive about how we get people along to screening. There have been many public health campaigns over the years. After a campaign, there is always a rise in attendance, but when the campaign stops, attendance falls again, so I agree that that is something that the Minister must look at.
Patricia Ferguson (Glasgow West) (Lab)
The hon. Member for Bromley and Biggin Hill (Peter Fortune) makes a valid point. Is my hon. Friend aware that between 2020 and 2023, more than three in four women in Scotland took up their screening invitations? However, take-up is varied based on deprivation: 64.2% of women in the most deprived areas attended, compared with 82.8% in the least deprived areas. Breast cancer survival rates reflect that; women from more deprived areas in particular are more likely to die at an earlier age, because they have not been for screening and are diagnosed late. Making screening available to people in innovative ways is important, but so too is screening people in their neighbourhoods. Does my hon. Friend agree?
Irene Campbell
I fully agree with my hon. Friend. Unfortunately, that is not just the case for breast screening; bowel cancer screening is lower in areas of economic and health deprivation. We must look at how we target those populations.
It is key that we continue to increase awareness of the importance of routine health appointments and modifiable risk factors. Although screening is increasing generally, the NHS breast screening programme found that one in three women still do not take up their offer of screening. As my hon. Friend said, it is key that we continue with strategies that promote the uptake of screening in areas of lower attendance such as by running awareness campaigns, sending reminder texts and deploying mobile screening units, among other strategies. In preparing for this debate, I met Breast Cancer Now, as well as CoppaFeel!, the UK’s only youth-focused breast cancer awareness charity. They call for more screening of women who have a higher risk of breast cancer, as well as providing women identified with wraparound support.
Diagnostics are key to identifying those with breast cancer successfully, although mammography is not always the best diagnostic tool, particularly for younger women and those with dense breast tissue, so it is important to invest in other diagnostics, such as MRIs, and to consider their capacity to be scaled and expanded. Younger women tend also to have denser breasts, which mammograms are worse at analysing as the scans are harder to interpret. That can lead to women having repeated scans and extended investigations.
It is important to note that most European countries screen for breast cancer between the ages of 50 and 69, although there is some variation in age ranges and frequency, with countries such as Albania, Iceland and Sweden starting screening at 40. Although breast cancer diagnoses for women under 40 are rarer, and about 4% of breast cancer cases in the UK are in women under 40, when young women get breast cancer, they are much more likely than older women to have a family history of breast cancer and genetic mutations that are associated with increased risk.
There is an ongoing trial called AgeX, which is looking at the benefits of regularly screening women aged 47 to 49 and aged 71 to 73, given how little is known about screening women outside the ages of 50 to 70. The trial took place from 2009 until 2020, and 4 million women took part. The first report to come out of the trials is due in December 2026 and the final report is due in 2031, so it will be a few years before we know its findings. Other trials include the UK age trial, led by Professor Stephen Duffy, which looked into the effectiveness of annual mammographic screening for women in their 40s and found that the mortality benefit was greatest for the first decade after screening started.
Mr Will Forster (Woking) (LD)
I am proud to have Walk The Walk—one of the country’s leading breast cancer charities, which has raised a huge amount of money and awareness—in my constituency. It is pushing for mammogram testing to be extended. Does the hon. Lady agree that extending it to the under-40s and the over-70s could have a notable effect on fighting this deadly cancer?
Irene Campbell
I agree, and I look forward to hearing the Minister talk about how we can take this forward.
The UK National Screening Committee is still concerned about false positives, overdiagnosis and over-treatment. In 2012, Sir Michael Marmot chaired an independent review of breast screening, which found that the current UK screening programme prevents about 1,300 deaths from breast cancer annually. However, he also found that overdiagnosis meant that, for every death prevented by screening, about three women are treated for a cancer that they do not have. As breast cancer is less common in younger women, there is a concern that overdiagnosis would be much higher in that age group. False positive results can induce long-lasting anxiety and an unwillingness to attend future screenings. It is important that screening programmes accurately weigh up the balance between potential harms and benefits. I am sure we will hear more about that in the debate.
It is a common misconception that breast cancer is not a problem any more, but more women die from breast cancers than from other cancers. We need to do more to look after women in their 40s and women under 40. We need risk-adapted screening to better improve our chances of early detection in the most vulnerable. I look forward to hearing from other Members and the Minister.
Several hon. Members rose—
Martin Vickers (in the Chair)
Order. I remind Members that they should bob if they wish to contribute—as they are doing. I will not impose a time limit at this stage. If you stick to about five minutes each, we should accommodate everyone.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
It is a pleasure to serve under your chairmanship, Mr Vickers. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) on introducing the debate, and I thank everyone who signed the petition. Behind every signature is a person, a family member or a friend, who has faced the frightening possibility that cancer may be found too late. They may even have lost somebody because it was found far too late.
In Bawtry in my constituency, local people have painted the town pink over the last few years during Breast Cancer Awareness Month. They have also taken the time to promote a simple message inspired by the movie “Legally Blonde”: bend and check. It is a powerful reminder that awareness, confidence and early action can save lives. I am really glad that Epworth may also be turning the town pink later this year under Kim Penfold, who is getting shops to join in and turn their fronts pink to raise awareness of early detection and screening.
The petition calls for routine breast screening to begin at 40 and to take place annually. That is a serious and understandable ask, but we must be guided by the evidence as well as the strength of feeling. The current NHS programme invites women to be screened every three years from the age of 50 until their 71st birthday. The independent UK National Screening Committee has advised that, on the evidence currently available, lowering the age or increasing the frequency of screening could bring harm as well as benefits, as we heard from my hon. Friend. Mammograms can be less accurate for younger women with denser breast tissue, increasing the risk of false positives and unnecessary tests and treatment. However, UK Age trial findings from a study of 160,000 women over 20 years show that annual mammograms for women in their 40s significantly reduces breast cancer deaths, saving a life for 1,000 women screened—one life, millions of memories.
We cannot stand still. The question raised by this petition is therefore entirely legitimate. I would be grateful if the Minister confirmed when Parliament can expect the UK National Screening Committee to consider the final AgeX trial findings and how the evidence on additional screening for women with dense breast tissue will inform future decisions.
We must also focus on the women already entitled to screening, as about three in 10 eligible women do not take up their invitation. This Labour Government’s work on digital innovations, mobile units, targeted outreach and more accessible equipment is welcome, but it must reach women in deprived communities, rural areas and communities where uptake is at its lowest.
Leigh Ingham (Stafford) (Lab)
I recently visited the new breast care unit at County hospital, where Michelle Ellits and Mr Sekha Marla gave me a fantastic tour. One of the things they spoke about was having separate areas as people walk into the breast care unit for those who are having treatment for breast cancer and those who are there for a mammogram, because it scares women to go to the unit if they are not confident about what they are there for. Does my hon. Friend agree that although more scans, more mammograms and better support are important, something as fundamental as building design is integral in making sure that women take up the offer to get their mammogram?
Lee Pitcher
My hon. Friend makes a valid point. The environment that people first walk into makes a massive difference in how they feel about their screening. I went to one of those units with my wife only a couple of weeks ago—she had a lump in her breast—and the warm welcome that she got as we walked in was so amazing; it put her at ease and it put me at ease so I could support her, and it made the whole experience as good as it could possibly be. I am also thankful to say that she is doing very well.
Will the Minister provide an update on what the Government are doing to ensure that the people who can already go for tests go for them? No woman should wait for a screening letter if she notices a lump, a change in shape, skin changes or anything that does not feel right. Whatever their age, they should contact their GP. Early diagnosis gives people more options, more time and often the chance to see children and grandchildren grow up. That is why this petition matters, and that is why, ultimately, we need to act on it.
Juliet Campbell (Broxtowe) (Lab)
It is a pleasure to serve under your chairship, Mr Vickers. I thank my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for her thoughtful opening remarks. I pay tribute to all those affected by breast cancer, those facing diagnosis, and their families, friends and carers who stand beside them. It is their experiences that make this debate so important. I also pay tribute to my constituents for signing this petition, and I thank the petitioner for starting it in the first place.
I welcome the Government’s ambition for the national cancer plan, which commits the NHS to ensuring that, by 2035, 75% of people diagnosed with cancer will be cancer-free and living well five years after diagnosis. The plan will also develop further AI-assisted interpretation of images for suspected breast cancer diagnosis, and it will help us to detect breast cancer in women under 50 with denser breast tissue.
Under the last Government, cancer performance targets had not been met since 2014, leaving too many women facing delays and poor health outcomes. However, I know that my constituents want this Government to go further and to include women aged 40 in routine invitations for breast cancer screening. According to CoppaFeel!, cases of breast cancer in under-50s are on the rise. A recent report states that we have seen a 5% increase in the last year. Patients under 50 are more likely to have their symptoms missed and to be diagnosed at a later stage in their cancer journey compared with those over 50.
That issue is even more pronounced for women from minority and ethnic backgrounds and for those from deprived and rural areas, who have less access to screening opportunities in their communities. Additional public health attention needs to be paid to that. According to Breast Cancer Research, those groups are 10% more likely to begin treatment after the cancer has already become invasive and 20% more likely to require a mastectomy.
To achieve our cancer outcome aspirations, I ask the Minister to extend routine mammogram invitations to women from the age of 40. I hope she will also consider the roll-out of alternative diagnostic measures that will affect the diagnosis of younger women.
Robbie Moore (Keighley and Ilkley) (Con)
It is a pleasure to serve under your chairmanship, Mr Vickers. I thank the hon. Member for North Ayrshire and Arran (Irene Campbell) for introducing this important debate on behalf of the Petitions Committee, of which I am also a member. Cancer is an issue that touches most of us, nearly every single day. No doubt we will all have had a friend or family member with cancer, and I am grateful that this petition has given us the opportunity to debate such an important issue.
This is an extremely poignant debate for me, as I lost two friends to cancer at the end of last year: Russell Brown, who served the Worth Valley as a district councillor on Bradford council, and Chris Graham, a former Keighley town councillor who served the Longley and Parkwood wards. Their recent losses are still felt very much across the communities that I am lucky enough to represent.
We have rightly had several recent opportunities to debate the issue of cancer, but today’s debate is particularly important, as breast cancer is the most common cancer diagnosed in women in the United Kingdom and the second most common cancer overall, with around 60,000 new cases and 11,200 deaths each year. That equates to about 31 deaths every single day, which is far too many.
This important petition calls for early diagnosis, which is crucial. According to Cancer Research UK, 76.6% of women survive for 10 years or more after being diagnosed, and 85% of those are diagnosed at an early stage. I agree with the petition, and I thank Gemma Reeves for starting it, as well all those who kindly put their name to it, including from across my constituency.
It is right to call for early screening at the age of 40. There is compelling evidence that early detection saves lives. Breast cancers identified at an early stage are genuinely smaller and less likely to have spread, and they require less aggressive treatment. Early diagnosis and early screening are key. Early diagnosis can not only improve survival rates, but it reduces the physical and psychological burden associated with advanced diagnosis and the disease spreading.
It is equally important, however, to acknowledge that screening for breast cancer is not a one-size-fits-all approach. Screening for younger women generally produces less accurate mammograms because the tissue is denser, making cancers more difficult to detect and increasing the risk of false positives, but it should still happen. I repeat the petitioners’ call for early diagnosis. It is incredibly important.
My sister was diagnosed with breast cancer at the age of 36. She has been through chemotherapy, radiotherapy and surgery, and I am pleased to say that she is on the mend, but that is another example of someone being diagnosed before the age of 40. If there is an historical family association with breast cancer, those under 40 should have the opportunity for early diagnosis. I agree with the petitioners that having a repeat opportunity of screening for annual check-ups rather than every three years is important.
Access to screening is not just about age; it is about ensuring that those who are eligible for screening are aware of it and choose to take part. I have major concerns about the lack of uptake across certain groups. There is 81% uptake for breast cancer screening in the least deprived areas, compared with 56% in the most deprived areas. I know that the Minister cares deeply about the issue and I commend her for her work on it; the cause is close to her heart. I would be keen to understand from her how the Government are looking to tackle that discrepancy. I would also like to understand whether there is a plan to roll out an annual screening programme rather than just a three yearly one.
Ultimately, I know that all hon. Members participating in the debate share the objectives of reducing deaths from breast cancer and ensuring that women receive the best possible care, but they cannot be achieved without a fully funded long-term workforce plan, alongside a clear, funded milestone to show how and when patients will see improvement.
I put on record my thanks to the volunteers, campaigners and professionals, including the mobile cancer screening units that operate in my constituency of Keighley and Ilkley as part of the Airedale hospital team, for their incredible and tireless work to help and support patients. I would like to understand whether the petition’s aims are part of the Government’s ambitions under their 10-year health plan. This poignant petition asks the Government for the right things, and, given the amount of correspondence I have received from petitioners and residents across my constituency, it has my backing.
Dr Scott Arthur (Edinburgh South West) (Lab)
You will not be surprised to hear, Mr Vickers, that it is a pleasure to serve under your chairship today. I thank my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for the way in which she introduced the debate and engaged with the petitioners.
The UK’s breast screening programme is one of the greatest successes of our NHS. In Scotland, around 130 lives are saved each year through screening alone. The programme provides critical early diagnoses, improving treatment options and patient outcomes. Even in the worst cases, early diagnosis can give women precious extra time with their family and friends. However, the petition asks whether the current programme is enough. The screening used for those between the ages of 50 and 71 does not account for the fact that one in six people diagnosed with breast cancer each year are below the age of 50. Many more are diagnosed later, and tragically, diagnoses often come too late.
Studies from the USA show that women who are diagnosed with breast cancer when they are under 40 are 40% more likely to die from their cancer, and in the UK, breast cancer is the leading killer of women between the ages of 29 and 40. Worse still, the charity CoppaFeel! tells us that when women present to a healthcare professional with breast cancer symptoms, they are “routinely dismissed”—no doubt as menopausal, as often happens to women—creating missed opportunities for treatment. Sadly, those missed opportunities will only increase with the rate of breast cancer in young women, which, as we have heard, is already increasing. Although rates of breast cancer are increasing in all age groups, the incidence rates in younger women are growing faster than the rates in older women. Those facts should lead us to ask whether it is time to reconsider our current approach to screening.
I recognise that the petition’s proposal to transition to annual screening and to lower the screening age could present significant challenges for the NHS. Annual testing would require significant additional resources and patient buy-in, and younger women’s breasts are often denser and therefore harder to scan, which throws up more anxiety-inducing false positives. However, those challenges should not discourage us from doing more to support these women. Innovations such as the seven-minute risk assessments proposed by CoppaFeel! could help us to improve and expand targeted screening to younger women with a predisposition to breast cancer, and increased resources and publicity will drive up uptake among all women.
To close, I want to recognise the work of CoppaFeel! and Asda, as well as the House of Hope in my constituency. The report CoppaFeel! published on the impact of a breast cancer diagnosis on younger patients has informed many hon. Members in this debate, and I pay tribute to its partnership with Asda, in their Tickled Pink campaign. In Edinburgh South West last year, Asda Chesser donated £2,700 to the House of Hope in Gorgie. The House of Hope is Scotland’s first bespoke support centre for those living with cancer. It provides care rather than treatment, and supports women and their families. The centre provides life-enhancing support every day, and the impact it has had in just its first year of operation cannot be understated.
The House of Hope would not be what it is without the commitment of its founder, Lisa Fleming, who, since her diagnosis at age 33, has been a tireless advocate for the cancer community. I am proud to call her my constituent. This morning, she and her mother—both are formidable—were on my Facebook page, trying to influence this debate. When I met her mother a week or two ago, I was reminded that when a young woman gets breast cancer, her loved ones, including her children and parents, are affected by it. That wider economic impact should be taken into account in our decision making.
It is through work like Lisa’s and, I hope, a renewed commitment from the Minister to improve our screening processes that we can continue to take steps against this terrible disease. I feel obliged to put a question to the Minister, and I hope she will promise me this. The next time she visits Edinburgh, will she stop her ministerial limousine at the House of Hope and pay Lisa a visit?
Clive Jones (Wokingham) (LD)
It is a pleasure to serve under your chairship, Mr Vickers. I thank the hon. Member for North Ayrshire and Arran (Irene Campbell) for presenting this important debate and the Minister for attending. I congratulate Gemma Reeves on organising this well-supported petition and her campaigning on this very important issue. Being diagnosed with breast cancer is a bewildering and terrifying experience for far too many people, as many of us know. Breast cancer is the most common cancer in the UK. Around 60,000 people are diagnosed with breast cancer every year, and one in seven women will receive such a diagnosis during their lifetime. Early diagnosis is crucial. Detecting breast cancer sooner gives people the best chance of successful treatment and ultimately saves lives.
In my own case, I had to visit my GP twice before receiving a diagnosis. Between visits to the GP, the cancer spread to my lymph glands. The result of that spread still causes issues for me today, 18 years later. Thankfully my treatment was successful, but many others are not so fortunate because of delays in diagnosis. More than 95% of people diagnosed at stage 1 survive for at least five years compared with around 25% diagnosed at stage 4. That is why breast screening is so important.
The Marmot review estimated that the current screening programme prevents around 1,300 deaths every year, yet uptake remains too low, particularly in England, where rates lag behind the devolved nations and pre-pandemic levels. Almost 30% of eligible women are not attending screening appointments. Around 600,000 women are missing the opportunity for early detection. Cancer Research UK found that concerns about pain are the most common barrier to attending. Others miss invitations, struggle to find the time or remain unconvinced of the benefits. Uptake is even lower in deprived communities, worsening existing inequalities in cancer outcomes. In England in 2025, screening uptake was 65% in the most deprived areas, compared with 75% in the least deprived areas.
The Government need to work on ideas to improve access to screening, particularly where uptake is lowest. Simple measures such as follow-up invitations, culturally appropriate information and community-based pop-up screening services could make a real difference by meeting people where they are and at times that work for them. Will the Minister outline what plans the Government might have to increase screening uptake, particularly through community-based services?
Improving uptake alone, though, is not enough. Serious workforce shortages and outdated equipment continue to delay diagnosis and treatment. Too much diagnostic equipment is ageing or even no longer fit for purpose. Many areas face shortages of radiotherapy capacity, faulty mammography equipment and insufficient staff to operate machines consistently. I have long called for greater investment in the NHS workforce, including during a debate in Westminster Hall last year. Although I welcome the Government’s national cancer plan, the commitment to provide 28 new radiotherapy machines falls well short of what is actually needed. Instead, the Government should be looking to provide at least 200 additional machines; that is what is required to tackle the backlog and ensure timely diagnosis and treatment. That is why my Liberal Democrat colleagues and I have called for a 10-year capital investment programme so that every cancer patient can benefit from faster, more accurate diagnostics and treatment.
What further plans do the Government have to invest in both the workforce and the equipment needed to improve breast cancer outcomes? We know that breast cancer screening works and that early diagnosis saves lives. Now the Government must ensure that everyone can benefit by improving uptake and providing the investment that our cancer services urgently need.
Amanda Martin (Portsmouth North) (Lab)
It is a pleasure to serve under your chairship, Mr Vickers. I thank my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for introducing this debate. I also thank all those who signed the petition and who have campaigned to raise awareness of this issue.
Breast cancer is one of the most common cancers in women in the UK. While there may be a lot of talk of statistics today, the impact of breast cancer is not a number on a chart or in a table; it is real life, and it is heartbreaking. It is a mother, daughter, sister, friend or colleague—almost every one of us knows someone whose life has been touched by this terrible disease. We know that the earlier breast cancer is detected, the greater the chance of successful treatment, and screening remains the route most likely to find breast cancer early. As we have heard, the 2012 Marmot review found that our screening programmes prevent 1,300 deaths from breast cancer every year, so I understand where the petitioners are coming from. Even one misdiagnosis feels like one too many. That concern is real, and it deserves to be taken seriously.
The stories of my friends Laura Turnbull, mum of Louis, Josh, Alfie and Zac and wife of Richard, and Anne Wise, mum of Louis and Lauren, have brought this home to me all too painfully. Both were under 50 and had reached remission at least once, but both sadly saw their cancer return in different forms, tragically cutting their lives short. I send love to their families—especially to Anne’s, because it is her funeral on Saturday. Sadly, Laura and Anne are not alone. More than a decade ago, I lost another friend, Fiona Bennett. Her breast cancer also reached her before she was 50. These stories are powerful reminders that breast cancer does not only affect older women, and explain why so many people are asking what more can be done.
That is why we should follow the science. As new evidence emerges, technology improves and we learn more about detecting breast cancer earlier and more accurately, our screening programme should continue to evolve to ensure that it delivers the very best benefits to our patients. Alongside that, we must not lose sight of the opportunity we already have. In 2025, only 70% of Portsmouth women aged 53 to 70 had attended a breast screening in the last 36 months. That is more than 4% behind the average of local authority districts in the south-east, and the gap has been widening in recent years. Whatever changes may come in the future, we must also make sure that every woman who is currently eligible takes up the opportunity to be screened.
Improving the uptake of screening among those already eligible must be an absolute priority, so I would like to ask the Minister how we are identifying barriers and what we are doing to break them down. Sadly, we know that levels of deprivation directly affect screening attendance. That is why I welcome the Government’s new cancer plan, which will include targeted campaigns to improve screening uptake in deprived and underserved communities, helping to ensure that where people live or what they earn does not determine their chance of cancer diagnosis. Can the Minister say more about that?
Unfortunately, after 14 years of Conservative mismanagement, the NHS has not met its cancer target since 2014. England’s cancer survival rates have slipped behind those of many comparable countries. That is not good enough. It is so important that, as we discuss expanding access to breast screening, we also recognise that the quickest way to undermine that principle would be to move towards an insurance-based healthcare system, as advocated by Reform UK, which could alienate even more people and stop them taking up that screening opportunity for fear of what it would cost.
Labour has set out ambitious reforms to cancer diagnosis and treatment, which are expected to save more 320,000 lives over the plan’s lifetime. More scanners and advances in diagnostic technology mean that we will have a real opportunity to diagnose cancers early and improve outcomes by shifting more healthcare into our communities and neighbourhoods. We can make screening more accessible and less daunting so that Portsmouth women will attend, whether through health hubs on the high street or having opening hours at weekends, in the early morning or evening, which would widen access. I would welcome working with the Minister on how we can get these diagnosis centres open in Portsmouth North, so that we can raise attendance from 70% to 100%.
This debate is not about choosing between improving today’s screening programme and preparing for tomorrow —we must do both. We should continue to listen to clinicians, researchers and campaigners, and be prepared to strengthen and adapt programmes as the evidence develops. At the same time, we must ensure that every woman entitled to screening because of age, family history or symptoms is encouraged and supported to attend. The screening programme works only if people use it. Every invitation accepted is another chance to detect cancer early, another opportunity for less invasive treatment, and another family spared devastating news.
If we continue to improve the science, widen access where the evidence supports it and ensure that more eligible women come forward, we will save more lives and spare many more families the heartbreak of Laura’s, Anne’s and Fiona’s.
Ms Polly Billington (East Thanet) (Lab)
It is a pleasure to serve under your chairship, Mr Vickers. I thank my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for leading this debate.
Gemma Reeves is a breast cancer nurse at the Queen Elizabeth The Queen Mother, my local hospital in Margate. She started a petition that I noticed on my Instagram feed a few months ago, which calls on the NHS to establish annual mammograms for 40-year-old women. I noticed that it was getting a lot of traction on my feed and that a lot of people I knew were signing up to it. I explored it more and wanted to understand where the policy would end up, but then—my colleagues will recognise this—it became another one of those campaigns I said I would do.
One day, however, I found that Gemma was up here in Westminster with her son, Mason, and I came to meet her in Central Lobby. She told me what she had seen as a breast cancer care nurse in the hospital in Margate, during the pandemic and since: an increase in the number of women under 50 presenting with breast cancer. What she saw corroborates research from CoppaFeel! showing that breast cancer in young women is on the rise. She became increasingly concerned that the people she was caring for could have had screening that might have meant that, when they finally presented at hospital, their cancer was not so advanced. More than half of all breast cancer cases in the UK occur in people outside the national screening age—one in six are under 50.
From having those conversations with Gemma, and since with the Minister, I know that many challenges come with tackling breast cancer in women under 50. We need to work out the best way of tackling breast cancer in younger women. I am delighted that the Minister met me, Gemma and her friends, who were previously her patients. They have become not just her friends but her co-campaigners, because they have experienced getting breast cancer under 50 and also wish that there had been some kind of screening to identify their cancer earlier.
We and many people contributing to this debate know that screening is currently designed for older women; mammograms are designed for women over 50. Therefore, if we are looking for a way of screening young women, we may need to think about and explore different kinds of technologies, from MRIs to ultrasound.
We also need to avoid false positives, as many of my colleagues have referred to. More women could end up fearing that they have breast cancer than actually have it if we introduce screening that produces false positives. We also need to recognise that, for many people, having an early test or check-in that includes things such as family history would enable them and their medical carers to spot the risks they are exposed to and decide whether they should go for early screening.
Whatever the answer, it is clear that the status quo is not acceptable, because it is not built for young people. It is also clear that the evidence on the occurrence of breast cancer in under-50s is out of date; the most recent evidence is from 2018. Therefore, I am absolutely delighted that Gemma has been able to come forward and lead this campaign, gathering so many signatures to her petition from across the country, particularly in east Kent. I hope that the Minister will take seriously her request not only to publish the evidence, but to act on it, and to find new ways of making sure that women younger than the current screening age of 50 are able to access screening to get their breast cancer spotted early.
One of our big missions in our mandate from the election was to tackle healthcare via prevention. Around 30% of breast cancers could be prevented through exercise, diet and alcohol control. Additionally, the earlier women are screened, the more likely it is that we can prevent illness and death. That is why I have supported Gemma in this campaign. I hope the Minister will be sympathetic to exploring further ways of making sure that young women can be confident that breast screenings will spot cancer early.
Andrew Cooper (Mid Cheshire) (Lab)
It is a pleasure to serve under your chairmanship, Mr Vickers. I commend my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for leading this important debate and setting out the argument so clearly. I welcome the petition upon which the debate is predicated, and I recognise the calls from the petitioners, including the 141 signatories from Mid Cheshire.
Any measures that can increase breast cancer diagnosis rates, improve treatment options, enhance survival and, ultimately, save lives must be considered carefully. A diagnosis of breast cancer is devastating at any stage, but when it comes too late—when opportunities for early detection have been missed—the consequences are profound and irreversible.
Behind every statistic is a person, a family, a future altered forever. Today, I want to focus on the story of my constituent Sarah. Sarah was identified as being at higher risk of developing breast cancer due to her family history. In March 2020, she took the responsible step of seeing her GP and was referred for genetic testing, but as the covid-19 pandemic took hold, all non-symptomatic breast screening, including family history assessments, was paused locally.
Sarah did everything right—she repeatedly followed up and sought answers, and was assured that she remained on a waiting list—but the appointment never came. Just over a year later, in May 2021, Sarah found a lump in her breast. Following investigations, she was diagnosed with triple negative breast cancer, an aggressive form of the disease. She underwent a mastectomy and chemotherapy, but even then her journey was marked by delays in test results and in the start of treatment. Less than a year later, in April 2022, Sarah discovered another lump. This time, the cancer had spread. What had once been treatable was now incurable; treatment could only manage it.
Again, delays followed—delays that no patient in such a fragile situation should ever endure. Nevertheless, Sarah wrote:
“I would like to make it clear that I very much appreciate the care and support I have received despite the obvious overwhelming and continuing pressures on the NHS. Almost every single NHS employee has been extremely kind and professional and have made many difficult experiences at least a little easier. They appear to share many of the frustrations.”
Tragically, Sarah passed away in May 2024, aged just 46.
Even in the face of her own mortality, Sarah fought for change. She spoke out about her experience and called for improvements to ensure timely testing and treatment. Crucially, she argued that non-symptomatic screening must never again be paused, even in times of crisis, because early diagnosis saves lives.
Sarah was absolutely right to highlight the significant impact that pausing non-symptomatic screening had on early diagnosis, treatment options and patient outcomes. Any disruption to early detection has lasting and devastating consequences. Her call for us to ensure that future pandemic preparedness protects vital screening services must be heeded. After Sarah’s death, her husband Dave carried forward her campaign with extraordinary courage and determination. His advocacy, born of grief, was powerful and inspiring, but tragically Dave took his own life a few short months ago.
We cannot let their story end here. Their experience lays bare the cost of delay, the cost of inaction and the cost of systems that fail to prioritise early diagnosis. We must act by strengthening screening programmes, ensuring resilience in times of crisis and delivering timely care for every patient. Let this be the legacy of Sarah and Dave: a legacy not of loss alone, but of change. We owe it to them, and to every family, to ensure that no one else endures what they did.
Helen Maguire (Epsom and Ewell) (LD)
It is a pleasure to serve under your chairship, Mr Vickers. I thank the hon. Member for North Ayrshire and Arran (Irene Campbell) for leading this important petition debate on NHS breast screening.
It is hard to follow the passionate speech by the hon. Member for Mid Cheshire (Andrew Cooper), but this is important, because there are about 60,000 new cases of breast cancer in the UK each year. Breast cancer represents 15% of all new cancer cases and 30% of all new female cancer cases. It is the most common type of cancer among women: a woman is diagnosed with breast cancer every nine minutes and there are approximately 11,200 deaths due to breast cancer each year in the UK. The human costs behind those statistics cannot be overstated. In the short span of today’s debate, 10 women will be diagnosed with breast cancer and two will tragically lose their lives to the disease.
Over recent decades, we have made huge strides in the diagnosis and treatment of breast cancer. It is remarkable that approximately 76% of women now survive for 10 years or more following their diagnosis. But as with any cancer, diagnosing breast cancer early remains vital and saves lives. Breast screening remains the most effective way to detect cancer at an early stage, which is also when treatment is most likely to succeed. More than 95% of people diagnosed at stage 1 will survive for at least five years, compared with about 25% diagnosed at stage 4.
The Marmot review estimated that the current screening programme prevents about 1,300 deaths a year. In 2024-25, about 2.75 million women aged 50 to 71 were invited to be screened—a 10% increase on the previous year—and 2.15 million of them took the offer up. Nearly 20,000 women had breast cancer detected through that screening, but as those figures highlight, around 600,000 women did not take up the essential offer of breast cancer screening.
Recent screening data reveals an alarming trend of women not attending their first screening appointment. The impact of not taking up the screening offer only compounds the issue. Women who do not attend their first breast cancer screening appointment are much less likely to take up subsequent screening invitations. In 2024-25, only 20.9% of women in England who had never previously taken up screening invitations attended, compared with the 89.1% uptake among women who had been screened in the last five years. Since the creation of the modern NHS breast screening programme, uptake for first-time screening invitations has never reached 70%.
Had the screening uptake level reached the NHS achievable standard target of 80% in 2024-25, over a quarter of a million more women would have undergone routine screening, and that would have resulted in an estimated additional 2,228 cases of breast cancer being found. The scale of the missed opportunity to catch more cancer early is unacceptable, and women and their loved ones are paying the tragic price. I urge anyone who is eligible to take up the offer of breast cancer screening.
The Liberal Democrats are clear that so much more must be done to ensure that every eligible woman attends screening when invited, particularly in England, where uptake is lagging behind the devolved nations and pre-pandemic levels. There are many reasons why women do not attend their breast cancer screening appointments, including misconceptions about the screening process and breast cancer, the fear of receiving a diagnosis, and cultural beliefs and attitudes. Others may not be able to attend due to everyday challenges such as limited transport, clashing work schedules or the burden of caring responsibilities. Health inequalities also affect screening uptake. Women from ethnic minority communities, those living in disadvantaged areas and women with disabilities often face additional barriers that reduce their access to breast screening services.
What actions are the Labour Government taking to improve screening uptake nationally, particularly among disenfranchised women? What steps are the Government actively taking to support pop-up screening initiatives in community settings, and what is being done to ensure that those vital health services are meeting people where they are and at times that work for them? What steps is the Minister taking to ensure that women are able to receive the best screening test for their individual health needs? That might include, for example, providing women with an increased risk of breast cancer with an ultrasound if they are unable to have an MRI or they have dense breasts. That is particularly relevant to younger women with an increased risk, for whom an ultrasound will provide greater accuracy in screening their dense breast tissue. Mammograms can struggle to identify cancer in dense breasts, as cancers and dense tissue present in exactly the same way on imaging.
The Liberal Democrats are also very concerned that so much NHS equipment, including diagnostic and scanning equipment, is out of date and decrepit. A quarter of England’s 280 radiotherapy machines are now operating beyond their 10-year lifespan, with a further 26 due to exceed the recommended lifespan by 2027. England has fewer radiotherapy machines than comparable European countries. Radiotherapy UK’s research reveals that England has just 4.8 linear accelerator machines per million population, well behind France at 8.5 and Italy at 6.9.
Radiotherapy lacks clear accountability. While responsibility for commissioning it sits with integrated care boards, freedom of information requests found that around 70% of ICBs do not have a named person responsible for radiotherapy. Access to radiotherapy is well below international expectations. Around 52% to 53% of cancer patients are estimated to need radiotherapy, but only around 35% receive it in England. In some areas, the figure is as low as 22%. Radiotherapy also has the longest waiting times. Only around four in 10 patients—and, in some areas of the country, as few as two in 10— receive radiotherapy on time.
Whether it is radiotherapy deserts or the mammogram machine glitch that left 7,000 women in parts of Essex without a screening service for almost two months, breast cancer patients are routinely being let down by faulty and inaccessible equipment. That is unacceptable and we must take action now. To address that, the Liberal Democrats are campaigning for a 10-year capital investment programme, under which all patients, including women with breast cancer, would benefit from easier access to newer, quicker and more accurate machines.
Alongside screening, speed and quality of treatment are central to increasing breast cancer survival rates. The Liberal Democrats would introduce a guarantee that 100% of patients would be able to start treatment within 62 days of urgent referral. We would also replace the ageing radiotherapy machines and increase their numbers to guarantee that no one must travel ridiculous distances to receive the treatment that they desperately need. Currently, 3.4 million people in England live further away from a radiotherapy centre than the NHS target of 45 minutes.
Taking those steps now is vital. We need to prepare our local cancer services for the future, as demand is increasing. Cancer cases are expected to rise by about 30% by 2040, and the new national screening programme is likely to identify more patients who need curative radiotherapy treatment. Without urgent action, the existing pressures on radiotherapy services will only worsen. We would also recruit more cancer nurses so that every patient had a dedicated specialist supporting them throughout their treatment, and halve the time for new treatments to reach patients by expanding the capacity of the Medicines and Healthcare products Regulatory Agency.
The future looks bright, with early pilots and trials using AI to analyse mammograms showing promising signs of potential improvement in both the speed and the accuracy of screening, but we must support our life sciences sector much more to champion vital research and innovation. The Liberal Democrats would pass a cancer survival research Act requiring the Government to co-ordinate and ensure funding for research into the cancers with the lowest survival rates.
I want to reflect on the 10 women who were diagnosed with breast cancer and the two who will have tragically lost their lives to the disease in the short span of today’s debate. For them and the thousands of people—mostly women, but also men—living with breast cancer and their loved ones, I urge the Minister to carefully consider the important points and perspectives raised in the debate.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
It is a pleasure to serve under your chairmanship, Mr Vickers. I congratulate Gemma Reeves on bringing forward the petition and the hon. Member for North Ayrshire and Arran (Irene Campbell) on introducing this important debate. It has been very moving to hear so many stories from hon. Members on both sides of the House reminding us of the human cost of this disease.
Breast cancer is very common, as other Members have said, affecting one in seven women during their lifetime. The Minister and I have had a number of debates in this Chamber about various diseases and forms of cancer. One of the core principles we often discuss is that early diagnosis saves lives. Cancer Research UK says that 85% of women who live more than 10 years after a diagnosis of breast cancer were diagnosed at stage 1 or 2 —the earlier stages to be diagnosed at. It was for that reason, and on that principle, that the UK introduced the world’s first national screening programme for breast cancer in 1988. Since then, much has changed. In particular, survival rates have improved dramatically. Now, 76.6% live more than 10 years; the figure was very much lower in the 1980s.
There are still some issues with screening, however, as hon. Members have said. One is that women with denser breasts find it more difficult to locate lumps, and when doing mammograms, it can be more difficult to locate cancerous tumours. Will the Minister update the House on what work has been done on using ultrasounds and MRIs to identify tumours in women with denser breasts? I understand that the National Screening Council is looking at this subject in detail. When is it due to report its findings to the Minister, and when does she intends to bring them to the House?
The effectiveness of treatment has improved, but the risk of overtreatment is higher in younger women. The incidence of the disease is increasing in younger and older women: the Cancer Research UK website says that the rate has increased by 12% in women aged between 25 and 49, and by 72% in women aged between 65 and 69. Should younger women therefore now receive screening, and should older women receive more frequent screening?
The cancer plan, which the Government published earlier this year, said that they will engage with manufacturers to look at mammograms that are more accessible to those with a physical disability, who at the moment struggle to receive their screening. Will the Minister update the House on the engagement she has had with manufacturers and on the progress that has been made?
The age trial in Oxford is looking at women aged between 47 and 49, and between 71 and 73—the ages just outside the current range of screening. I understand that early results are due in December 2026. Has the Minister had any indication of the results yet, and is she preparing for any results that come forward? Has she engaged with the people running that important trial?
Community diagnostic centres, which were initiated by the previous Government and rolled out across the country, provide screening close to people’s homes, which makes it much easier for them to attend. Will the Minister update us on how she is improving the number of CDCs available across the country?
The Government have talked about the shifts that they want to produce in healthcare, one of which is about prevention. According to the Cancer Research UK website, 23% of breast cancer cases are preventable. Will the Minister update us on what she is doing to reduce the number of preventable cases of breast cancer?
Many hon. Members have talked about attendance at screening tests. The hon. Member for Epsom and Ewell (Helen Maguire) spoke about some of the reasons why women do not attend screening. It is important that we understand why about a third of women do not attend. It is only by understanding what puts women off and makes them not attend that we can improve the services so that more women do attend. It was sobering to hear how many lives could be saved if more women attended screening. How are we making screening more accessible for women? Are we ensuring that women know that it is happening and that they need it? Do they understand the benefits of it? I would be interested to hear the Minister’s thoughts.
Another shift relates to the digital NHS. AI provides us with a number of ways to improve breast cancer screening and treatment. It could help us to understand who should be invited to screening and how often, and it can help when looking at mammogram scans. A few years ago, the Health and Social Care Committee visited Stanford in California and looked at the AI there. We saw a study comparing two radiology consultants looking at a scan, two AI computers using two different programmes, and a person and an AI computer. It discovered that the person and the AI computer were the most accurate. That can help to reduce the number of people we need in the workforce and, importantly, can improve the accuracy of screening results.
That brings me on to the workforce. We know that the Government have a workforce plan, although its publication has been much delayed. We have been told repeatedly over the past few weeks that it has moved to “imminent” status—imminent being quicker than soon—but we do not know when imminent is. Does that mean it will be published before the summer, or do we need to wait for the new Prime Minister to make a decision? It would be helpful to know that from the Minister. As we heard about radiology and radiotherapy, the workforce is incredibly important. We need a thorough plan, otherwise we will have recommendations from the NSC for screening and no people to provide that care.
I also wanted to raise with the Minister the Lobular Moon Shot Project. We have discussed before the importance of research into lobular breast cancer, which is more difficult to diagnose and treat. The last time we spoke about this, the Minister was looking at research projects that the Government could fund to identify new treatments and ways of screening for this disease, hopefully saving lives. Will she update us on how she is getting along with that?
Much of my time at the moment is spent with another Health Minister—the Minister for Secondary Care, the hon. Member for Bristol South (Karin Smyth)—in Committee Room 9, debating the Health Bill. That is where I will be tomorrow. The Bill relates to one of the important organisational factors in screening. At the moment, screening programmes are generally organised by NHS England, which is being abolished. NHS England and the Department of Health and Social Care wrote a letter in March saying that commissioning responsibility will be directly delegated to ICBs, in the same way that they are currently delegated to NHSE, by the Secretary of State. Does the Minister expect that to cause any disruption to the breast screening programme?
Integrated care boards have had their budgets cut by 50% just as they are asked to take on this work. We know that they are merging and reorganising in cells. The Government’s plans are that they should follow the mayoral authority boundaries, but the mergers that have taken place so far do not follow those boundaries. There is therefore a risk that we will need reorganisation all over again. Does the Minister think that that will have an effect on the screening programme? If so, what is she doing to mitigate that effect to ensure that as many people as possible get the very best screening and we can reduce the number of people suffering from the disease?
The screening programme offers a real opportunity to diagnose, treat early and save lives, but it needs to be delivered well. We need to ensure that the right people get the right type of screening at the right age, and at the right frequency. I will be interested to hear the Minister’s response.
The Parliamentary Under-Secretary of State for Health and Social Care (Mrs Sharon Hodgson)
How long do I have to speak? I have a lot to get through; let us see if I can make it.
I start by thanking my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for opening the debate on behalf of the Petitions Committee. I also thank my hon. Friend the Member for East Thanet (Ms Billington), her constituent Gemma, Gemma’s son, Mason, and the other ladies in the Public Gallery today for their campaigning on this petition and for gathering so many signatures that we can debate it. I pay tribute to them and thank them for joining us. I was very pleased to meet them last month to discuss this important issue.
I pay tribute to my predecessor, my hon. Friend the Member for West Lancashire (Ashley Dalton). I commend her constant courage in speaking so openly about her experience of breast cancer. I send my very best wishes to her throughout her ongoing treatment.
Behind all the figures we are discussing today, there are women, men, families and communities who have been affected by breast cancer in the most difficult and personal of ways. I pay tribute to NHS staff in breast screening services across the country, who work tirelessly to ensure that women and men are offered this important preventive measure.
Last year, our highly effective NHS breast screening programme screened nearly 2 million women. Each year, the programme is estimated to save 1,300 lives, but we must be honest about the scale of the challenge. Around 11,500 women still die from breast cancer each year. Many thousands more go through treatment, with all the fear, uncertainty and disruption that brings for them and the people who love them. That is why I am clear: we need to do more and will do more.
The national cancer plan published earlier this year sets out how we will improve outcomes for breast cancer patients. We will speed up diagnosis and treatment, ensure that patients can access the latest treatments and technology and, ultimately, drive up this country’s cancer survival rates. The plan commits to rolling out breast pain clinics nationally by the end of the year. It also builds on successful initiatives such as mobile breast screening units. Cancer alliances will receive funding to work proactively with local communities and providers so that more cancers are diagnosed earlier.
I will now speak to points that were raised by my hon. Friend the Member for Edinburgh South West (Dr Arthur), the hon. Member for Wokingham (Clive Jones), my hon. Friends the Members for Broxtowe (Juliet Campbell) and for Portsmouth North (Amanda Martin), and the Liberal Democrat spokesperson, the hon. Member for Epsom and Ewell (Helen Maguire)—there might have been others, but those are the names I scribbled down. They raised issues about serving ethnic minority communities as well as underserved, deprived communities. Building on successful initiatives such as mobile breast screening, as I mentioned, cancer alliances will receive funding and work proactively with local communities and providers to improve early diagnosis rates. They will focus on increasing people’s awareness of symptoms, and support primary care to spot the signs of cancer early. The work will also include reducing the gap in screening uptake between the most and least deprived areas. There will be particular efforts to reach ethnic minority communities and underserved groups because no one should be left behind.
The NHS also runs its “Help Us, Help You” campaign in England, which helps to increase knowledge of breast cancer symptoms and address barriers to acting on them, as well as encouraging people to come forward to see their GP as soon as possible. I understand why many people ask whether screening should begin at a younger age. It is a deeply human question that is often asked by people who have seen the impact of breast cancer at first hand. We are looking carefully at the evidence, but the picture is complex. I will come on to everything about that that has been raised.
As we have heard, younger women tend to have denser breast tissue, which can make mammography less effective. Screening can save lives, but it can also cause harm through false positives, unnecessary tests, avoidable anxiety and overdiagnosis. That is why decisions must be made carefully and on the basis of robust evidence. My hon. Friends the Members for Doncaster East and the Isle of Axholme (Lee Pitcher), for Broxtowe and for Edinburgh South West, as well as other colleagues, no doubt, raised that issue. As we know, some women will have denser breast tissue and unfortunately that makes mammography less effective because a potential cancer can be harder to spot. We are working to find the best solutions to that problem.
A study called BRAID—breast screening risk adaptive imaging for density—is looking into whether supplementary imaging techniques like MRI or ultrasound could be used for women with dense breast tissue. The independent UK National Screening Committee is in contact with the researchers and reviews the evidence as it becomes available. Ministers in the Department and across the Government will consider its recommendations as soon as they are made.
A number of colleagues asked about the AgeX breast screening trial, which is the biggest trial of its kind ever undertaken. It will provide robust evidence about the effectiveness of screening in age groups above and below the current screening age. The trial has been looking at the effectiveness of offering some women one extra screening between the ages of 47 and 49 and one between the ages of 71 and 73. AgeX is the biggest trial of its kind ever to be undertaken and will provide robust evidence about the effectiveness, benefits and harms of screening in those age groups. The UK NSC will review the publication of the AgeX extension trial when it reports. The trial began in 2009, and results are expected in 2027, something the hon. Member for Keighley and Ilkley (Robbie Moore) asked about.
Screening trials require extended follow-up periods to generate robust evidence on whether screening reduces disease or death, while also assessing any potential long-term harms. The UK NSC continuously monitors emerging evidence through horizon scanning and maintains active engagement with international peers. Should robust evidence regarding the extension of breast screening age thresholds become available, the committee will look at it right away. In the meantime, NHS England has produced a suite of public-facing information resources, communicating that women, especially those aged 71 or over, can have screening every three years if they so wish.
The hon. Member for Keighley and Ilkley also asked why we do not screen annually. The three-year intervals of the national breast screening programme are based on a successful Swedish trial. The frequency of screening balances the risk of harm from over-diagnosis with the benefits of early detection, and women at high risk of breast cancer are often called more frequently.
Robbie Moore
I want a bit of clarity from the Minister, because the petitioners are calling on the Government to lower the age at which women are first called for breast cancer screening to 40 and to roll out screening on an annual basis rather than every three years. I know that they are not intending to do that, because we have seen the written response from them in advance of the debate, but what further evidence do the Government need to be able to achieve what the petitioners are asking?
Mrs Hodgson
As I said, the AgeX trial has been running since 2009 and has been researching the efficacy of providing breast cancer screening to people above and below the current screening age. It is due to report next year, so hopefully it will provide the further evidence that is necessary. It is already in train. These decisions are not taken lightly, as I am sure the hon. Gentleman appreciates.
The shadow Minister, the hon. Member for Sleaford and North Hykeham (Dr Johnson), asked me about AI. We are supporting the early detection using information technology in health, or EDITH, trial. It will test new AI technologies that could enable one specialist—rather than two, as is currently required—to complete a mammogram screening process, increasing capacity in the screening system while maintaining patient safety.
We are entering a new era in science and technology. Advances in data, genomics and predictive analytics will allow the NHS to deliver care that is more personalised, more proactive and better matched to each person’s individual risk. New tools, such as liquid biopsies and other non-invasive tests, may help us to detect cancer much earlier, and often before symptoms appear. The NHS is preparing to seize those breakthroughs so that patients can benefit from the full power of modern innovation.
The national cancer plan has identified priority areas to accelerate access to new technologies, including artificial intelligence-assisted interpretation of pathology images for suspected breast cancer diagnosis. We will continue to horizon-scan for better methods of screening and to build the evidence base for any future changes. Our ambition is clear—to save more lives, to diagnose cancer earlier and to do so in a way that brings more benefit than harm.
Ms Billington
I am interested in the possibilities of AI helping with detection and speeding up that process, freeing up resources to be directed into earlier detection by focusing on screening for younger women. If we are to harness the potential of AI, surely the first thing that we should do is to redirect the resources that are saved into ensuring that we can save more lives, potentially those of the young women who have campaigned so strongly on this petition.
Mrs Hodgson
Yes; saving more lives and freeing up resources is exactly what we should be doing. In relation to the AgeX trial evidence and other evidence that is being looked at, that will be happening within the next year. Hopefully for my hon. Friend and others here today and the campaigners, the evidence will be looked at and, if it is strong enough, things will change.
Colleagues raised a number of other issues that I want to touch on. The hon. Member for Wokingham, chair of the all-party parliamentary group on breast cancer, always reminds us that it is not just women who are affected. Sixty thousand people a year are diagnosed with breast cancer, and a small proportion of that number will be men. It is always important that we remember that, and he is doing an amazing job as chair of the all-party group. If I am here and the hon. Member for Sleaford and North Hykeham (Dr Johnson), who speaks for the Opposition, is here, the hon. Gentleman is often here as well—we have become a regular trio in these debates on a Monday.
I must mention my hon. Friend the Member for Mid Cheshire (Andrew Cooper), who gave a very emotional speech about his constituent Sarah and her husband David. What happened was so tragic. I thank my hon. Friend for sharing that, and I want him to know that all of us here having heard it already means that it was not in vain. He said that he wanted to make sure that their story had been heard—how tragic it was, its consequences, and how long-lasting the effect of this awful disease is, not just on those who suffer, but on the wider family.
My hon. Friend the Member for Portsmouth North asked me about cancer waiting times more broadly, and I cannot let this moment go without stressing that cancer patients are now getting diagnosed in the shortest time on record. I am pleased to report that.
The hon. Member for Sleaford and North Hykeham raised the very important issue of women with physical disabilities. We have spoken about this before. The NHS has an obligation to make appropriate accommodations for people with disabilities, as I know she is aware. Unfortunately, however, some mammography machines are not a good design for people in wheelchairs and those who cannot support their own torso. For women for whom mammography is not an option, a physical exam can still be offered; and where a GP is concerned about the findings following a physical exam, the woman can be referred for further diagnostic tests. The NHS is talking with manufacturers about amending the design of mammography machines, and NHS England is considering whether alternative testing tools could be used instead of a mammogram in those specific circumstances.
I can reassure the hon. Lady that the workforce plan is still imminent; I have nothing further to add on that. She mentioned lobular breast cancer and the Moon Shot project. As she is aware, in April Lord Vallance, the Minister for Science, Innovation, Research and Nuclear, and I, alongside NIHR and MRC representatives, met the Lobular Moon Shot Project team to discuss how best to progress research in this area.
Following that meeting, a scientific roundtable on lobular breast cancer was organised earlier this month. Lord Vallance hosted the roundtable, and Professor Patrick Chinnery, executive chair of the MRC, chaired a discussion considering the challenges and opportunities for progress in invasive lobular breast cancer research. The NIHR is actively encouraging high-quality, ambitious research proposals on lobular breast cancer, having launched a highlight notice in late 2025. We hope that the team will make an application for that.
I cannot finish my speech without stating one message as clearly as I can. If hon. Members or their constituents are, at any time, worried about breast cancer symptoms, such as a lump, an area of thickened tissue in the breast or any change in how their breasts look or feel, no matter what age they may be, I say this: “Please do not wait to be offered screening. Please contact your GP at any stage.” Coming forward early, as we know—and as Gemma and her friends know more than most—can make all the difference. I want to make sure that message goes out loud and clear.
Irene Campbell
It has been a privilege to open and close such an important debate. We have heard from many Members and the Minister about how important early diagnosis and treatment are for breast cancer, and how key it is that we tackle this issue quickly and effectively. We have also heard about health inequalities and deprivation, and how they can impact the take-up of screening opportunities. We must do more to address that.
The NHS 10-year plan has committed to diagnosing 75% of cancers early by 2028, and the national cancer plan has a 75% five-year survival target for all cancers. This is an area that is very important to so many people across the UK, and we must do all we can as a Government to improve recovery and survival from cancer, particularly the most common type of cancer in women.
I would like to finish by thanking the petitioner, Gemma Reeves, again and congratulating her on gathering over 106,000 signatures, which is a great achievement.
I would also like to thank Lily Parsey, Sophie Conway and Lily Ewin from CoppaFeel!, Nele Gewert and Hannah Maybour from Breast Cancer Now, Cristina Visintin and Ros Given-Wilson from the UK National Screening Committee, and Professor Sacha Howell and Sarah Hindmarch from Manchester University for meeting me and my team before this debate.
Finally, as always, I thank the staff of the Petitions Committee, who work tirelessly every week to make sure that these debates go ahead in such a smooth and effective way.
Question put and agreed to.
Resolved,
That this House has considered e-petition 742179 relating to NHS breast screening.
Written Statements
Comprehensive and Progressive Agreement for Trans-Pacific Partnership: June 2026 Update
(1 day, 4 hours ago)
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The Minister for Trade (Chris Bryant)
In Melbourne, Australia, at the 2025 comprehensive and progressive agreement for trans-Pacific partnership ministerial commission meeting https://www.gov.uk/government/publications/cptpp-joint-ministerial-statement-in-melbourne-21-november-2025 CPTPP Ministers identified that Indonesia, the Philippines, and the United Arab Emirates are in line with the Auckland principles—principles that CPTPP parties consider when assessing accession applications. At that same meeting, CPTPP Ministers committed to meeting again in the first half of 2026 to take further decisions on these three accession applicants, as appropriate.
Ministerial commission meeting - 26 June
In the early hours of 26 June 2026, I attended a virtual commission meeting alongside CPTPP Ministers and representatives; to meet the commitment we made in Melbourne. At this meeting we approved by consensus to begin preparatory discussions on accessions with Indonesia, the Philippines, and the United Arab Emirates. We have tasked CPTPP officials to commence these discussions over the coming months.
At the commission meeting, CPTPP Ministers also:
Noted the substantive conclusion of negotiations with Costa Rica and that we have commenced Uruguay’s accession working group.
Approved the establishment of an ad hoc working group to enhance cooperation on rules of origin, customs administration and trade facilitation to maintain a fair and transparent trading environment.
Took note of ongoing work to upgrade the CPTPP agreement following the general review.
Recommitted to the work underway in dialogues between CPTPP parties and the EU and ASEAN.
The full joint ministerial statement of the meeting outcomes can be found here: https://www.gov.uk/government/publications/cptpp-joint-ministerial-statement-from-the-10th-commission-meeting-26-june-2026/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-cptpp-joint-ministerial-statement-on-expansion-implementation-and-co-operatio
Energy security and supply chains for essential energy products and other impacted commodities
At the same meeting, CPTPP Ministers issued a joint ministerial statement emphasising the importance of maintaining free and open markets and rules-based trade in energy and other impacted products, in light of recent global disruptions: https://www.gov.uk/government/publications/cptpp-joint-ministerial-statement-on-energy-security-and-supply-chains-for-essential-energy-products-and-other-impacted-products/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-cptpp-joint-ministerial-statement-on-energy-security-and-supply-chains-for-ess
Next steps
CPTPP Ministers will convene again towards the end of this year for the CPTPP commission meeting under Vietnam’s chairship, I look forward to keeping the House updated on future CPTPP developments.
[HCWS154]
Resident Doctors: End of Industrial Action
(1 day, 4 hours ago)
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The Secretary of State for Health and Social Care (James Murray)
I am pleased to inform the House that the Government and the British Medical Association’s resident doctors committee have agreed a deal to resolve their dispute on pay and training places, bringing an end to a period of industrial action that has seen 21 days of strike action in the past year. This follows a referendum of all resident doctor members of the BMA, in which a majority voted to accept the deal.
The deal is fair to doctors, affordable for the taxpayer and in the best interests of patients. Resident doctors will benefit from improved pay scales, better working conditions, enhanced career progression, and up to 4,500 new training places over the next three years.
I am incredibly grateful to staff across the NHS who have kept the NHS going during the recent rounds of industrial action. The absence of strikes by resident doctors will allow the NHS to focus on supporting patients and improving working conditions for all staff, rather than managing disruptive industrial action. When unions and the Government work together, patients, staff, and services benefit.
The deal means resident doctors will be on average 35.2% better off than they were four years ago. It also means resident doctors will benefit from pay structure reform, leading to more frequent pay progression as they develop and gain additional skills which benefits the health service.
Up to 4,500 additional training places will also be created, giving more resident doctors the opportunity to progress in their careers to more senior roles. This builds on the Medical Training (Prioritisation) Act 2026, which now means UK medical graduates, and doctors with significant NHS experience, are prioritised for foundation and specialty training posts, which has halved competition ratios from 4:1 to just 2:1.
The offer will also put money back in doctors’ pockets, tackling the unique costs resident doctors experience through the reimbursement of mandatory royal college portfolio and examinations fees, and will improve working conditions for locally employed doctors and those who work less than full time.
Taken together, these measures recognise the vital contribution resident doctors make every day, while supporting the long-term sustainability of the NHS workforce. These changes are not simply investments in doctors. They are investments in patient care.
I want this agreement to mark the beginning of a new chapter of co-operation with resident doctors.
We must now begin to implement this deal and embed a new working relationship so that the NHS remains a place where doctors can thrive and develop.
This Government are getting the NHS back on its feet and making it fit for the future. Waiting lists have fallen by 400,000 since we took office, satisfaction with general practice has increased from 60% to 76% and ambulances are arriving faster. The acceptance of this deal by resident doctors today is a significant milestone on that road to recovery.
[HCWS157]
Asylum Accommodation
(1 day, 4 hours ago)
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The Minister for Border Security and Asylum (Alex Norris)
This Government inherited an asylum system under significant strain, with hundreds of hotels in use at considerable cost to the taxpayer.
I wish to update the House on the Government’s action to fix the asylum accommodation system, ending the use of asylum hotels and replacing them with alternatives that work.
We are scaling up alternative accommodation by expanding the use of large, basic facilities, including former military sites, to replace unsuitable hotels. Three new ex-military sites are now under consideration: MoD Barnham, MoD Bicester and MoD Linton-on-Ouse. Together, these sites could eventually provide accommodation for around 3,750 asylum seekers, subject to feasibility assessments, planning and the necessary approvals.
We will also seek to extend the use of Crowborough and expand both the capacity and duration of use at Wethersfield. Following detailed assessments, the Government have decided not to proceed with Cameron Barracks in Scotland as a potential site for asylum accommodation, and it will be returned to the Ministry of Defence.
Alongside this, and as part of the next phase of delivering our commitment to end asylum hotel use by the end of this Parliament and return them to communities, we are closing a further 20 asylum hotels across England.
Hotel use has now more than halved since its peak. Just under 170 asylum hotels remain in use, down from around 400 at the height of the previous Government’s reliance on hotels. The number of people accommodated in hotels has also been cut by more than half, from a peak of 56,000 in 2023 to around 21,000.
This follows the first tranche of 11 hotel closures announced in April. These latest closures are part of wider reforms which will restore control of the system, including faster decision making, increased returns, and stronger action to deter illegal entry into the UK.
This marks a decisive shift away from the unsuitable use of hotels that spiralled under the previous Government, and towards a more controlled and sustainable accommodation system that tackles the factors driving demand.
The Home Office operates all sites safely and securely, working closely with local authorities, police and partners, just as we have successfully done at Wethersfield for several years. Public safety and community cohesion will remain central to this work.
The Government will provide further updates to Parliament as this work progresses.
[HCWS155]
Repeal of Vagrancy Act
(1 day, 4 hours ago)
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The Minister for Local Government and Homelessness (Alison McGovern)
Today I am confirming that the Vagrancy Act 1824 has been repealed.
This Government are drawing a clear line after over 200 years of criminalising people for sleeping rough.
The moral case is clear: no one should be punished for having nowhere safe to sleep, and people facing homelessness deserve dignity and support, not criminalisation.
This change allows us to focus on what really matters—preventing homelessness, intervening earlier, and making sure people receive the right support at the right time, as set out in “A National Plan to End Homelessness”.
We have also been clear that repeal needed to be implemented responsibly, without leaving gaps in the law where community safety issues arise. Replacement measures have been introduced alongside repeal. These are narrow and targeted. They do not criminalise rough sleeping or target people simply for being destitute. They are focused on specific issues including exploitative organised begging and trespass with intent to commit a crime.
Repeal is not the end of our work to prevent homelessness and support people away from the streets, but it is a significant step forward. We will now focus on delivering that shift in practice—through earlier intervention and ensuring people get the right support at the right time.
[HCWS156]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Viscount Colville of Culross) (CB)
Good afternoon, my Lords. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
Before we start to debate the first group, I remind the Committee of the rules on declaring interests. Noble Lords should declare any relevant financial interest the first time they speak at each stage of a Bill. This means that, in Committee, a relevant financial interest should be declared during the first group on which a noble Lord speaks. Thereafter, the declaration does not need to be repeated in debate on later groups at this stage. Declarations should be specific and brief: Members should briefly indicate the nature of their financial interest and not simply refer to their entry in the Register of Lords’ Interests.
I also remind noble Lords of the guidance in the Companion at paragraph 8.82:
“when withdrawing amendments, noble Lords should be brief and need not respond to all the points made during the debate.”
Financial Services and Markets Bill [HL]
(1 day, 4 hours ago)
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Baroness Northover
“(2) In section 3B (regulatory principles to be applied to both regulators), in subsection (1), at end insert—“(i) the need to consider climate risk;(j) the desirability of sustainable growth in the economy of the United Kingdom in the medium or long term.””
Baroness Northover (LD)
My Lords, in moving Amendment 80 I shall also speak to Amendment 103. My name is also on Amendment 140, and I have no doubt that the noble Baroness, Lady Hayman, will expertly present that. I also support the other amendments in this group.
We experienced, of course, the most extraordinary heatwave last week, made so much more intense because our climate has already changed. It is now anticipated that we will never return to pre-industrial levels, yet, we have gone backwards on climate change and climate risk in this Bill. The Government may say that they have not, and that they want to ensure that the regulators are flexible in how they can tackle this challenge, but Clause 17 strips out all sorts of accountability arrangements in a number of areas. My noble friend Lady Bowles rightly argues that it simply should not stand part of the Bill.
The noble Baroness, Lady Noakes, said on day one in Committee that she concluded that in the Financial Services Act 2023, we failed to understand what the lack of EU oversight, as passed into UK law,
“meant for democratic oversight of what the regulators do with the powers that they acquire. We also failed to appreciate the scale of the task of holding the regulators to account.””.—[Official Report, 22/6/26; cols. GC 193-4.]
This has to be a major cause for concern to us across the broad range of powers we are passing to the regulators, especially as we do not even know what new rules will be drawn up for them. As my noble friend Lady Bowles said, again on the first day of Committee:
“Our system is not to delegate unconstrained power to regulators. Parliament sets the framework, regulators operate within it and, when necessary, the court interprets.””.—[Official Report, 22/6/26; col. GC 197.]
I know there will be a number of objections to what Clause 17 seeks to do, but in this group, we focus on the steps backwards that this represents in terms of climate risk, climate change and nature loss. I am extremely grateful to my noble friend Lady Kramer, who directed me towards the relevant page in an absolutely enormous tome which details the Financial Services and Markets Act 2000, with all the subsequent amendments, so that I could see exactly what Clause 17 does. If you simply read the Bill or the Explanatory Notes, you would never quite know what was being deleted. Knocking out the regulatory principles eliminates the explicit reference to the desirability of sustainable growth in the UK economy in the medium to long term, and the need to contribute to achieving compliance with the Climate Change Act 2008, on net-zero emissions, and with Section 5 of the Environment Act, on environmental targets.
I am sure the Minister will say that when the rules are drawn up, or when the regulators work out their strategies, they are bound to look at climate risk, for example. But as the earlier debates on this Bill have shown, we are removing protections that were in place and handing them to the regulator, when regulators are so often found lacking. That is why I put down Amendment 80, and I am very grateful to the right reverend Prelate the Bishop of Manchester and the noble Baroness, Lady Griffin, for their support on this amendment.
Our concern here is to reinsert the desirability of sustainable growth in the economy of the UK in the medium and long term, something we managed to get into the 2023 Act. Of course we should be doing this. These are the industries of the future, and that is what we need to do if we are not to drive climate change further, but we have added climate risk. As I mentioned at Second Reading, we know that a lax attitude to regulation helped to bring about the financial crash of 2008 with all its economic, political and social consequences; so, it is all very well saying that of course the regulators will do this, but we know that that is not necessarily so. Climate change is a current and future risk to the financial sector over both the short and long term. Therefore, we should be strengthening, not weakening, the regulations here.
This comes across very clearly from the report of the Adaptation Committee of the Climate Change Committee. The priority risks in the UK are intensifying heat, growing flood risk and rising drought and wildfire risk. The risk to the insurance industry is obvious. There is a report in today’s Times on subsidence and the likely increase in its incidence. It points out that the summer of 2025 was
“Britain’s hottest on record and also its most expensive for homeowners: insurance companies paid out £307 million for subsidence claims over the year, the highest ever amount, according to the Association of British Insurers”’
Moreover, many insurers are now becoming so risk-averse that they no longer cover subsidence, so that leaves the poor home owners on the hook. The Adaptation Committee points out that flood-related insurance claims are rising and that home insurers have paid out more in claims than they received in premiums for the five years to 2024. It notes that this will put stress on the financial sector as banks face higher default rates on mortgages and business loans, and this will then affect the housing market, just as happened with subprime mortgages. As the report states:
“Actions by FIs are needed to ensure that physical climate risks don’t disrupt the financial system”.
Therefore, it becomes vital that we ask the regulators to assess for climate risk. This should be in the Bill as this issue, sadly, is not going to go away.
For this reason, in Amendment 103—I thank the noble Baroness, Lady Griffin, for her support— we propose that the regulators make annual reports to the Treasury on how they have upheld their climate risk and environmental principles. The reports must explain what action they have taken to ensure that climate risk is embedded in their operations, processes and decision-making, and what rules and guidance they have therefore promulgated. The way this is done takes as its template the proposals in Clause 20. Moreover, it should not be just a matter of “having regard” to these issues; it should be informing their day-to-day work, due to the negative impacts already being witnessed on price stability, financial stability, market functioning and growth.
As I have said, I also support the other amendments in the group—which will be fully explained by others—to ensure that UK-related financial institutions develop and implement credible transition plans, as well as those in the name of my noble friend Lady Sheehan. I beg to move.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise to speak to Amendments 83B and 86A, which appear in my name. It is a pleasure to follow the noble Baroness, Lady Northover, and to agree with a great deal of what she said. It is almost as if in the past week or so, the planet itself has been speaking to us and sending us a message that should direct the Committee’s deliberations on this Bill.
I will restrict myself to my two amendments, in the interests of time. I have been asked to table them by people who are gravely concerned about issues of corruption, dirty money, the “London laundromat” and associated security concerns. These are issues on which I do a considerable amount of work, and that is why I have this focus on this group.
These amendments are related. They seek to add both climate risk and the laundering of criminal gains causing environmental harms to the regulatory principles to which the FCA and PRA must have regard. I can pretty well hear the concerns about to be expressed some time soon about “have regard” amendments, but surely these are things that we have to think about. We have to make sure that we direct the regulators to think about climate and the laundering of criminal proceeds through the City and associated institutions.
I note that the Financial Action Task Force recognises environmental crimes as predicate offences for money laundering. The European Union has strengthened its criminal law framework through the environmental crime directive, requiring member states to publish a national strategy on combating environmental criminal offences by 2027.
Looking around the world, in 2018 the United States Treasury sanctioned the Zhao Wei transnational crime organisation and listed wildlife trafficking as one of the many illicit activities undertaken by the network. In Zambia, the economic and financial crimes division of the high court recently forfeited to the state a vast array of assets associated with a major illegal logging operation. Diplomatic momentum for a fourth protocol under the UN Convention Against Transnational Organized Crime to address crimes against the environment is also advancing, with the support of the UK.
As a global financial centre, the UK has a particular responsibility to ensure that it is not supporting financial and environmental crimes globally and it should play an important role in achieving a stronger global approach. Evidently, however, although environmental crimes are recognised as serious at present, without an explicit recognition of this in the regulatory principles, the FCA and the PRA will not be equipped or directed to respond with the necessary action.
It is important to stress that this is also very much a security issue. There is clear evidence that environmental crime is not only associated with financial and organised crime but with terrorist and armed groups as well. For instance, the proscribed terrorist group al-Shabaab has historically benefited from the illicit charcoal trade in Somalia, with state actors also being complicit. More generally, Interpol has found that the proceeds of environmental crime have become the largest source of income for non-state armed groups and terrorist organisations. Without sufficient regulatory framework, the UK could be contributing to these very dangerous, deadly, human rights-abusing forces around the world.
So much of what is happening in the world is criminal. Between 2013 and 2019, about 69% of tropical forest agro-conversion was conducted in violation of national laws and regulations. This, of course, is also associated with human rights abuses. Perhaps this is sometimes less considered, but Interpol says that illegal mining generates up to $48 billion annually, frequently breaching environmental regulations and contributing again to deforestation, pollution, biodiversity loss and harm to local communities.
I have already mentioned illegal wildlife products. Interpol found that the black market for those is worth up to $20 billion annually, and up to 100 rangers are killed by poachers each year while protecting wildlife and habitats. It might seem a very long way from the City of London to the ranger desperately trying to protect the wildlife population in a national park in Africa, but those two things are linked. We bear responsibility here. I urge the Government to consider these amendments in order to put this back into the directions for the FCA and the PRA.
Baroness Hayman (CB)
My Lords, it is a pleasure to follow the noble Baroness, Lady Bennett, and to say that I broadly support the action that she is suggesting in Amendment 83B. Organised environmental crime, including illegal deforestation and wildlife crime, is increasingly acknowledged as a major source of illicit finance and money laundering. It is therefore important that the FCA and the PRA have the ability properly to take account of these risks within their existing anti-money laundering framework. I hope that we will get a positive response from the Government on that.
This group of amendments deals with the gaping hole, frankly, in the Bill on nature and climate considerations. I was going to speak more broadly about the importance of taking these into account—I may still do so in our stand part debate on Clause 17—but the noble Baroness, Lay Northover, did the Committee a great service in setting out very clearly, in her opening speech, the issues that we need to address with some urgency.
Baroness Sheehan (LD)
My Lords, first, I apologise for being unable to take part at Second Reading due to other commitments. However, my interest in nature and climate-related issues in previous Bills on financial services and markets is a matter of record. Two amendments in this group are in my name. I thank my co-signatories, the noble Baronesses, Lady Boycott, Lady Young of Old Scone and Lady Coffey, for their support because cross-party support sends an unequivocal message to government that this is not ideological but concerns the health of our environment and the future of our natural world.
I will speak first to Amendment 142 on the Taskforce on Nature-related Financial Disclosures. In essence, it seeks to insert a duty into the Financial Services and Markets Act 2000—FSMA—so that regulators must
“make rules requiring such regulated persons as they consider appropriate to disclose information relating to nature-related dependencies, impacts, risks and opportunities”.
Nature-related dependencies are things from nature on which businesses rely, such as water, soil, pollination and healthy ecosystems. Nature-related impacts are harms or pressures that companies themselves put on nature, such as through land use change, pollution or deforestation.
Clearly, nature is financially material, and nature is under threat. Investors are demanding comparable information on how nature loss, biodiversity, water, land use and similar issues could affect companies and profits. This amendment would deliver just that. It would tell the regulators to write the rules and decide which regulated persons should be in scope, shifting TFND reporting from a mainly voluntary framework towards a mandatory requirement. The Dasgupta review clearly showed us that nature is not an externality but an economic foundation. It is, quite frankly, utterly barmy to degrade the very assets on which markets depend.
Deforestation-driven biodiversity loss and ecosystem collapse are high-level threats to UK national security, according to the Government’s own assessment in their report, Global Biodiversity Loss, Ecosystem Collapse and National Security. Four out of the six ecosystems identified as critical to the UK’s security are forests. I utterly endorse the excellent speech made by the noble Baroness, Lady Young of Old Scone, at Second Reading, in which she said that having
“a stiff gin by your side”—[Official Report, 8/6/26; col. 1190.]
is necessary before reading the report.
Nature loss is no longer an environmental issue. It is a national security and market stability risk, and it must be treated with the urgency it deserves. Climate change is accelerating, as borne out last week by temperature records being broken daily. The measured carbon dioxide levels in the atmosphere serve as the single best real-time signal of whether the world, as a whole, is on track to a safe future. It is currently at 430.52 parts per million. Pre-industrial levels hovered at around 280 parts per million and never went above 300 per million. We are in uncharted territory and we need urgent action. I look forward to the Minister’s response to Amendment 142.
Turning to Amendment 172, I again thank my co-signatories, the noble Baronesses, Lady Boycott, Lady Young of Old Scone and Lady Penn, each of whom has been a consistent and persuasive advocate for regulatory coherence in addressing the urgent challenge of deforestation. This is a crisis with profound implications for the health of our planet and for those who depend on forest ecosystems, particularly indigenous communities, which are both their most effective stewards and, too often, their greatest victims. This amendment would introduce three clear and necessary measures.
First, it would require that within three months of the passage of this Act
“the Secretary of State must lay before Parliament draft regulations under Schedule 17 … of the Environment Act 2021”
concerning the
“use of forest risk commodities in commercial activity”.
This provision addresses the unacceptable delay in bringing into force measures that Parliament has already approved five years ago. Secondly, it would ensure that at the point those regulations are laid,
“the Secretary of State must immediately commence”
the statutory review required under Section 79 of the Financial Services and Markets Act 2023. That review is essential to understanding how financial systems intersect with and potentially drive deforestation risk. Thirdly, the amendment specifies that the regulations must include provision for both “due diligence requirements” and
“reporting obligations for regulated persons”.
The intention is straightforward but critical: to place due diligence and transparency at the centre of the regulatory framework. By making these elements explicit, the amendment would signal Parliament’s clear expectation that businesses will be subject not merely to guidance but to enforceable obligations, both to undertake robust supply-chain checks and to report publicly on their compliance. Furthermore, by aligning the introduction of these regulations with the commencement of the Financial Services and Markets Act review, the amendment would promote better co-ordination across government and ensure that market implications, including those for regulated financial institutions, are considered alongside the development of the regulatory regime itself.
As Sir Ian Cheshire, former chair of Barclays and head of the Global Resources Initiative taskforce, noted in his open letter of 23 January 2023, addressed to the then Minister, the noble Baroness, Lady Penn, the then Economic Secretary to the Treasury and Members of this House, “regulating supply chains alone” is not sufficient. He recommended that the Government should make it unlawful
“for financial institutions to invest in or lend to … companies that are unable to demonstrate forest risk commodities have been produced in compliance with ‘local laws’”.
This amendment seeks in part to address that gap. It reflects the compelling case that it is more effective to require financial institutions to undertake due diligence at the point at which finance is first provided, rather than attempting to remedy harms further downstream.
Although I welcome the Government’s recent announcement that Northern Ireland will follow the EU’s deforestation regulations, due to come into force on 31 December 2026, and their stated ambition to align rules across Great Britain with those requirements, the position remains one of stated intent rather than concrete action. The commitment to consult on new regulations requiring larger businesses to ensure that forest-risk commodities are produced legally in their country of origin is a step forward, but it falls short of providing the firm timelines and enforceable measures that are now very overdue. It is, after all, five years since Parliament set out its expectation that illegal deforestation would be addressed in regulation. In that context, Amendment 172 remains both necessary and timely. I hope the Minister will accept that these measures are necessary now, not tomorrow—whenever tomorrow may be. My colleagues and I from across the House will push hard for that acceptance.
The Lord Bishop of Manchester
My Lords, I, too, support all the amendments in this group, but I will limit my remarks to Amendment 80, to which I have added my name. I note that I appear to be the only man to have signed any of the amendments in this group. I hope that does not mean that climate concern is now becoming divided on gender lines; climate risks are not sex specific. Perhaps I might encourage some other men to rise and support amendments in this group.
We have heard that Clause 17 will remove the requirement that the FCA and the PRA have regard to certain regulatory principles, including those relating to environmental obligations. As the climate crisis grows and public services are forced to adapt to a growing range of climate-related challenges, weakening such regulations is neither environmentally nor economically sustainable. The regulatory principles of the previous Financial Services and Markets Act 2023 were intended to ensure that climate risks were incorporated into regulators’ day-to-day decision-making. I am afraid that the evidence is not very good that they have been sufficiently incorporated in practice.
We have just heard from the noble Baroness, Lady Sheehan, about deforestation. In 2022, a report from the Make My Money Matter campaign found that over 30% of UK pension fund public equity and corporate bond investments were in institutions with a high risk of causing deforestation. When I was chair of the board of the Church Commissioners, I was very proud that it was one of the major investors in sustainable forestry across the world and was constantly seeking to increase our investment in that sector as something that was doing climate good at the same time as making the returns we needed as an investment institution.
Deforestation is already a priority in the Government’s net zero strategy, but weak regulation has enabled the UK financial system to fuel climate destruction directly. If we weaken the existing framework, it will only move us further in the wrong direction. As the climate crisis deepens, we have a responsibility to exercise wise stewardship over our planet to ensure that the consequences of environmental degradation are not simply passed on to future generations. That, for me, is a theological point as much as a practical one. It can be done only if we embed climate and nature implications in financial decision-making at every level.
It is not just an environmental imperative; it is an economic one as well. Climate change presents significant challenges to the Bank of England in meeting its primary objectives of controlling inflation and ensuring financial stability. As we have heard from the Energy and Climate Intelligence Unit, climate change was responsible for a third of the UK’s high street food price inflation in 2023. Meanwhile, the UK recently experienced its worst inflationary crisis in four decades due to the price volatility of fossil fuels bought on the global market. Without action, vulnerable communities, including those in my own diocese of Manchester, will tend to bear the greatest weight of fluctuating prices and economic insecurity. I have just come from the launch earlier today of a new inquiry by the Trussell Trust into the need for food banks and why that, sadly, continues to be a growth area in our community. Why are people finding it harder and harder to afford to feed their households week on week, year on year?
The General Synod of the Church of England has set out ambitious targets for attaining net zero, recognising our responsibilities as God’s stewards of the planet. I note that similar robust targets have been set by the former mayor of Greater Manchester, where much of my diocese lies. I wonder whether the honourable Member for Makerfield will have, and indeed express, a view in the other place. In the meantime, we need to use every lever we have to bring human-made climate change under control—including this Bill. We should not make any legislative changes that act in a contrary manner. What is set out in Amendment 80 would not only remove the deregulatory changes in Clause 17 but strengthen regulatory responsibilities by embedding climate considerations in decision-making and making environmental responsibilities clearer. I hope the Minister will set out how climate risks will remain central to the decisions that regulators make, should this clause remain in the Bill.
Baroness Coffey (Con)
My Lords, I will speak to Amendment 142, which I have signed, and Amendment 172, which I strongly support.
The whole concept of the TNFD follows on from the TCFD, but it has been driven and particularly supported by Defra over the past several years. As such, David Craig, who has been tremendous in promoting the TNFD, has started, just after another session of London Climate Action Week, to share the frustration of many that we already have the ISSB, which has made progress: at its April meeting, I think it agreed a way forward for its IFRS practice statement to start to be included automatically in accounting standards around the world. Indeed, we know that investors are now asking boards what they are doing about understanding their risk if certain things in nature start to change. That is, in effect, what the TNFD is about: it is not saying that you cannot do this, that or the other but about making sure that you think ahead. Why does it matter? Well, nature is at the very heart of the food we eat and pretty much every pharmaceutical we use. That is why it matters to start having this as a regular, ongoing way for the board of every business in this country to think about it.
I appreciate that there have been various difficulties over recent years when it comes to the subject of Amendment 172. I nearly got the regulations through, but then it was held up because of the issue involving Northern Ireland having to follow EU law and the then Administration finally deciding that they did not want, at the time, to try to work out a way for the two to be managed within the United Kingdom. That issue has been ongoing, and I appreciate that the Minister, Mary Creagh, announced a policy paper last week. I think it is fair to share with the Committee that the European Parliament itself voted to delay the implementation of the EUDR—which is about the forest risk commodities—and to start to restrict some of the elements that were being applied. Mary Creagh suggested that we would perhaps go further than our original suggestions on which commodities we would focus on to get these regulations into place.
Why does it matter? In values, the UK is second only to China in the importation of the products—the commodities—that risk deforestation. We took a pragmatic approach in the UK, in that we were not looking to do what the EU was trying to do, which was trying to make every product “deforestation free”. We took an approach of basically saying that you have to show that your products are not a result of illegal deforestation—at the time I thought that that was a pragmatic move, and I still do.
Again, it shows that we need to recognise the implications of what some of my noble friends may think unnecessary: we actually have responsibilities in a variety of conventions to which we have signed up, over the years, to recognise our role in supporting free trade around the world, while making sure that free trade is done in a responsible way. This is about trying to make sure that supply chains understand where their products have come from and to address that, if necessary, to make sure that their products are not, in effect, being sourced illegally.
On the basis of the two amendments tabled, I hope the Government will consider this further. Mary Creagh made an announcement last week about the Great British version of the EUDR, but apparently no regulation is due in your Lordships’ House until 2027. It is disappointing to hear about the slow work, especially as regulations were pretty much drafted three years ago. With that, I will support this amendment in Committee and if it is put to the test in the House on Report, I will support it then too.
Baroness Penn (Con)
My Lords, I will speak very briefly to Amendment 140 on transition plans and Amendment 172 on forest risk commodities, to which I have added my name. On transition plans, I do not think it is really an interest to declare, but a reason I signed that amendment is that I was a Treasury Minister—in some ways a similar position to that of the Minister now fielding friendly questions from noble Lords—on the previous Financial Services and Markets Bill, in particular on parliamentary accountability. At the same time, I was also acting as co-chair of the Transition Plan Taskforce that worked collaboratively with businesses as well as NGOs and academics to produce the transition plan disclosure framework now hosted by the ISSB. I would like to emphasise the collaborative nature of that work and those involved in it.
This was not government writing a framework for business. The task force was co-chaired by Amanda Blanc of Aviva. Its membership included the London Stock Exchange Group, NatWest, Diageo and many other businesses—and, I think, the Church of England Pensions Board—all working together to develop the content of a framework that worked for business.
I also reiterate my commitment to the importance of climate risk and nature risk to our financial institutions and our financial regulation, and the importance of finding a way to incorporate that into our approach. I believe that disclosure has been important in driving change and will continue to be so. However, it is one of many different approaches. One success that came with TCFD was that it was part of a global move led by the UK that got all G7 countries to sign up to the same disclosure standards, creating somewhat of a level playing field. There is a question as to whether that momentum continues today and whether further action on disclosure is the right thing at this time, versus many of the other different levers that we can pull beyond the UK’s SRS S1 and S2, which were published earlier this year, and on which the FCA is currently consulting.
It is a legitimate and open question to think about how much further at this stage we want to go on disclosure. The Government, though, have a commitment in their manifesto to go further, saying that there should be mandatory transition plans aligned to 1.5 for all UK businesses. They consulted a year ago on that position, and we have had nothing since. I really want to join others in getting some clarity from the Government on what they think the right approach is. Is it further action on disclosure? Is it further action in other areas? To me, the fundamentals remain the same: climate change and nature risk are material to our financial system and its stability. We need more investment in our transition to a low-carbon economy. The UK is a leader in green finance and can be one in transition finance, too. How do we want to maintain and build on that?
I should like to hear how the Government want to achieve those aims. It may be through the different policies contained in the amendments here—it may not be. We have to have a more open discussion about the trade-offs involved in some of these areas: how you get businesses and Governments to recognise these risks, who pays for them, and how you spread those costs. I am not saying there is a single answer or, much as I would like to, that the answer I was working on three years ago continues to be the right answer. But clarity and articulation of the Government’s position, rather than nearly a year of silence, would be helpful in moving us forward in what continues to be a really important area for our country and for financial services regulation.
Lord Pitt-Watson (Lab)
If I might talk on this point, I have huge sympathy with the overall direction of where people want to go on this. Climate risk is clearly relevant for any financial manager managing the assets—the cash—of any ordinary citizen, be they a vicar of the Church of England or simply a worker setting money aside, and that needs to be taken into account.
Even if you do not buy that argument, there are financial risks that go with climate that need to be recognised—for example, assets that will become stranded if we responded to the climate crisis, which should not be recognised as being valuable today. By the way, if I were to find an institution that is a mile ahead of the regulation in trying to make this take place, the Church of England pension fund is exemplary of what it is that we want to do.
As I look at this, I find it rather ironic that we are focusing on the FCA. In the past five years, if there is a financial regulator that has taken steps forward on this, it is the FCA rather than the others. I think—I have tried to check on the internet—the UK now has the highest number of transition plans by companies, and the highest standard of transition plans by companies, of any country in the world. I want to celebrate the companies doing that and the senior appointments that the FCA put in place to make these sorts of things happen.
It might be a good idea for us to scratch our heads about those regulators that, even where there are clear rules on reporting on financially material matters, are finding it difficult to see them enforced. We might want to raise those sorts of issues as well as additional reporting. If it is additional reporting, as the noble Baroness, Lady Penn, said, let us be sure that we know that the extra reporting is bringing about some good.
In Amendment 80, and perhaps in some other amendments, there is a question about parliamentary oversight. Does the Minister consider that parliamentary oversight might be kept under review so that we know that we have a financial services industry that is properly responding to the risk of climate change, and might perhaps do some other things as well?
Baroness Kramer (LD)
I shall be exceedingly brief because the position of my party has been so well-voiced by my noble friends Lady Northover and Lady Sheehan, and there is a great deal more to say in the clause stand part debate in today’s fourth group. My party has made it very clear that it has a deep commitment to the climate, nature and sustainability agenda. I am conscious that it has become quite fashionable in financial circles to say that this agenda should not be the concern of the Bank of England or of any of the regulators. Perhaps the noble Lord, Lord Pitt-Watson, can indicate to me where in the five-year strategy of the FCA he can find any reference to it, because I cannot.
Lord Pitt-Watson (Lab)
For five years, there has been a director of ESG at the Financial Conduct Authority who has specifically taken responsibility for ensuring that, where relevant, it is embedded in what the FCA is doing. Most of the feedback I get from the FCA and financial practitioners suggests that he is called Sacha Sadan, and that he had a senior role in financial services beforehand and has had considerable success in being able to do that. Is it perfect? No, I am sure it is absolutely not perfect. We have a long way to go, but I want to do something that says, “Let us celebrate some success when we have it”.
Baroness Kramer (LD)
I always join in celebrating success but, from our perspective, this is a pivot moment away from what has been the practice and emphasis over the past several years. Indeed, as the noble Baroness, Lady Hayman, said, there was consensus across the parties, with perhaps different strategies, but this appears to be a time when much of this has changed, or is about to change or is changing. I have to say that it makes absolutely no sense. Climate risk is so obviously a financial and economic stability risk, as indeed is the loss of nature and the issue of sustainable growth; surely “sustainable” belongs in growth programmes that we put in front of us.
I am also very conscious that the City and others, which have tended to have very short-term perspectives—typically the next quarter’s results—have voiced opposition to the inclusion of climate and nature in the financial regulators’ remit and that it should have the significance it has had to date, and I am very afraid that the Government are now responding to that particular set of views. Moving these regulatory principles from the Bill—from primary legislation—into a “have regard” for the five-year strategy strikes me as an acquiescence with those voices we are hearing from the City. To me, there is some confirmation in not finding a firm strand in the FCA’s own five-year strategy; that is its forward look, not its historic look backwards.
In a few minutes the Conservative Party will speak, and it will make its own position clear, but I understand that Kemi Badenoch has now said that her party, if in government, would scrap the Climate Change Act. That is a very significant change. I know it is motivated by fear of Reform, but it really has an impact on the overall discourse and the cross-party commitment we have had up to this point.
I agree with the right reverend Prelate the Bishop of Manchester—I think it was him, although I may have attributed this to the wrong person—that this is a very strange week in which to downgrade the significance of climate change. I happened to be in conversation with my daughter in the midst of last week’s heat. When I described what we were doing, she said, “I guess the universe has heard the intention and it’s decided to bite back”. I think it must have been the noble Baroness, Lady Bennett, who made the remark; I am so sorry not to have recognised that.
I think that both Labour and the Conservatives hope that by Third Reading, we will have forgotten the extreme heat and they can reassert a much more convenient and easy agenda of pretending that climate change is no longer an issue of urgency. It has now dropped down the scale and there are other issues of much greater urgency on which we must focus, and this one can be largely set aside. But I and my party continue to look at it as a series of risks that will cause extraordinary pain to ordinary people in Britain, both relentlessly and increasingly—and not just to people in the UK but to far more vulnerable countries across the globe.
The Bank of England and the financial sector have crucial and powerful tools in their hands. Those tools are vital if we are to redesign our world to limit nature loss and climate change, and to ensure that we grow sustainably in the future. As the Bill is now structured, it takes away from those tools and will encourage their being regarded as secondary or tertiary instruments, to be used only when it does not irritate certain voices in the City of London. That is not appropriate for the legislation we pass today.
Lord Reay (Con)
My Lords, I first declare that I own some shares in JP Morgan, where I used to work, and some energy shares, as set out in the register.
It will probably come as no surprise to the Committee that we broadly disagree with the approach taken in this group of amendments. Climate change is, of course, an important issue, but the question before us is not whether climate change matters but whether the answer is to place still more statutory duties, reporting requirements, disclosures and regulatory obligations on businesses and financial institutions in this country. I am not persuaded that it is.
Each of these amendments is no doubt well intentioned, but they point towards a model in which ever more public policy objectives are loaded on to regulators and then passed through into more paperwork, compliance, board time, legal advice and cost for firms. At a time when every week, the London Stock Exchange loses companies that decide to list in the US, is this really what we want to do?
Many of the businesses and organisations that would be affected by this kind of regulatory layering make very limited direct contribution to global emissions. Yet they may find themselves spending more and more time demonstrating compliance, producing reports, revising governance documents and satisfying regulatory expectations. That all has a cost. It takes resource away from investment, innovation, productivity and growth. It makes us all poorer.
We should also keep a sense of proportion. The United Kingdom’s territorial CO2 emissions from fuel combustion are around 292 megatons a year. Those of China are around 13,125 megatons. China’s historical emissions within its borders have now caused more global warming than the 27 member states of the EU combined.
The UK can make a meaningful global contribution by developing and commercialising the technologies that reduce emissions at scale. However, we risk doing precisely the opposite if our response is simply to increase bureaucracy and the cost of compliance and regulation. Indeed, I believe that growth and competitiveness in this sector will be virtually impossible if mandatory 1.5% transition plans are introduced. At one stage, growth was the Government’s prime mission, and it is urgently needed to pay for Labour’s costly plans. It would not make sense for them to go down that path.
There is also the question of regulatory purpose. The FCA and the PRA already have substantial responsibilities. They are responsible for financial stability, prudential soundness, consumer protection, market integrity, competitiveness and growth. We should not ask them to become the delivery mechanism for ever wider public policy objectives. The more duties we give regulators, the less clear their priorities become. The more principles we add, the more difficult it becomes to know which objective should prevail when they come into tension. That does not make regulation better; it makes it more complex.
The Government should instead focus on making the UK an attractive place for climate-related innovation and investment. That means clear rules, proportionate regulation, a competitive market and an environment in which firms are incentivised to deploy capital into the technologies and infrastructure that will reduce emissions. In our view, the cumulative burden of existing kinds of climate and environmental reporting obligations placed on firms is quite high enough; the FCA and the PRA should remain focused on their core financial regulatory functions. For those reasons, we oppose the proposals in this group.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, I am thankful to noble Lords for their contributions. I specifically welcome the noble Lord, Lord Reay, who is making his first contribution on the Bill from the Front Bench.
There is absolutely no denying that this is a critical issue. As set out by the Chancellor in her Mais Lecture, sustainable growth depends on resilient foundations. Action on climate, adaptation and resilience can help reduce exposure to future shocks and support long-term economic stability. At the 2025 spending review, this Government committed £65 billion in capital funding for clean energy, climate and nature, including nuclear, and an additional £3.6 billion in capital funding for flood defences. The National Wealth Fund has been capitalised with over £27 billion and plays a central role in mobilising private investment into priority sectors, including clean energy, and supporting the transition to a low-carbon economy, while contributing to growth and energy security objectives.
Before I turn to the amendments, I stress that sustainable finance is a core priority for the Government. It is also a key opportunity within the financial services growth and competitiveness strategy. The UK is one of the world’s leading sustainable finance centres, with London ranking first in the Z/Yen global green finance index. Our focus now is on how to evolve and expand.
Baroness Kramer (LD)
Let me ask a direct question of the Minister. He referred to the actions that he expects from the FCA. I take it at its word, with its five-year strategy, but I cannot find any reference to anything to do with the climate, nature or even sustainability anywhere in there. Have I missed a page? It is a bit difficult to do that when there are only 20 pages, with very little written language, but it seems to me that, if this matter were of any significance, it would have been somewhere in that document. Is the FCA just anticipating what it believes to be the direction that it is getting from the Government, as reflected in the actions that are being taken in the Bill?
Lord Stockwood (Lab)
We believe that the “have regards” give them the current position, which is that they should consult on the nature considerations. As my noble friend Lord Pitt-Watson mentioned, there is a substantial amount of work going on. There is room for improvement in the governance of that process, but we believe that the next five-year plan should be the place to review that even further.
Amendment 140 would require the FCA and the PRA to make rules mandating transition plans aligned with the Paris Agreement. The Government have committed to mandate UK-regulated financial institutions and large companies to develop and implement credible transition plans that align with the 1.5 degrees goal of the Paris Agreement, and we remain committed to that. We are reviewing responses to the Government’s consultation on the topic from a wide range of respondents and we will set out those next steps in due course.
I make it clear that we are mindful that firms do not approach transition planning in isolation, as this is closely linked to how firms identify, assess and manage climate-related risks. Any requirements must reflect this and sit within a coherent sustainability reporting framework. This policy is not confined to financial services alone; it must be done across the wider corporate landscape. We are therefore considering transition plan requirements alongside the wider modernising corporate reporting programme and discussions on what role the UK sustainability reporting standards should play in our corporate reporting framework. This amendment would risk pre-empting carefully considered and co-ordinated plans following our consultation, so I am afraid that I cannot agree with the noble Baroness, Lady Hayman, that the Bill is the right route forward to deliver this final commitment.
Baroness Hayman (CB)
I hear what the noble Lord says, but that terrible leaden phrase “in due course” was used. He says that there is a way of looking at this in the context of many other issues. Can he give me a little bit of comfort? We are one year into the consultation. Will we have another consultation that takes in all the wider issues that he discussed? How long is this grass?
Lord Stockwood (Lab)
I cannot pre-empt the timing of that report, but I will come back to the noble Baroness and have a follow-up meeting to get the specific details. I do not want to give her the wrong information today. This is important to this Government, as set out in the wider consultation and actions that we are taking. I might have to have a separate meeting to get a specific answer to that.
On Amendment 142, it is important that nature-related risks are properly understood and managed, given the material risks that they can pose to the financial system and wider economy, and we have already made significant progress in this area. As I mentioned, the Government have now finalised the UK sustainability reporting standards, and the FCA has consulted on aligning listed company disclosures with this framework. These standards, based on the International Sustainability Standards Board’s well-established global baseline of sustainability disclosures, require companies to disclose material sustainability-related risks, including nature-related risks where relevant. The Government recognise the important work of the Taskforce on Nature-related Financial Disclosures in this area and we welcome ISSB’s decision to advance further work on nature-related disclosures, building on TNFD’s recommendations. We will continue to ensure that the UK framework evolves in line with international best practice and we therefore do not support this amendment.
Amendment 172, on deforestation, seeks to require the Government to lay regulations on deforestation and undertake the review envisaged in Section 79 of the Financial Services and Markets Act 2023. I reassure the noble Baroness that the Government remain committed to this work. Just last week, the Government announced their intention to bring forward new rules to tackle deforestation. Later this year, we will consult on the proposed approach to bring in a due diligence framework in regulations under primary legislation, including the Environment Act 2021. We aim to require GB businesses using forest risk commodities to carry out appropriate due diligence, with secondary legislation delivered as soon as possible.
Action on deforestation must be co-ordinated across government to be effective. Therefore, the government commitment already made in the Financial Services and Markets Act 2023 is the right one. HMT will publish the deforestation-linked finance review within nine months of the Environment Act regulations being made, rather than laid. I do not accept that this can be speeded up, but I assure noble Lords that the Government will undertake this review. This approach will support coherent regulation across the UK, protect the internal market and support export-led growth. For these reasons, we do not support bringing forward these timelines.
Amendments 83B and 86A are related to climate risk and the financial gains from environment-linked criminal activity. I reassure noble Lords that, as set out in relation to Amendment 103, regulators are already required to take into account and monitor climate risk, including through the requirement that they have related to the UK’s net-zero and environmental targets, where relevant to their functions. This has already resulted in significant regulatory action.
Additionally, financial crime and money laundering, whether related to environmental crimes or not, is illegal and something that financial regulators, and this Government, already take extremely seriously. The FCA has a broad remit to tackle financial crime under its market integrity objective and requires authorised firms to take steps to ensure they are not used to further financial crime. The FCA has robust powers to supervise these controls and take action against firms which do not put adequate financial crime controls in place.
The Chancellor also announced on 21 October 2025 that the FCA will become the supervisor for professional services firms’ anti-money laundering and counterterrorist financing work. This will replace the existing complex system, involving 22 private sector bodies, and recognises the FCA’s effectiveness in tackling financial crime. Clauses 14 and 48 make necessary changes to primary legislation to enable this reform.
I hope this response clarifies why we believe the current framework is the right one. This has been an engaging debate. We have heard a range of views, and I hope I have convinced the Committee that the Government’s approach is the right one, and that we are making significant progress against our commitments, but that we should not rush to action. I ask the noble Baroness to withdraw her amendment.
Baroness Northover (LD)
I too thank everybody who has contributed to this debate. It is concerning, as my noble friend Lady Kramer anticipated, to hear the Conservative contribution, given the obvious risk to the financial sector of climate change and the devastating effects of ignoring risk, which led to the 2008 financial crash.
That said, the Minister will have heard the concern about Clause 17. I note that he has given a speech saying that the Government are doing this, that and the other in all sorts of different areas, and therefore this is not needed, which is a very familiar argument. I think he is about to discover, if he stops reading his note, that this area will come back on Report, because there is widespread concern right across the House about climate change, climate risk and nature loss. We will come back to this on Report. In the meantime, I beg leave to withdraw the amendment.
Lord Holmes of Richmond
“(2) In Section 3B(1) (regulatory principles to be applied by both regulators), in paragraph (b), for the words from “considered” to the end of that paragraph substitute “taking into consideration the nature of the service or product being delivered, the nature of risk to the consumer, whether the cost of implementation is proportionate to that level of risk and whether the burden or restriction enhances UK international competitiveness;””Member's explanatory statement
This amendment seeks to amend the existing regulatory principle for the FCA and PRA and require that the nature of, and risk to, the consumer and the service or product being delivered must be considered when imposing a new burden or restriction.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to open on this second group of amendments, to move Amendment 81, which is in my name, and to speak to Amendment 87. I thank the noble Baroness, Lady Altmann, and my noble friend Lord Hunt of Wirral for variously co-signing the amendments.
We ask a lot of our financial regulators—not least in recent times, with international competitiveness and the growth objective, and with the Chancellor calling all regulators, including financial regulators, into No. 11 to seek their commitments as to what they will do to advance the Government’s stated growth objective. My Amendments 81 and 87 seek to assist the regulator in bringing some clarity to how to approach these matters.
Amendment 81 looks to the nature of the financial product and of the risk to the consumer, and how the proposed regulatory intervention sits against those factors and the need to promote international competitiveness. It is entirely possible for our financial regulators to balance their objectives and to do right by consumers and by growth, but they need to consider those objectives alongside one another rather, than having a broad-brush, non-specific approach.
This brings me to Amendment 87, which seeks to put in the Bill the nature of the response the regulators could make in their supervisory activity and interventions. It sets out the difference between retail consumers and professional market participants, not least in wholesale markets. I have no doubt that the regulators are well aware of the different levels of knowledge and experience of people who participate in financial products and financial markets, be they retail, professional, or operators in wholesale markets. But it is potentially helpful to set this out in the Bill in order to assist and support the regulators in what they seek to achieve through this approach: to drive the effectiveness of their regulatory activity, to sharpen their supervisory activities and, not least, to have that sense of dialogue—always where appropriate—rather than reaching for more severe interventions at that stage.
I support the other amendments in this group and look forward to noble Lords’ contributions and to the Minister’s response. I beg to move.
Baroness Noakes (Con)
My Lords, I have Amendments 83, 84, 85 and 86 in this group, and I thank my noble friend Lady Neville-Rolfe for adding her name to the first three of them. We are continuing our examination of the role of the regulatory principles, which we debated to some extent on previous Committee days. To recap, Clause 17 proposes to downgrade the regulatory principles in Section 3B of FSMA so that instead of guiding the everyday work of the regulators, they will now feature in only an element of the regulators’ new five-year plans. Some of us have tried, but so far failed, to convince the Minister that this represents a constitutional assault on the effectiveness of your Lordships’ Financial Services and Regulation Committee. I am pleased that a meeting has now been arranged for the committee to discuss this in more detail with the Minister, together with the Financial Secretary, and I hope we can make some progress there.
On the previous day in Committee, I moved an amendment which called for the Treasury to undertake a review of the regulatory principles, because they are a mixture of important things concerning how regulations should be conducted, some duplicated areas and some special interest items. The Government resisted my amendment, with the Minister saying that they had already reviewed them and found them to be fine, which was a completely bizarre judgment.
My Amendments 83, 84 and 85 take a different approach. If Clause 17 is to remain in its present form—that is to say, downgrading the Section 3B principles to abstracts, to be wordsmithed into five-year plans—it is important to rescue the most important element of them: proportionality. Amendment 83 places the proportionality principle, using the rather wordy parent formulation in Section 3B(1)(b), into Section 1B of FSMA, which is about how the FCA should discharge its general functions. This achieves for proportionality the effect of ensuring that when the FCA draws up rules or guidance or does anything else, it will conform to the proportionality principle. That would allow the rest of Section 3B to head into strategic oblivion, but it would preserve proportionality as a matter that should guide the FCA’s work on a daily basis—for example, when drawing up rules or guidance. That, in turn, would allow the Financial Services Regulation Committee to focus on whether the FCA is indeed reflecting the principle of proportionality in its rules. Amendment 84 seeks to do much the same for the PRA. Lastly, Amendment 85 removes proportionality from Section 3B to avoid yet more duplication cluttering up FSMA.
The Financial Services and Regulation Committee received a lot of evidence for its first inquiry into the secondary competitiveness and growth objective. One of the enduring themes was that neither regulator lived out the requirement for proportionality. For example, the confidential round table that we held with mid-market and specialist banks, which are very diverse and very different from the big banks, reported that regulations are substantially similar for all sizes of banks. The confidential round table with insurers and reinsurers found that there were disproportionate responses to consumer issues, failing to differentiate between different business models or different types of firms.
As an aside, the committee had to hold these round tables on a confidential basis because of a widespread fear of regulatory repercussions if attendees articulated views that did not reflect well on the regulators. This is a serious cultural issue that cannot be dealt with directly in this Bill, but it underlines the need for parliamentary accountability mechanisms to be made stronger rather than weaker. We should make these mechanisms as effective as we possibly can.
As well as finding disproportionate regulations and supervision, the committee’s report also highlighted how thresholds, which can aid proportionality, were often used in a way that in practice impacted the willingness and ability of financial services businesses to grow. The proportionality is a very big ongoing issue in financial services regulation and has real-world consequences.
The noble Baroness, Lady Bowles, has tabled similar amendments to mine, which also include the regulatory principle currently found in Section 3B(1)(f). My own view is that paragraph (f) is a restatement of proportionality from a different angle. I agree that the things in it are important, but I hope that we can work to get some kind of streamlined definition of proportionality that incorporates both strands.
My other amendment in this group is Amendment 86, which seeks to import the regulatory principles of the Legislative and Regulatory Reform Act 2006 into the regulatory principles in FSMA. I did this in response to a statement in the Explanatory Notes that the Government intended to use secondary legislation to take the financial regulators out of the ambit of the 2006 Act, which I regard as a bad decision.
It is true that some elements of the very succinct expression of regulatory principles set out in the 2006 Act are already found in Section 3B, but not all of them. The 2006 Act requires all regulators to carry out their regulatory activities
“in a way which is transparent, accountable, proportionate and consistent”.
It also says that regulated activities should be taken only for
“cases in which action is needed”.
This goes beyond Section 3B in requiring accountability and consistency, and I cannot find anywhere in FSMA that says that the FCA and the PRA should regulate only when action is needed.
I cannot think that it is right to dilute the FCA’s and the PRA’s regulatory obligations. They are probably the most important regulators in the land; to let them off the regulatory principles in the 2006 Act is just plain wrong. Since Parliament is, in effect, powerless against secondary legislation, the only way to ensure that the FCA and the PRA remain subject to the 2006 Act principles is to hard-wire them into FSMA, which is what Amendment 86 seeks to do. It may well then be downgraded if the Government have their way on the regulatory principles and Clause 17, but it will not disappear completely from the requirements to which the FCA and the PRA will, in some measure, have to have regard.
Baroness Bowles of Berkhamsted (LD)
My Lords, before turning directly to proportionality, I will touch briefly on sustainable growth, because its meaning has drifted over time. Sustainable growth was not part of FSMA 2000. It was introduced later, in the post-crisis reforms, as a macroeconomic guardrail. Its purpose was to ensure that regulators did not focus solely on narrow consumer protection or market integrity but had regard to the wider economy. It was intended to counteract over-regulation, pro-cyclical rule-making and, in effect, to avoid killing the golden goose of financial services. It was, in fact, a pro-growth statement. Later, maybe since 2018-19, sustainability has expanded in understanding to include environmental concerns, although, of course, they now have their own place and, as debated earlier, will maybe have some further places in legislation.
I do not want the original macroeconomic point to be lost. It was designed as a counterpart to proportionality, a reminder that regulation must support durable long-term economic stability, not contribute to boom-and-bust cycles. In that sense, both proportionality and macroeconomic sustainable growth sit in the same family of “have regards”. They are deregulatory principles intended to prevent unnecessary burden and to ensure that regulation does not itself become a source of economic harm. Of course, climate change has macroeconomic effects, but they are of a different character and should not obscure the original boom-and-bust prevention purpose of this duty.
I turn to proportionality and Amendments 83 to 84A. I congratulate the noble Baroness, Lady Noakes, on Amendments 83 and 84, which would restore the proportionality duties to the regulators’ general functions, and Amendment 86, which would import the principles of the Legislative and Regulatory Reform Act into FSMA. These are thoughtful and constructive amendments, which would save something, but there is a great deal they cannot save—we will discuss that later. In particular, they do not save the second proportionality duty: the duty to have regard to the nature and objectives of businesses carried on by different persons. That is the proportionality principle that protects smaller firms, sole traders, mutuals, benefit companies and individuals. It is not just about cost-benefit or even size; it is about recognising that different types of firms have different objectives and experience regulation differently. To some extent, as the noble Baroness, Lady Noakes, said, this should all be understood within proportionality, but if we leave it out when it is still separately listed in the current regulatory principles, even when they are largely disregarded, that might lead to the wrong conclusions.
That is why I tabled Amendments 83A and 84A, which build on the formulation of the noble Baroness, Lady Noakes, and would restore the smaller and different business protections. As has been explained, these would be inserted into clauses that relate to the discharging of the regulators’ general functions so that they restore these duties to the operational level of rules and supervision. But this limb of proportionality does more than protect smaller firms; it may also protect firms whose objectives legitimately involve taking more risk in the interests of growth and innovation. Parliament’s role is not to eliminate risk but to ensure that it is understood, calibrated and supervised fairly. That is why this proportionality duty matters: it is one of the few operational tools that give Parliament visibility into how regulators weigh those differences in practice.
However, even with these amendments, we still would not save the principle of sustainable growth—growth that is durable, predictable and not a flash in the pan. As I have explained, that was a partner “have regard” to proportionality. I hope that during these proceedings I can persuade noble Lords and the Minister that sustainable growth should also be included. It chimes with competitiveness and growth, but it, too, needs to have a place in the real business part of these clauses, in the general functions. To echo my earlier comment, macroeconomic sustainable growth belongs alongside proportionality, as part of the deregulatory family of “have regards”.
These duties were originally conceived as guardrails to ensure that regulation supports the economy rather than constrains it. That operational balance is worth preserving. All the “have regard” duties were carefully designed and each has a purpose, and some of the others work together, as I have explained.
Lord Ashcombe (Con)
My Lords, I declare my interest as an employee of Marsh, the insurance broker regulated by the FCA. A number of amendments in this group discuss the downgrading of the “have regard to” requirement for proportionality, which would be a backward step. At a time of intense global competition, the Bill should strengthen proportionality, not weaken it. These amendments do that by replacing Clause 17’s downgrading provisions with a clearer, more robust and more meaningful principle, based on the distinction between wholesale and retail markets.
There remains a clear need for a better balance between these two sectors. Evidence supports this. A survey of chief risk officers conducted by the City of London Corporation identified simplification of regulation as the single most important step that regulators could take to foster growth and innovation. Similarly, a recent Prudential Regulation Authority survey showed that fewer than 60% of respondents believe that its current approach to proportionality makes the UK a more attractive place to do business, with most of the remainder expressing neutrality. That is hardly a vote of confidence.
In practice, the current one-size-fits-all approach is flawed. London’s world-leading wholesale insurance market is increasingly subject to rules designed for retail consumers. These regimes impose additional compliance burdens and costs, yet offer little meaningful benefit to sophisticated corporate clients, who require flexibility to negotiate bespoke arrangements tailored to their risks. This is what I have spent my working career doing, and I have never dealt with retail consumers, other than being an insurance buyer myself. There is a massive difference between the companies I advise and seek insurance for and the consumers such as me. Indeed, their premiums are often significantly larger than what I am trying to insure. The two entities should not be regulated by a one-size-fits-all regime.
The Financial Services Regulation Committee has highlighted this issue, noting that failure to distinguish between wholesale and retail drives bureaucracy and costs. Evidence from the London Market Group revealed that one UK broker, for example, employs far more compliance staff domestically—almost four times more—than in the EU on a proportional basis. Stronger proportionality would not weaken consumer protection; it would enhance it, allowing regulators to focus on where risks are greatest. In short, we should seize this opportunity not to weaken proportionality but to make it work properly for growth, innovation and the effective protection of consumers.
Baroness Kramer (LD)
I very much support the two amendments of my noble friend Lady Bowles. There is often an assumption that those of us who feel that regulation plays an important role have no instinct or desire to see proportionality in place, which could not be more untrue. My history is as a commercial banker, back in the days when we used to participate intensively in writing the loan documents and creating the covenants associated with our lending, whether to small companies or to some of the largest on the globe. Frankly, covenants that were off the shelf were completely inappropriate for providing the protection we needed in many cases. They were just useless exercises in paperwork for the companies involved. We used to reshape the loan agreements on that basis and, frankly, it worked exceedingly well.
When I look at the amendments, I am glad that proportionality is being recovered from the scrapheap that would result from Clause 17. That is important, and the way that my noble friend Lady Bowles, framed it is particularly significant. Both for the PRA and the SRA, the focus is proportionate to the benefits expected to result from the imposition of the burden or restriction, recognising the difference in size, nature and objectives. I agree with her that this really needs to be considered through the lens of genuinely sustainable—as in durable as well as environmental—growth. That is a very important addition to the discussion.
I am disturbed by Amendment 81. I am not disturbed by most of it, but when I read
“proportionate to that level of risk and whether the burden or restriction enhances UK international competitiveness”,
I begin to get somewhat queasy, because the lowest common denominator is not where we should be headed. We need to genuinely assess risk—the cost of dealing with and understanding it—in a very direct way. I have always thought that a distortion was introduced by the competitiveness objective, and I am afraid that it is reflected in Amendment 81, in my reading at least.
I hope that the Minister understands that proportionality is not something for five-year strategies. It is central to the work, culture and behaviour of a regulator; as such, it clearly belongs in principles that sit on the face of the Bill.
Baroness Neville-Rolfe (Con)
My Lords, I am grateful to my noble friend Lord Holmes and other noble Lords for bringing forward their amendments in this group.
I was glad to hear that the Minister will meet the Financial Services Regulation Committee to discuss this part of the Bill. I am sure he will be as disturbed as I was to hear about the widespread fear of regulated businesses in expressing any criticism of the regulators—the most important regulators in the land, to quote my noble friend Lady Noakes. We certainly rely on financial services and good regulators for growth in this country.
The central theme of this group is the proportionality of regulation. That is an absolutely fundamental requirement for all regulation; it is particularly so when we are talking about small and medium-sized enterprises, which are less able to afford the costs of regulation—in terms of diversion of time, regulatory fees and legal fees—and are the most held back by excess regulation.
There were 5.6 million small businesses in the UK at the start of 2025. They account for three-fifths of employment and around half of turnover in the UK private sector. Total employment in SMEs was 16.9 million—60% of the total—with turnover estimated at £2.8 trillion, or 51% of the total. Having financial services that operate with proportionality and common sense is important to them; indeed, almost every single one of these firms will access and use financial services through the course of their operations. It is even more important to the thousands of SMEs that operate in financial services, whose remit is of course being extended by the Bill, and the thousands more SMEs in the legal and professional firms that advise on financial services.
In practice, regulation often falls most heavily on precisely those smaller firms least able to absorb it. The reasons are obvious: SMEs do not have large compliance departments or in-house legal teams; and they do not have armies of advisers whose job is to interpret regulatory requirements. In many smaller firms, people wear many hats, as I know well. This means that a regulatory requirement that may be manageable for a large institution can be a serious burden for a smaller firm. Above all, regulation should be designed in such a way that it protects consumers and supports market integrity without imposing unnecessary burdens.
Amendments 83 and 84 in the name of my noble friend Lady Noakes, to which I have added my name, go to this underlying point by seeking to elevate proportionality in the FCA and PRA frameworks; it is pleasing to have the support of my noble friend Lord Ashcombe and the Liberal Democrat Front Bench in this. Proportionality should not be a box that regulators tick after the main decisions have already been made; it should be central to how they think about regulation from the outset.
The amendments in the name of the noble Baroness, Lady Bowles, raise an important point about tailoring regulation to the size, nature and objectives of different firms. The regulatory framework should recognise that a mutual does not have the same objectives as a major bank, and that different business models can present very different risks; the noble Baroness explained all that eloquently.
I would also like to comment on Amendment 86 in the name of my noble friend Lady Noakes. As she said, the Legislative and Regulatory Reform Act 2006 requires regulators to act in a way that is transparent, accountable, proportionate, consistent and targeted, ensuring that regulation is effective without being unnecessarily burdensome. Those are fundamental points and likewise need to be protected as guiding principles.
In closing, I would be grateful if the Minister could assure us: first, that proportionality will be genuinely embedded in regulatory decision-making, ideally by amending the Bill on the lines of Amendment 83. We hope he will look at this issue very seriously. Secondly, can he assure us that the FCA and PRA will in future be expected to take account of the particular position of SMEs, mutuals and smaller firms when designing and applying rules? A proportionality duty would go a long way to fixing the problem and would seem to fit in well with government policy to support small business promoted by his other department, the DBT.
Lord Stockwood (Lab)
My Lords, this will be the first of many groups where we discuss the frameworks that the regulators operate under, so I will say a few words about that framework before turning to the amendments.
Many of these amendments, and those in other groups we will take today, focus on the regulators and their accountability to Parliament. Parliament has enshrined the principle of regulatory independence into primary legislation through the Financial Services and Markets Act 2000, which obviously everyone in the Room knows as FSMA. The Government continue to believe that this model best serves the UK’s long-term interests by delivering effective regulation, informed by evidence and free of political interference. It is absolutely right that financial services markets, firms and activities are overseen by operationally independent, expert regulators. The FSMA model sets out clear roles and responsibilities for Parliament, the Government and the regulators. Parliament sets the objectives for the regulators and holds them to account for how they further those objectives when discharging the statutory functions that Parliament has given them.
The Government and Parliament must be able to scrutinise the work of the regulators to evaluate how effective they are and the impact that their rules are having. It is important that the regulators remain independent and accountable for their actions. The regulators are directly accountability to Parliament, and there are a range of mechanisms within FSMA to support that accountability and allow Parliament to effectively scrutinise the regulators.
A critical part of regulatory independence is the idea that the regulators listen to legitimate criticism and scrutiny—and the regulators do listen. For example, the FCA decided not to progress some changes to its proposed enforcement policy following scrutiny from the House of Lords Financial Services Regulation Committee. However, it is clear from the debate today and from outside the Room that there is room for improvement.
On the recent publication by the Financial Services Regulation Committee, chaired by the noble Baroness, Lady Noakes, I recognise the important work of that committee in its Growing Pains report and share its ambition to see a regulatory culture that is more proportionate, more responsive and more supportive of growth. The committee’s recommendations were directed principally at how regulators exercise their functions rather than at the statutory framework itself. The Bill provides greater legal clarity and certainty but it remains for regulators, through their leadership, judgment and accountability to Parliament, to deliver the cultural change that the committee rightly called for.
On the amendments in this group, Amendments 81, 83, 83A, 84, 84A and 85 each seek to address various aspects related to the principle of proportionality. I recognise the concerns and strength of feeling that I have heard today and I agree that the principle of proportionality is extremely important and must remain central within the regulatory framework.
The Bill’s approach is not to remove proportionality from meaningful consideration. Instead, the reforms will require the regulators to have regard to proportionality in the development of their long-term strategies, ensuring that they are applied in a more coherent and visible way at the strategic level. This would mean that, for example, rather than considering if an individual proposal is proportionate, the regulators will be required to set out clearly how they have considered whether their strategy and workplan as a whole results in burdens on firms that are proportionate to the outcomes they achieve. This change will support more meaningful scrutiny of how the regulators are considering and responding to the regulatory principles, and will support greater overall scrutiny of the regulators’ work.
Amending the framework to prescribe in detail how the regulators must recognise differences in the size, nature and objectives of the firms it regulates goes far beyond the current framework and risks adding unnecessary complexity to the framework. It is for these reasons that the Government cannot accept these amendments.
Baroness Noakes (Con)
I am afraid the noble Lord is going to be assailed from all sides. I was glad to hear the Minister refer to the work that the committee did in relation to the enforcement proposals, otherwise known as naming and shaming. Is he aware that if the proposals in Clause 17 go through, we will be unable to interrogate the FCA, in this case, on the proportionality of particular examples of what they are doing, in this case to change the enforcement rules? Proportionality there related very specifically to a set of proposals. For example, those proposals, which were to name people much earlier in the enforcement process, could have had the effect of wrecking the businesses of very small players in the financial services market. That is something that we were very keen to draw the attention to.
Lord Stockwood (Lab)
I understand it, and I think I have demonstrated in the debate today and outside—I am looking forward to the meeting next week—that we remain open-minded. We are trying to achieve the balance between the regulatory oversight that we believe already exists and the feedback that we have had from the committee. I remain open to those conversations. We believe that the framework tries to keep that balance between the oversight that exists in Parliament and the independence of the regulators, but we genuinely look forward to that constructive discussion.
I turn to Amendment 87, which seeks to expand the regulatory principles and make them more detailed and directive. The Government’s view is that FSMA should provide a principled framework within which the regulators exercise expert judgment. This amendment goes far beyond refining the existing principles and would, instead, replace them with a highly prescriptive set of instructions that risks legal complexity, rigidity and dispute over interpretation.
The concepts highlighted in the amendment are important, but the Government do not believe they should be hardwired into primary legislation in this level of detail via the regulatory principles. The issue is not whether compliance costs, innovation, competition or post-implementation review matter—they clearly do—but whether it is right to place these requirements in primary legislation. The Government’s view is that it is not. It is not a sensible approach to grant the regulators significant powers and responsibilities, and to then overprescribe with how they must fulfil them.
Baroness Bowles of Berkhamsted (LD)
The Minister keeps saying that these things should not be in primary legislation, but they are in primary legislation, and they stay in primary legislation. Even if you try to take the effectiveness away by Clause 17, everything that I referred to in my speech, and that the noble Baroness, Lady Noakes, referred to in hers, is about the existing regulatory principles that are in the Act already. Therefore, I do not understand saying that they should not be in primary legislation—they are.
Lord Stockwood (Lab)
Let me get back to the noble Baroness on that. I believe the amendments were trying to change and streamline the regulation, but I want to make sure I give a precise answer rather than a quick judgment on that.
Let me turn to Amendment 86, which seeks to bring the regulatory principles of the Legislative and Regulatory Reform Act 2006 into FSMA. The Government recognise the importance of certainty in the regulators’ framework. FSMA already contains its own carefully developed set of duties, objectives and principles, designed specifically for financial services regulation. The Legislative and Regulatory Reform Act is very broad in scope, and the principles it contains are important ones. But there is significant overlap between these principles and those already in FSMA, so adding them here would bring duplication and legal complexity, rather than clarity. These will now be considered at a strategic level as a result of Clause 16.
In some way, the Government agree that proportionality matters, that unnecessary burdens should be avoided, and that the regulators must be held properly to account for how they exercise the significant powers Parliament gives them, but they should not be overly constrained in how they approach their work. We should have confidence in their expertise and regulatory judgment, and confidence in the mechanisms in place that allow us to ensure that they are performing as they should do so. Ultimately, an overly prescriptive approach that ties the regulators would not be in the interests of those they regulate, or those protected by their regulation.
This is not a question of whether Parliament should hold regulators to account. We all clearly agree that it should. The matter before us is where we think the right balance lies between democratic oversight and allowing regulators to carry out statutory responsibilities effectively. I recognise that not everyone will agree that the Bill strikes that balance in the right place, and I respect the arguments that have been made this afternoon and the continuing debate that we will have. I hope noble Lords will also accept that I have listened carefully to those arguments that have been made. I will respond either in writing or in meetings outside the Room to any points that I have not answered fully today. I therefore ask the noble Lord to withdraw his amendment.
Baroness Neville-Rolfe (Con)
Perhaps I might press the Minister on the subject of smaller businesses and the Bowles amendment to the proportionality proposal, which takes account of differences in the size, nature and objectives of businesses when the regulators are plying their trade. I am not quite clear what the Minister feels about these smaller businesses and whether he agrees that it is necessary to deal with them in a slightly different way.
Lord Stockwood (Lab)
My business insured a million small businesses, so I think they are vital to the UK economy. Let me come back to the noble Baroness with a full answer on that. It is critical that we make sure that they are protected.
Baroness Noakes (Con)
To return to the question of the 2006 Act, the Minister said that FSMA’s regulatory principles have been specially crafted for financial services. They have, over a period of time; they have changed rather a lot since they were first put into FSMA. However, when the 2006 Act was passed, there was a specific decision, by the Government, to include the FSA within its scope. They were all brought within scope by secondary legislation, just as the Government now propose to take them out by secondary legislation. Why do the Government take a different view from the Labour Government in 2006—who decided that those regulatory principles have, as I have explained, some important additional elements to those within Section 3B—and think that those additional principles are not now relevant?
Lord Stockwood (Lab)
It goes without saying that there are many things on which I do not agree with the Labour Government of 2006, but we will leave that for another day. We believe that this is already covered. I do not want to allow the noble Baroness’s expertise to be undermined by my relative inexpertise, so let me come back in writing on that. The advice I am getting is that we believe that it is already covered, but let me come back in writing before our meeting next week.
Lord Holmes of Richmond (Con)
I paused there in case somebody else wanted to make another point—I did not want to jump in. I thank all noble Lords who participated in this excellent, informed and important debate. I would never seek to offer a Minister of the Crown advice, but, having said that, when the noble Baronesses, Lady Bowles and Lady Noakes, speak on these matters, it is worth paying attention, reflecting, reading Hansard and reflecting again.
I thank the noble Baroness, Lady Noakes, for all the work she has done as chair of the FSR committee. It has produced excellent reports that always cut to the heart of an issue. At a time when, as she rightly identifies, more and more is coming before Parliament as regulation which, on the Floor of the House, we have so little role in which to play or influence to bring to bear, the role of her committee is even more significant and important.
My noble friend Lady Neville-Rolfe summed up with her usual brevity and precision. This is all about proportionality and common sense. The only tiny addition I would bring to that is specificity. In essence, all the amendments in this group have been tabled for the same reason that we debated these subjects on previous committee days. Strategies and frameworks are important, but events do not happen in strategies and frameworks. Events happen: they impact individuals and businesses, particularly small businesses, minute by minute, hour by hour—or, to quote a phrase apropos of nothing in particular, events happen on a day-to-day basis. All the amendments in this group are significant and worthy of reflection.
In conclusion, I apologise profusely to the noble Baroness, Lady Kramer, for causing her to feel queasy. I can only hope that my financial inclusion amendment in the next group can act as an effective antiemetic. For now, I thank all noble Lords who participated in this important debate and beg leave to withdraw Amendment 81.
Baroness Tyler of Enfield
“(2) In section 3B(1) (regulatory principles to be applied by both regulators), after paragraph (h), insert—“(i) the need to consider financial inclusion.””
Baroness Tyler of Enfield (LD)
My Lords, I rise to speak to three amendments I have in this group: Amendments 82, 95 and 97. This group is all about financial inclusion. It is a very important group. I am also very sympathetic to the amendments in the name of the noble Lord, Lord Holmes, and my noble friend Lady Kramer.
Amendment 82 would place financial inclusion where I believe it firmly belongs: among the regulatory principles set out in this legislation which the regulators must consider in carrying out their functions. This is not a novel idea. When I had the privilege to chair this House’s Financial Exclusion Committee back in 2017, we recommended that financial inclusion be given a firmer footing in the regulators’ duties. Indeed, when this House last legislated on these matters, in the 2023 Act, I am sorry to say that financial inclusion was not included as part of the regulatory principles. Despite a concerted effort at the time to put it on a statutory footing, we did not succeed, and my amendment would simply correct that. Financial inclusion, which determines whether millions of people can access the essentials of modern economic life, surely belongs in legislation.
However, the Bill as drafted moves in the opposite direction, confining the regulatory principles to strategic activities only, thus removing them from day-to-day decisions that impact the lives of millions of people, particularly those who are financially excluded. My amendment would ensure that financial inclusion remains a live consideration in the regulators’ day-to-day work. I say this to the Minister: if financial inclusion is genuinely a priority for this Government, why does it not sit among the principles the regulator must consider, and should these principles not be considered when implementing the activities that truly affect many people’s daily lives, rather than being set aside to apply only to more abstract strategic work?
I am conscious that, in the Committee’s debate last week, there were those who felt that any new principles should meet the “essential and enduring” test—I think the noble Baroness, Lady Noakes, said that. In my view, financial inclusion is essential and enduring. Whether people can access banking, credit, insurance and savings is not a passing policy priority but a permanent structural feature of how the system serves, or fails to serve, the population. It has been a concern for decades and will remain one.
I turn now to my Amendments 95 and 97, which would require the FCA to report each year on how the exercise of its functions has affected financial inclusion, and to be ready to account to relevant parliamentary committees, which would include the Treasury Committee and the Lords Financial Services Regulation Committee, which we have just heard about. My purpose here is specific and, I hope, constructive: to ensure that financial inclusion is reported on openly every year and that the public and Parliament can scrutinise the activities of regulators in ensuring that we all have access to the financial services and products we need at a price we can afford.
We all know that what gets measured gets done. What is reported on, transparently and regularly, is far harder to neglect than what is not. This is not an abstract concern. When I chaired the Select Committee, we found that 1.7 million adults were without access to a basic bank account; that communities were losing their bank branches at an alarming rate, as we focused on last week; and that households on the lowest incomes were paying more for credit, insurance and essential services simply because they had less money. Nearly a decade on, too many of these problems persist. An annual report will give this House and the public a clear and reliable picture, year on year, of whether the position is improving or deteriorating on things such as access to bank accounts, access to face-to-face banking services, affordable credit and insurance—the list goes on.
Such a duty asks the FCA to ensure that those who are excluded from financial products and services are taken into account, with their experiences seen and their problems addressed. It creates no new rules for firms, which is an important point. It simply ensures that the fundamental question—“How are the most financially excluded people in this country being served?”—is asked and answered each year, in public, before Parliament.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow the noble Baroness, Lady Tyler. I had the equal pleasure of serving alongside her during her excellent chairing of the Financial Exclusion Committee.
As the noble Baroness rightly identified, since we published our report, financial exclusion—or a lack of financial inclusion—has persisted. She rightly identified the Government’s financial inclusion strategy. There are a number of good things in it, but I ask the Minister: why was it so light on the potential role that fintech, as well as broader technologies, could play in addressing some of the elements of financial exclusion? It was largely silent on those issues.
I shall speak to Amendment 104 and all the other amendments in my name in this group. Similarly, I suggest having a financial inclusion objective and detailed reporting requirements therein. We have the Financial Inclusion Commission, which has some excellent members, but financial exclusion persists.
It is right to have our financial services regulator further empowered to be the lightning rod and the focus for this whole question of financial inclusion. To talk about the principles again, the Government are keen on growth, but financial inclusion does not run counter to that growth or the international competitiveness objective. Financial inclusion is essential to it: enabling people to have financial services and be financially included is likely to increase digital inclusion and social inclusion, as employees become self-employed and the employed become economically active. I ask the Minister: are these things—enabling and empowering financial inclusion—not what any Government should be about?
I suggest a financial inclusion unit for the FCA, so that it can be a powerhouse for innovation and research and a real regulator and driving force for financial inclusion. When the Minister comes to respond, can he identify how financial inclusion has changed in the almost two years of the current Government? Is it not time for greater focus and effort on this most significant of issues?
In many ways, the most significant issue when it comes to financial services is enabling and, in reality, empowering everybody to have a fair go, and to become active and enabled in our economy and our society. Amendment 161 builds on this, but in the specific context of broadening data-sharing requirements—always on a consenting and empowering basis—to look again at what we can do with new technologies. Let us look at other sources of data such as rental history, which can be so helpful in enabling financial inclusion—but currently are far from happening, never mind becoming the norm—to support those millions of individuals. Where is innovation when it comes to financial inclusion? Does the Minister not agree that these amendments would enable the Government to have a human lead on these technologies, with a far greater chance of much greater financial inclusion for all citizens?
My final amendment goes to KYC, or what passes for it. In many ways, you can see this within financial inclusion, where all too often, in whichever context one considers it, “know your customer” means almost completely the reverse or nothing of the sort. Does the Minister not agree that it is time to look again to innovation and the technologies that can be deployed to give us effective KYC and AML? Or does he believe that, because one is able to put a gas bill in paper form in front of a financial services business, it shows just what an upstanding citizen you must be and gives all that is required on KYC and AML? It is so gravely in need of transformation. We have the tools and technologies to achieve this, which would also add to significant financial inclusion. I look forward to the Minister’s response.
Lord Davies of Brixton (Lab)
This is an important and interesting debate. I want to draw attention to and base my remarks on Amendment 95, which refers specifically to the poverty premium in insurance. This is a theme that runs across financial services. It perhaps does not get the attention it deserves, because one of the main reasons for financial exclusion is of course poverty, and poverty is clearly an issue where the Government have a clear and central responsibility.
In practice, the approach taken by the FCA has been to use the obligation for the consumer duty as the primary vehicle for dealing with the poverty premium. The FCA has directly linked the consumer duty to the poverty premium, with the argument that firms are required to deliver good outcomes for retail customers and ensure that products and services offer fair value. The FCA has not itself specifically tackled the poverty premium head on; in effect it has passed the responsibility to providers.
The most obvious manifestation of the poverty premium arises with premium finance, whereby people have to pay premiums by instalments over the year instead of paying a lump sum at the beginning of the year. The terms on which they are financed have been open to significant criticism. People think they are paying the contributions monthly but, in practice, someone lends them the money to pay the initial contribution and they repay that loan over the year. There is a widespread lack of understanding that, in fact, they have two contracts: the insurance contract and the loan contract. The terms of that loan contract have been called into question. Figures from the FCA suggest that about four-fifths of customers in financial difficulty use premium finance and that, in 2024, 60% of motor insurance customers and 41% of home insurance customers paid by instalments because they could not afford to pay annually. There is probably a series of people who fail to do the sums and just pay monthly because that looks easier.
The FCA has found that the cost of premium finance has fallen since 2022, and made it clear to firms that they are under a clear requirement to ensure that fair value is offered. There is a technical problem here in that, as well as the financial issues, with some forms of insurance there is an underwriting issue. It is possible to argue that someone who pays monthly is not in the same underwriting position as someone who pays yearly. It is very difficult to pin down that aspect of the issue. The FCA accepts that this poverty premium exists and believes that some of the premium finance provides a poor product. It has accepted that
“financial regulation cannot tackle financial exclusion or the related ‘poverty premium’ alone. We must work together across government, regulators, industry and consumer groups”
to deal with it.
The Financial Inclusion Strategy published in November refers to the issue, and we now have the FCA’s 2026 insurance priorities, which include expanding access to insurance as a central priority and emphasise the importance of helping vulnerable groups. However, the campaigning group Fair by Design has argued that the FCA is not doing enough to deal with these issues. It points out that the FCA has said that it has the tools to deal with this but, in practice, is just leaving it to the individual companies to act responsibly.
Baroness Kramer (LD)
My Lords, I will speak briefly in general across this set of amendments and specifically to Amendment 141 in my name, supported by the noble Baroness, Lady Altmann.
In the general remarks, I say to the noble Lord, Lord Holmes, that I am excited and thrilled by his amendments in this group and I support every one of them—I would even open champagne; I am that pleased. I say to my noble friend Lady Tyler that I totally support the amendments that she has introduced here. I share with both of them the perception that financial inclusion is absolutely at the core of the requirement that we must place on our financial services sector and on the regulators that deal with it.
To pick up on a point that my noble friend Lady Tyler made, the consumer duty does not deal with financial inclusion, and that is exactly right. The consumer duty is very much a protection against mis-selling. It is not a duty of care, which could indeed have required that gaps left in the market are filled and the regulator take steps to fill them; the regulator was absolutely determined not to have that responsibility when this House attempted to make it address the issue, and the Government of the day were also very determined that the regulator should not play that role. We cannot look to the regulator to be a key player in financial inclusion.
In the five-year strategy of the FCA—I really have read that document—there is reference to financial inclusion; in fact, it is in big, black, bold letters. The problem is that what it anticipates as the role that it will play is to try to address how low financial capability holds people back from accessing financial services and how it could support them in managing their financial life. That is important and it matters, but the reality is that for many people who are excluded, the way to give them support is not to try to get them digital—it would be brilliant if you could but that is not the reality—but to deal with those people as they are in the world that they live in. There is absolutely no reference in this five-year strategy that you could in any way interpret as related to what has become the Richard Lloyd review—to things such as banking hubs. It is focused solely on the individual, whereas issues that we have addressed in previous groups have also been about the financial exclusion of small businesses from financial services. There is no reference to any of that.
I have had so many conversations with the FCA over the years, and it has said things like, “Yes, if we had a set of community banks, that would be absolutely brilliant; CDFIs are absolutely wonderful—not our job. If they appear, we will make sure that we regulate them appropriately, but it is not our job to fill that gap and we resolutely hold to that position”. That clarity needs to be here in this debate. I will not repeat what has been said because it was so well said by the three previous speakers, but I very much hope that the Minister will pay serious attention to this issue. From things that he has said in the past, I hope that he takes it to heart. It very much belongs in a very central way in primary legislation.
The issue I am raising is perhaps not an obvious one to raise in the context of this Bill, but it is in scope. It is dear to my heart, but I think it is widely supported. I am using this opportunity to deal with an issue that, frankly, the Government should have dealt with without any problem. It is child trust funds and the ability of young adults with learning difficulties to access those funds that sit in in their name. My party leader, Ed Davey, who, as I think all in this Committee know, has a son with very severe learning difficulties, has written of his eight-month battle to access the child trust fund put in place and invested in for the benefit of his severely disabled son, who is now 18. The fund should be easily accessible when a child turns 18, but, as the Davey family found out the hard way, this is not true for children with learning or other disabilities who lack the capacity to fill in the forms themselves.
The process of applying to the Court of Protection for a deputyship order is Kafkaesque, consumes endless time and places such a burden and cost that many parents give up altogether. The many steps, and my goodness there are many, include obtaining written permission from three different relatives to demonstrate that you are unlikely to abuse the funds that you will access, and obtaining various doctors’ assessments—well, perhaps that is fair—but then the courts kick in. The Court of Protection charges £412 for a deputyship order. It requires you to obtain insurance against misuse, and the Davey family found that that cost £48. Then comes the Office of the Public Guardian, which charges £100 for its assessment, and it then levies an annual supervision charge of £320. If you add this up, it basically becomes £1,000 to be able to access a child trust fund for your severely disabled child.
What is really extraordinary is that most child trust funds do not have a lot of money in them. I think the average amount is £2,000. You would have to spend 50% of it to be able to access that fund for your child. The people accessing it are parents whom the DWP already relies on to deal with a variety of much more significant pots of money to support that child. I use the Davey family not to ask for any kind of sympathy, but here is an MP whose wife is a lawyer, and they cannot work their way through this maze. How are people without those kinds of expertise going to work their way through this system?
Unfortunately, there is a new legal offering from specialists who will, for a significant sum, offer to negotiate the way through for you. That is a practice that none of us wants to encourage. There are a few child trust fund managers who handle the process a bit better and have been helping some of the people whose funds they manage to minimise the process, but it is a lottery in terms of finding that you have taken out your child trust fund with an entity that takes that approach. Charities estimate that 80,000 to 123,000 young adults are essentially locked out of their child trust funds.
I tried to look for what response the Government have been making to the overtures of the charities and other civic society groups that have been out there trying to speak for these youngsters. Two things came to my attention. The only response I could find from the Department of Justice was that it has now digitised the application form and provided a guide.
My amendment would force the FCA to simplify the whole process for CTFs paying out under £5,000 in any one year. It is formulated around an amendment put before the House in 2021—I am pretty sure that is the correct year—by the noble Lord, Lord Young of Cookham, who is really skilled in developing, designing and presenting the appropriate amendments. In speaking to that amendment, the noble Lord, Lord Blunkett, who was the Minister when child trust funds were put in place, made it very clear that no one had thought of this particular set of problems and that that was why the system was designed in a way that set up this obstacle course. It was not intentional or planned; it was simply a failure to recognise what could happen and has in fact happened.
I say this to the Minister: all the arguments we hear in support of the Bill are about deregulation; here is a piece of deregulation that I think no one could argue with, and which I would definitely and clearly support, as would my party and, I suspect, many others. If the Minister cannot control this himself, could he please go away and berate his colleagues? These youngsters need to be able to access their funds. We are talking about small pots. Simply digitising the 106 sections of the application form is not the answer.
Lord Pitt-Watson (Lab)
My Lords, if I might add to this debate, I begin by noting the huge cross-party agreement we have on lots of the issues the Bill raises, most particularly on this issue of ensuring access to financial services for everyone. That is what is behind so many of the amendments here. It is also the issue that was raised in the debate about affordable credit by the noble Baroness, Lady Kramer, and the right reverend Prelate the Bishop of Manchester, and at Second Reading by the noble Baroness, Lady Hyde, and the noble Lord, Lord Kamall. We all, from all parties, want to know that such services are available to everyone. The question is simply how we can make sure that that takes place and that the industry that has to be there to deliver it buys in to making sure that those services take place. We need to be sure that our actions as rule-makers are helpful in that regard.
At Second Reading, I heard a number of speeches about excessive regulation, all doubtless intending to encourage financial services to do their job better. But there is an issue with regulation and how much of it there is. If there is any concern about this amendment, that is absolutely not its objective. Critically, we need financial services to be available to everyone; the question is whether, by regulating them, that gets us to where we want to be. Maybe it will, but we might argue that, unless we have persuaded those whom we wish to influence that they will strive to improve performance in this regard, the danger is that it might just be another regulation. Whatever we ask the FCA to report, we need to first take a step back and think through how this will affect performance on the ground. It is the finance industry that has to deliver this, and we need to be working in partnership with it—with the industry, customers, potential customers, the Government and regulators, moving ahead together. There are also initiatives, some of which might work, and which, if they had real momentum, with everyone behind them, might start to deliver the sort of things we want.
As many noble Lords know, I have done quite a lot of work with the financial services industry in Scotland. Its industry body, Scottish Financial Enterprise, has laid out as its objective that it intends to
“have a financial services system that allows every citizen and business of Scotland to connect and access appropriate services”.
Wow. Is that not exactly what we are trying to get to happen? But who is following up to make sure that that statement, that vision is realised? It feels to me that we need a new settlement, and institutions to see that such a settlement is delivered.
Baroness Neville-Rolfe (Con)
My Lords, we understand the reasoning behind these amendments. Financial inclusion is, of course, an important objective, as the noble Baroness, Lady Tyler, explained so clearly. Indeed, that is precisely why we have tabled amendments on financial education, to be discussed at a later stage. We believe that one of the most effective ways to improve financial inclusion is to ensure that from a young age, people have the knowledge, confidence and capability to understand how to manage their money to avoid harmful financial decisions and to access the products and services that are right for them—and, I should add, to understand new technology, data and digital inclusion, as my noble friend Lord Holmes explained.
However, we are not persuaded that the mechanism proposed in these amendments is the right one. In particular, when it comes to proposals such as expanding the scope of Section 3B of FSMA and adding further regulatory principles, we encounter the same problem that I raised in previous groups: every time Parliament adds another principal duty, reporting requirement or objective to the regulator’s framework, it may sound reasonable in isolation but, cumulatively, these duties feed through into more process, more internal assessment, more reporting and more consultation paragraphs. That is more compliance requirements, more boxes to tick and less overall efficiency for financial services.
We should be careful not to assume that every social or economic objective is best delivered by placing a new statutory duty on the FCA or PRA. Regulators already have extensive responsibilities, so we have to make the choices with care because, at some point, the accumulation of such duties becomes counterproductive. It makes the regulatory priorities less clear and it can slow decision-making and create uncertainty for firms. In short, it is unwise.
As I have explained, we would improve inclusion via improved education, and we are about to introduce an amendment on debanking, which may be relevant. There is a lot of partnership and voluntary activity, as the noble Lord, Lord Pitt-Watson, hinted at—and as I remember from my time with Tesco Bank, which was centred in Scotland and did some terrific work.
The problem of child trust funds was mentioned by the noble Baroness, Lady Kramer, and it seems like a popular cause for deregulation by the Treasury and the regulators. I am sure the Minister will want to comment on that.
Lord Stockwood (Lab)
My Lords, I am grateful to the noble Lord, Lord Holmes of Richmond, the noble Baronesses, Lady Tyler of Enfield and Lady Kramer, of Richmond Park, and other Peers for drawing attention to the important issue of financial inclusion. As someone who grew up in poverty, it is not an abstract concept to me and the community I come from.
The noble Baroness, Lady Tyler of Enfield, asked if I would meet her to discuss this agenda further. I would of course be happy to meet her and any other noble Lords who would like to discuss the topic. I will write to her ahead of that meeting on the FCA’s consumer duty and what it means for financial inclusion, but I assure noble Lords that the Government are not relying on the FCA’s consumer duty as a catch-all solution. The Government agree that people should be able to access the financial services they need—that is an important objective—but we think that these amendments are not necessary to achieve that.
Amendments 124, 128 and 104 would give the Financial Conduct Authority a new statutory financial inclusion objective and require it to establish an independent financial inclusion unit. These amendments focus on action and measurement. Financial inclusion requires all parts of the system to work together. That is why it is important for the Government to lead this agenda, not the FCA. To secure action, we have published a Financial Inclusion Strategy, setting out an ambitious package of measures to improve access to financial services.
The FCA is closely involved in delivering this work. Sarah Pritchard, the deputy chief executive, also sits on the Financial Inclusion Committee, which monitors the strategy and supports its implementation. The Government have taken formal steps to reinforce the FCA’s role in this area. In her most recent remit letter, the Chancellor asked the FCA to have regard to reinforcing financial inclusion, and the FCA is responding to that ask.
The FCA’s 2025-2030 strategy identifies helping consumers to navigate their financial lives as one of its four strategic priorities. As part of this, it highlights an increase in the consumers who hold key products as a success metric for its work, and it is acting on this. For example, to advance the Financial Inclusion Strategy’s aim of boosting savings, the FCA developed a regulatory statement to support the uptake of workplace saving schemes. On measurement, the FCA already plays an important role in tracking progress on financial inclusion through its flagship financial lives survey, which provides a strong evidence base for monitoring outcomes over time.
I recognise Amendment 128’s emphasis on independent scrutiny and prioritisation of financial inclusion in the FCA’s work. As part of the FCA’s statutory framework, the consumer panel is in place to represent the interests of consumers and provide independent advice and challenge to the FCA. As already covered, the FCA’s strategy and membership of the Financial Inclusion Committee means that financial inclusion is embedded in its work. This is more effective than an operationally independent unit.
On oversight and transparency, I understand the intention behind Amendment 104, which seeks to require the FCA and PRA to report annually on financial inclusion, and Amendment 95, which would require the FCA to report on financial inclusion metrics and how it has acted to improve financial inclusion. However, these amendments are not necessary or appropriately targeted. The regulators already report publicly and are accountable to Parliament. Moreover, the FCA’s financial lives survey provides a biannual update on a wide range of financial inclusion metrics in the UK, including the numbers of unbanked people, those who have been declined for a product and the experiences of vulnerable customers. The FCA is also closely involved in the delivery of the Government’s Financial Inclusion Strategy, which is a public document and subject to public review next year. Amendment 104 would place reporting duties on the PRA, whose statutory role is prudential regulation, creating uncertainty about the PRA’s remit and what it would be expected to report against.
Amendment 82 would add financial inclusion to the regulatory principles that the FCA and the PRA must have regard to when discharging their general functions. The Government do not agree that this is the right mechanism to ensure that financial inclusion is prioritised. The amendment would require unclear action from the PRA. Parliament regularly holds the regulators to account for their work on financial inclusion. The Commons Treasury Select Committee recently held a session with the FCA’s deputy CEO for its Financial Inclusion Strategy inquiry. Amendment 97’s requirement that the FCA be prepared to demonstrate to relevant parliamentary committees how it has had regard to financial inclusion is therefore unnecessary. Any relevant Select Committee can call the FCA and hold it to account for its work on financial inclusion.
Amendment 141 seeks to require the FCA to establish a new legal route for third- party access to control another person’s assets, which goes well beyond its regulatory remit. The law requires parents or guardians to have legal authority to make decisions about the financial assets or property of their adult children. This includes accessing funds held in a mature child trust fund. Decisions about who may act on behalf of a person lacking capacity are governed by the Mental Capacity Act 2005 and are determined by the courts, reflecting the need for safeguards to protect vulnerable people. It is not appropriate for FCA rules to seek to substitute or override existing rules and processes. The Ministry of Justice recognises that the process of obtaining access can be challenging for the parents and carers of young people who lack capacity. It is exploring how the Government can best facilitate access for parents and carers to child trust funds on behalf of their children. I would be happy to raise this with the MoJ rather than berate it, as the noble Baroness suggests.
Turning to Amendment 161, I recognise how a broader set of data might support a more accurate assessment of underserved SMEs’ creditworthiness. However, it should be noted that the Treasury already has the ability in Section 4(5) of the Small Business, Enterprise and Employment Act 2015 to specify the SME information that must be shared. We are actively considering updates to the scope of data in the next phase of the CCDS reforms. However, it will not be expanded in line with this amendment, given that it would require redesigning the scheme entirely, expanding it beyond financial services participants, some of whom see little return for their participation, which already imposes a degree of burden. I do not think it appropriate for financial services legislation to impose regulatory obligations on non-financial market actors in this way, not least without consultation. That is not to say the ambition is misplaced. Indeed, these issues are potentially better addressed through the future development of open finance and smart data initiatives.
Amendment 169 seeks to require a review of know-your-customer requirements. I understand the concern that the current framework may not always operate as it should in supporting access to financial services. As the noble Lord, Lord Holmes, rightly stated, technology is already playing a part but can do better. Indeed, businesses such as Quantexa and Onfido are leading the way in this space. The Government do not believe that anti-money laundering requirements and financial inclusion are mutually exclusive. The money laundering regulations already provide firms with the flexibility to take a proportionate and risk-based approach to customer due diligence. As part of the financial inclusion strategy, major high-street banks have launched pilots on improving access to bank accounts, demonstrating how financial inclusion initiatives can operate within the existing framework.
Reforms to make customer due diligence requirements more proportionate and effective have already been made, including through amendments to the money laundering regulations made via statutory instrument earlier this month. The Government are also taking steps to support the effective use of new technologies, such as through the publication in February of guidance on the use of digital identities to support customer verification. Finally, the money laundering regulations also mandate a review of their regulatory provisions every five years to assess whether they are effective, appropriate and proportionate. The next such review will be published in 2027.
The noble Lord, Lord Holmes, asked how financial inclusion has changed under the current Government. In November, we published the Financial Inclusion Strategy, which supports access to banking for those with no fixed abode and small-sum lending to help people access credit and makes it easier for people to save. The noble Baroness, Lady Tyler of Enfield, noted that when a House of Lords Select Committee looked at this topic, it found that 1.7 million people were unbanked. Although it is still too high, I can report that the latest survey data shows that the number of unbanked people has fallen to under one million. As I already set out, with many of the actions we are taking, the Government hope to reduce this further. Financial inclusion is not a gap in the framework. It is an agenda already being delivered by the Government, with the FCA closely engaged in its implementation. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Tyler of Enfield (LD)
My Lords, I thank the Minister for his response and all noble Lords who have spoken on this group of amendments. The debate has been very thoughtful, and I very much appreciated the collaborative tone of the contributions. I thank the Minister very much for agreeing to meet me and other interested Peers, and I very much look forward to that happening before Report. I was also grateful to the Minister for emphasising the point that the consumer duty cannot be the be-all and end-all. As my noble friend Lady Kramer very clearly put it, it is not a duty of care.
Baroness Scott of Needham Market (LD)
I remind the Committee that when a group is led by a clause stand part debate, after the noble Baroness, Lady Bowles, has spoken, there is no second intervention from me at that point.
Baroness Bowles of Berkhamsted (LD)
My Lords, oppose Clause 17 standing part of the Bill. Before turning to the detail, I will explain how Clauses 16, 17 and 18 fit together. They are not independent clauses. They operate as a single, interlocking structural package—an unholy trinity. Clause 16, which we have already debated, starts the move of day-to-day statutory principles out of operational decision-making and into a five-year strategy document. Clause 17 is the moment where it cuts. It removes the operational duty to apply the principles and the duty to explain how they have been applied. The principles remain in the abstract, but the visibility of their application disappears. Clause 18 then seals the trio by removing the remaining statutory mechanisms through which Parliament once saw how those principles were applied.
I said in Committee last week that deregulation of regulators inherently increases the regulation of markets. A regulator’s default setting is caution, not proportionality. That is precisely why Nikhil Rathi asked Parliament for political cover to take on more risk, because he knows that the system will not shift itself.
However, removing the operational “have regards” does not reduce that institutional caution. It simply removes the focus that keeps it directed at the right things. It removes accountability and removes Parliament from the role or possibility of providing support or cover with its eyes open, a direction of travel that Clause 18 then completes. The result is that Parliament loses operational visibility at the very moment when regulators are being asked to take on more risk. This is the context in which Clause 17 must be understood.
By deleting the principles from their operational position, the Government remove the statutory reporting loop. That deletes the audit trail that allows us to test what the regulators have done and why. Crucially, it also removes the only lever of accountability we have. We do not possess direction powers or hold budgetary levers. We do not have judicial review that bites on the substance of expert rules. All Parliament has is the ability to see, to question and, ultimately, to embarrass. An embarrassment card is a fragile card, but it is the final line of democratic accountability in the UK’s financial regulatory system. Clause 17 strips even that card from our hands. This is not simplification. It is a cultural turnabout that systematically switches off operational accountability.
Parliament is not trying to run the regulators. Our role is that of a critical friend: the only body that can speak openly what industry dares not, and test whether the principles that Parliament set are being applied in practice. Under the current framework, regulators must have regard to statutory principles in consultations, rules and supervision. Have they done this perfectly? No. They adopted a tick-box matrix that has become tedious and uninformative, but nothing prevents them shifting to thematic reporting, highlighting where specific principles matter most. Where the system has fallen down most is on the supervisory side, with an explosion of excess communications, overbearing information requests and a proliferation of Section 166 investigations.
Explanations around the “have regards” are the audit trail of how Parliament understands how a regulator weighed proportionality, firm size and sustainability of growth, or where climate change held relevance. A thoughtful narrative is far more informative than a boilerplate matrix, yet Clause 17 removes all requirements to explain or to show the rationale. In its place, the principles are relocated to a five-year strategy document that cannot be specific or enforced by the courts, and cannot be used to test an individual rule or a heavy-handed supervisory decision. This is not simplification; it is opacity. I pose the question: is the role of Parliament wanted?
At the Treasury Committee on 24 March 2026, the FCA’s CEO, Mr Nikhil Rathi, was asked how the system would handle the blistering speed of financial innovation. His answer was striking. He said:
“That is why I asked for a risk appetite from the Government and Ministers and Parliament so that we all know … what guardrails we are operating within, with appropriate democratic input and oversight”.
He also told the committee during the Sexism in the City inquiry that if the FCA were to set thresholds below that which Parliament had established in employment law, it would need a degree of political cover and agreement through Parliament. This is two sides of the same coin. The FCA is actively asking Parliament for guardrails, oversight, democratic accountability and cover because it is being pushed to accept more risk, and with more risk comes more failure or challenge.
However, Parliament cannot share responsibility if we are blinded from seeing how the principles are applied, and we cannot endorse greater risk-taking if we are denied information on where those choices bite in practice. When scandals happen, what angers Parliament most is when the writing was on the wall for a long time. Woodford funds is a textbook example, and London Capital and Finance is another.
The Minister may point to strategies, outcomes reporting, cost-benefit panels and annual reports, but the FCA itself has conceded that these are visibility tools, not accountability tools. Reports describe outcomes after the event, long after the harm has occurred. A strategy document can say all the right, glossy things, while the actual rules produce disastrous outcomes. We have seen before how FCA high-level assurance, even on specific cases, can look immaculate, while operational reality goes badly wrong. We saw that with British Steel pensions, with motor finance and with Woodford. Clause 17 remains the only operational hook that Parliament has to test whether the principles guided the procedure.
Last week, the Minister indicated that perhaps proportionality would be restored. If so, that is welcome, but a verbal concession is not an amendment and patching one leak does not fix a broken hull. If proportionality cannot be functional in a five-year strategy document, how can other principles survive, exiled there? Clause 17 still deletes the operational requirement that regulators must consider the desirability of sustainable growth. Removing this is nonsensical. The Government cannot possibly want unsustainable growth—growth that does not last.
Let us not forget the legal hierarchy. The secondary objective of competitiveness and growth sits higher up the statutory ladder. Precisely because that objective sits higher, there is all the more need to keep the sustainable growth consideration anchored in the operational functions. Right now, we see a political dash to deploy capital productively. If we encourage a reckless sprint when the underlying assets are not yet created, we are building not prosperity but a bubble, creating systemic fragility. So, restoring proportionality but deleting sustainable growth from sight collapses the government logic. It says that an audit trail for a firm’s compliance cost matters but an audit trail for long-term stability of the economy does not.
The consultation spoke about rationalising the number of “have regards”. It did not propose removing them from rule-making. It did not propose isolating them in a five-year strategy. It did not propose weakening the basis on which the courts can test whether regulators have properly considered Parliament’s intent. It did not analyse the interaction with the secondary competitiveness objective. When the Government consult on one minor administrative tweak but legislate for a far-reaching structural overhaul, that raises serious questions of fairness and due process.
I can see what the Government thought they were doing here. They believed that, by removing the operational “have regards”, they would free the regulators from excessive caution and allow the system to move more quickly. But, in practice, this clause disturbs the balance in a way that the Government have not accounted for. It removes not the caution but the focus and visibility that allow Parliament to understand how risk is being taken, to understand where it is being borne and to play its part in the structural balance of the system, which includes giving cover to the regulators when appropriate. That is the constitutional gap at the heart of this clause and why it represents not a simplification but a weakening of the framework of accountability on which our financial regulatory system depends.
This clause, along with Clause 18, has a serious impact on parliamentary scrutiny, as has been raised by the noble Baroness, Lady Noakes—so I will not go further into that. But these things collectively are why I oppose that Clause 17 stands part.
Lord Vaux of Harrowden (CB)
My Lords, I have added my name to the Clause 17 stand part notice. As has been explained so clearly, the Government’s intention appears to be to put most of the consideration of the regulatory principles and “have regards” into the five-year strategy created by Clause 16. They believe that, having done that and thereby provided long-term clarity as to how those principles and “have regards” will be met at a strategic level, it is no longer necessary to apply them to the nitty-gritty of individual rule-making, which is why Clause 17 effectively removes them from that process. Rightly, the Government consider the secondary competitiveness and growth objective to be extremely important, so they have singled that one out for special treatment in Clause 20, and it alone must be reported on annually. That, at least, is to be welcomed but does have the somewhat odd effect of making the secondary objective more important than even the primary objectives, or any other principles which are not subject to specific reporting.
As we have heard, there are very real problems with this overall approach in terms of the impact on the ability of Parliament to scrutinise the activities of the regulators, including the committees that have been established for that purpose. As the Minister is aware, the Financial Services Regulation Committee of this House, of which I and a number of others in this Grand Committee are members, has taken the unusual step of writing to the Minister to set out our unanimous concerns in that respect. I very much look forward to the meeting that he will attend next week on that.
In passing, just before we started today, we received a letter and a Treasury note from the Minister. Point 15 in the Treasury note would slightly bring together the strategy and the Clause 17 elements, in that it says:
“The Bill will require the regulators in their annual reports to update on the extent to which, in their opinion, they have implemented their long-term strategy”.
I spent a fair bit of time since I received that trying to find where the Bill actually says that. I may be being very dim, but I cannot find it, so perhaps the Minister could point out specifically where that is. I may well have missed it, and I apologise if I have.
I also spent part of the weekend reminding myself of what the FCA’s existing 2025-30 strategy document looks like. I lead a very exciting life, as you can see. While “vacuous” might be too strong a description, it is a classic of its type, being full of motherhood and apple pie generalities and lots of attractive diagrams and pictures, but very little of real specificity or genuine measurability. Statements such as
“We will be a smarter regulator; predictable, purposeful and proportionate”,
sound great, but is this really something that could be meaningfully scrutinised? When I compare the rules in Clause 16 with what is actually in the current strategy, it appears to me that the current strategy would actually comply with Clause 16.
During the previous day in Committee, the Minister said, in reply to a question from the noble Baroness, Lady Noakes, about the existing strategy and whether it is the model on which Clause 16 is based:
“this is the starting point. There is definitely work to do and it needs to be improved”.—[Official Report, 24/6/26; col. GC 337.]
I cannot see how Clause 16 would improve it— I think it already complies—so I have no argument with the FCA having to have a longer-term strategy, but Clause 16 does not provide a sufficient basis on its own for parliamentary scrutiny and accountability, and that is where Clause 17 becomes such a problem. Clause 17 removes the need for the regulators to have regard to the regulatory principles and other “have regards” when going about its general duties, so apart from the annual report on competitiveness and growth in Clause 20 that I mentioned earlier, the only time the regulators will have to consider the regulatory principles—including, but not only, the critical issue of proportionality—will be in its five-year strategy. This would remove the need for regulators to explain how the regulatory principles apply to any draft regulations, at a time when they should be explaining not only the application to individual regulations but the cumulative impact of those regulations.
We debated last week how there is scope for an overhaul of the regulatory principles and other “have regards”, which have a tendency to proliferate. Perhaps that is where the Bill ought to be concentrating its efforts. Clause 17 represents a considerable downgrade on the ability of Parliament and indeed the Treasury to hold the regulators to account. Even as the Bill delegates ever-increasing activities to those regulators, this is a move in the wrong direction. So, by all means let us have a long-term strategy, but that does not substitute for the need for the regulators to have regard to the principles and other “have regards” when setting regulations, and to explain how they have been met. Clause 17 should be removed from the Bill.
Lord Eatwell (Lab)
My Lords, I want to follow on from the noble Lord, Lord Vaux, who commented that the committee was unanimous in its letter to the Minister. It was indeed: Conservative, Liberal Democrat, Labour and Cross-Bench Members were unanimous in rejecting Clause 17. The reason is that Clause 17 embodies the requirement to remove the principles from consideration by the committee. But those principles are the essential toolkit of the committee. This actually neuters the committee and leaves it just examining five-year strategies and annual reports, and without the ability to deal with specific proposals, which is the reason why the committee was established in the first place. By removing that ability, the Bill also weakens the regulators.
I am sure there are regulators in some office who thought that that was a neat way of getting rid of a very awkward committee. But it weakens, because, as the noble Baroness, Lady Bowles, pointed out, of the need for political cover—the need for a relationship between the political decisions and regulatory decisions. At the moment there exists this “proposal, accountability, critique” relationship between the regulators and the Financial Services Regulation Committee of your Lordships’ House. Remove that and the regulators are exposed to significant issues in a way they would not have been before.
I cannot see how in any way this measure improves a regulatory system that was built on the principles relationship established in FSMA at the beginning. It became particularly important once we left the European Union and the responsibility to examine the regulatory structure shifted from the European Parliament to this Parliament; and now, Clause 17 is taking away parliamentary accountability in any serious operational sense. It really should not stand part of the Bill.
Lord Bridges of Headley (Con)
My Lords, I will speak very briefly on this. I declare my interests as employee adviser to Banco Santander in Madrid and a shareholder in Santander. I also apologise to noble Lords, as I was unable to speak at Second Reading.
I will follow on from the noble Lord, Lord Eatwell. I think he and I may disagree on certain aspects of the regulatory and supervisory approach, but I fundamentally agree with every single syllable he has just said. I am very queasy about aspects of the Bill. Many of us spent some time in this Room several years ago trying to ensure that we can hold to account in Parliament, both in this House and the other place, the regulators and supervisors, who hold immense power. That was absolutely right. We put in place a number of measures, including the establishment of the new committee, so ably chaired by my noble friend Lady Noakes, to enable us to do that—just one measure. This clause goes very much in the wrong direction.
I read the letter, for which I am very grateful, from the noble Lord, Lord Stockwood, and I have to say that I am somewhat perplexed by it. My wife says that I have a very little brain, so I very much look forward to the noble Lord telling me that I am wrong—I am very used to it. Let me try to understand what it is saying.
It starts by saying—or, rather, several paragraphs in it says:
“Considering separate rules in isolation is not effective for assessing the cumulative effect of the regulators’ actions—both the benefits in terms of advancing their objectives, and the costs to affected businesses”.
It goes on to say, as noble Lords will no doubt have read, that the publication of the overall long-term strategy will somehow address this. It also says:
“Clause 16 is intended to address this feedback”
from the sector—I am not sure from whom—
“and improve transparency around the regulators’ long-term direction and focus”.
I am very happy to have a long-term strategy but we absolutely need to be able to call to account actions that the regulators take, case by case.
I have read the Explanatory Notes, which say that the long-term strategy will be once every five years. I see that as entirely insufficient. Furthermore, in paragraph 170, the Explanatory Notes go on to say:
“The Government expects that the strategies will be high level and focus on the FCA’s and PRA’s top priorities and the outcomes they aim to achieve over that time”.
I do not see this as anything like the accountability that we were looking for when we introduced the measures in the last Bill, now an Act, and in the new committee. As far as I can see, it is not the case that the Government dispute the need for this case-by-case analysis, for they say this three paragraphs down in the same letter that I quoted earlier:
“There appears to be broad agreement that, in some areas, regulatory requirements on firms have become overly prescriptive, in some cases duplicative, and that this results in high costs for firms, and means that they spend a large proportion of their time and resources focusing on regulatory requirements”.
I agree wholeheartedly. We need, therefore, to address these points case by case.
All these points tie up. We cannot see the regulatory oversight of this House and the other House diluted in the ways that these clauses do when you put them together. I therefore agree entirely with the noble Lord and those who back these two amendments. I will later press for other measures to tighten, not weaken, regulatory accountability.
Baroness Noakes (Con)
My Lords, I will be brief because much of what needs to be said on this topic has already been said. I will not detain the Committee for long but, as I have added my name to the clause stand part notice, I thought that it was worth me reiterating my strong opposition to Clause 17.
Picking up on what the noble Lord, Lord Eatwell, spoke about, in our debate on the first group, the Minister reiterated that the Government think that the FSMA model is the correct model. I do not think that any of us is seriously disputing that as a broad proposition. What we are focusing on is the detail of how the FSMA model can continue to work. When we left the EU, the huge amount of EU law that became assimilated law changed the name of the game around how financial services regulation is lived out in this country.
As we have heard, the 2023 Act tried to deal with that in part by increasing parliamentary accountability through the committees of each House, including the requirement for individual rules proposed by the PRA or the FCA to be accompanied by explanations of how the regulatory principles had been applied. I do not think that any of us clearly understood the scale of the problem back in 2022, when we were considering the Bill, but we thought that these were sensible moves in the right direction. The only thing that has changed is that, now, the Government are coming along and putting even more into the FCA by way of the consumer credit legislation, which is a good idea.
But this has seriously undermined what was still work in progress on how effective parliamentary accountability could be worked. There were never any discussions with either committee of the Houses of Parliament about how the arrangements for accountability following the 2023 Act worked. We suddenly got this decision by the Government to cut away the legs of the committee through its inability to engage with the individual regulations. It is clearly the case that looking at a five-year strategy will never replace the work that needs to be done at a granular level on some of the proposed regulations that come from the regulators. That is the time for interventions—not by looking back at whether actions have complied with a strategy.
We should use this Bill to refine the FSMA model, to make it workable for the scale of the task that is being given by Parliament to the regulators and to make sure that the strength of the accountability mechanisms matches the scale of that activity. That is all that we are trying to do. The direction of this Bill is the wrong direction.
Baroness Donaghy (Lab)
My Lords, I am tempted to say, “What she said” and sit down, but I want to emphasise the unanimity of the Committee on this crucial issue. Some of us think that the FCA has too much to do anyway. Some of us—probably fewer—think that successive Governments have used the regulators as a heat shield and that perhaps the balance has gone the wrong way.
Not to repeat the examples that have been given, the noble Baroness, Lady Kramer, mentioned the five-year strategic plan of the FCA. For some of us it was a glossy PR exercise. Examples have been given, naming and shaming. It took at least two meetings and several bits of correspondence before the FCA even hinted that it might have done it slightly differently had it given some consideration to what it did. In that case, you might argue that it was about a deregulatory issue, trying to hold companies to account. Our committee thought that it had gone too far.
One final example is the issue of cost-benefit analysis, which the Minister used on the first day in Committee. We tried very hard to pin down how the FCA conducted cost-benefit analysis and what was happening to the panels. We heard that they were work in progress. Had the panels met? No, they had not met. What approach did the organisation have to analysing cost-benefit analysis? I am sorry that the noble Lord, Lord Sharkey, is not here as he is the expert on the granularity of analysing cost-benefit analysis. It was a poor show. I am sure that it is working to improve, as it is improving in a number of other areas, but it is extremely important that the work of Parliament should not be inhibited by an attempt to tidy up regulation—which is in fact setting aside protections.
The Minister, on the first day in Committee, used the phrase “modernise protections”. I am sure that he meant to say, “Modernise the transparency, modernise the complexity and modernise the general approach so that people can understand them”. I hope that he did not mean “modernise protections” in the sense of setting them to one side.
Lord Davies of Brixton (Lab)
What she just said.
As the final representative of the committee in this Committee, I agree with what the other members of the Financial Services Regulation Committee have said. It is important. I remember sitting across the Room some years ago when the idea was being discussed. It is worth recalling that the original idea was, I think, a Joint Committee of both Houses but, for whatever reason, the Commons decided that it did not want to adopt that approach. I think there are rules about criticising what the other House does, but there is no doubt that the only effective manifestation of the belief that this sort of work is required has been the work of that committee. It is particularly important that we do not lose something that we achieved through cross-party agreement.
Baroness Bi (Lab)
My Lords, I declare an interest as chair of Norton Rose Fulbright. Some of my firm’s clients are regulated by the FCA and the PRA. I am not a member of the Financial Services Regulation Committee, which is why I am probably breaking what I have heard as unanimity by speaking in favour of Clause 17 remaining part of the Bill.
I note that the current accountability framework, including the role of the committee, was created only three years ago, pursuant to the Financial Services and Markets Act 2023 following Brexit. Before that, we have to remember that we were content with what was probably pretty limited oversight by the European Parliament, so hearing about the importance of very detailed parliamentary oversight when it comes to looking at every proposal that the regulators might have is a relatively new innovation for us.
I do not think it unreasonable for the Government now to consider how well that post-Brexit system has been working and to propose changes to a regime that the committee itself has criticised as overly complex and difficult to navigate. I note that the noble Baroness, Lady Noakes, commented at Second Reading how difficult it had been to hold the regulators to account under the current system. I am therefore curious about why noble Lords are keen to preserve a status quo that is far from ideal.
There has been significant opposition to Clause 17 and concern about the effect it could have on parliamentary oversight, but I am not convinced that that reaction is warranted. I do not think Clause 17 is a retreat from scrutiny, but it is looking to make it more targeted and effective by merely removing the obligation on the regulators to consider every step they take by reference to the eight FSMA regulatory principles for every day-to-day function. The obligation to notify all those processes to the parliamentary committee does not always lead to the kind of analysis or response and targeted feedback that we have been discussing. That volume of information that the regulators are producing has not led to a better system.
The result is that that documentation requirement has become a burdensome compliance exercise and not truly analytical. The Government’s consultation confirmed that the information produced is too granular to support effectively an overall assessment of regulatory performance, and nearly three-quarters of those who responded to that consultation were supportive of or broadly sympathetic to the approach the Government are proposing, and these are the customers, the regulated body, of the people that the FCA and the PRA are supposed to protect.
We should also acknowledge that Clause 17 does not abolish the Section 3B regulatory principles. The FCA and the PRA will continue to be bound to have regard to those principles when they are preparing or revising their five-year strategy plans, for which they will be held accountable not just by the parliamentary committee but by society as a whole. Those strategies will be subject to consultation and will create a public benchmark against which the regulators’ subsequent rule-making can be assessed and progress against the stated strategy can be monitored, in their annual reports if nothing else. I am not referring just to the glossy brochure that we have heard about.
It is also important to note that Clause 17 does not alter the requirement for the regulators to consider and document to the committee how they are pursuing their statutory objectives. In the case of the FCA, so much of the focus is on the competitiveness and growth objectives. That gives the committee a powerful accountability tool. There is nothing to stop the committee calling them in whenever it likes to talk to them about how they are meeting those objectives in line with the principles.
The requirement of the regulators to present their analysis to the committee on each of the eight regulatory principles in relation to each consultation is disproportionate. Its removal does not reflect a material dilution of the regulators’ obligations because the substantive matters of concern continue to bind the regulators in any event. Is it necessary for the committee to be involved in all the detailed work that the regulators need to do in order to exercise proper parliamentary oversight in what we all accept is a fast-changing financial services market in a post-Brexit regulatory environment where the FCA and the PRA now bear responsibility for significantly more rules than was contemplated when Section 3B of the original FSMA 2000 was drafted?
As a common law legal system, it is right that the Government ask the regulators to comply with broad principles and hold them accountable for the outcome without requiring parliamentary oversight of all operational steps and without expecting the regulators actively to consider and document their analysis of how they have complied with each principle every time they exercise their general functions, however routine they are. I know that there is a discussion about the system being modified and improved through this Bill, but that is not what we have at the moment.
The committee’s mandate is to scrutinise whether the UK’s regulatory framework and regulators operate effectively. That requires the committee to have access to meaningful information and a coherent standard against which to test the regulators’ conduct. The long-term strategy provides that broad standard, and the committee will still receive consultations and examine how individual proposals advance the strategy that the regulator has publicly committed to. Its constitutional role could therefore be strengthened rather than rendered ineffective. Clause 17 keeps the Financial Services Regulation Committee’s oversight where it should be: on the substance of regulatory performance, the delivery of publicly stated strategies and the real-world impact of regulation. It also frees the regulators from unnecessary procedural burden, so that they can focus on regulating well. The mechanism does not have to be the same as before, and keeping Clause 17 could materially improve it.
Baroness Kramer (LD)
My Lords, I did not intend to speak in this debate because the case has been put so well. However, having heard the noble Baroness, Lady Bi, I want to join the conversation because I think she has a very different perception of the role of Parliament from that of many others here. We have a responsibility as Parliament collectively—we are not the elected House but the appointed House—directly to the people of this country. The regulators are servants of that responsibility, not masters of it.
What the noble Baroness described is the ability for Parliament to intervene only at the very highest level in a very limited way and to pass huge authority over the financial sector, our financial stability and the economy to the regulators and then walk away. If we were to do that, we would be absenting ourselves from the very requirements that are at the core of a parliamentary system. She dismissed the pretty five-year strategy plan that we have from the FCA for 2025 to 2030, but it is exactly what is envisaged in this legislation: fairly high-level, simplistic comments of the kind that were probably developed by the public relations department.
The committee we put in place in 2023 was put in place not at the proposal of the Government or the regulators but by a Parliament utterly frustrated in not being able to carry out the responsibilities that it has as a Parliament. I have to say that the Labour Party was in a completely different place in 2023—it has now switched; I do not know why it has made such a volte-face. The Government of the day, the regulators and the financial sector were determined to narrow the capacity to scrutinise, to have a parliamentary view and to allow this Parliament to live up to its responsibilities. If we cannot have an expert committee able to look in detail at factors that so fundamentally affect the economy and well-being of the UK, we are, frankly, derelict in our duties. That is why this is a huge constitutional issue. If we were to repeat this in the area—
Baroness Bi (Lab)
I am not sure that we disagree very much on what the purpose of Parliament is and its relationship with the people of Britain, but the FCA asked for a risk metric from Parliament and did not get one. I have heard a lot about the obligations to the people but, if Parliament is so crucial to what the regulators need to do, why was no guidance given to the regulators about the extent of risk they should take in their operations?
Baroness Kramer (LD)
I am not on the committee, so I cannot answer that particular question—I am sure others would be able to consider this issue. However, if the noble Baroness thinks that, because Parliament did not, in her words, provide political cover for activity that the regulators wanted to carry out, Parliament should then be removed so that the regulators would somehow be exposed, who would they be exposed to? They would not be exposed to a committee. The public does not have the ability. I do not see the regulators going around the country talking to ordinary people in regular communities about what they are doing; they do not engage at that level. Many APPGs in this House have asked the regulators to come and talk to them. They are nearly always refused or somebody junior is sent, so it is only through a limited committee structure that this Parliament has been able to hold the regulators to account at all.
I give huge credit to the committee that sits under the chairmanship of the noble Baroness, Lady Noakes, which was created against the resistance of the regulators and the Government. This, now, is their attempt to try to unravel what is turning out to be a very effective committee that is raising really important issues, creating a requirement for proper answers and initiating real investigation. That is what lies at the heart of this: an attempt to negate the effectiveness of a committee that has been making its mark, and which leaves the regulator feeling uncomfortable because it has to answer questions.
Baroness Noakes (Con)
I shall make a brief comment on why Parliament has not offered any guidance on risk metric. The committee was well aware that the FCA sought to get clarity about the risk appetite that it was taking. The PRA had not made that request; it regards it as its responsibility to judge the balance of risk. There is no unanimity in the regulator community on this, but we reported the issues as we found them in one of our reports.
The noble Baroness asks why Parliament has not given its answer. The straightforward answer is that the Government have not brought forward anything. Parliament gives an answer only when it approves something that the Government bring forward. When we asked the Financial Secretary to the Treasury whether she intended to operationalise the giving of a more specific risk appetite to the FCA, she said pretty clearly that she thought that the Government would not do that.
If the Government do not bring forward something for Parliament to approve, it is not going to happen. Parliament does not act in the way that the noble Baroness seemed to think that we would act, which is that a committee would somehow produce an answer on risk appetite. The committee can comment on the issue of risk appetite and has done so, but it is fundamentally for the Government to take any action that is to change the way in which the risk appetite is specified for any regulator.
Baroness Neville-Rolfe (Con)
My Lords, this is an important clause, and I understand why noble Lords wish to probe the Government’s approach to Clause 17. It is always right that we scrutinise carefully any change to the statutory framework governing our financial regulators, and the sponsors have set out their case well. I note that they were introduced into the 2023 Act for good reason: to try to ensure that financial regulation in the UK is proportionate, accountable, flexible and aligned with economic and market objectives.
As I said earlier, I am glad that a meeting with the Financial Services Regulation Committee will take place next week. Certainly, I would like to get to the bottom of whether the change neuters the committee, as has been suggested by the noble Lord, Lord Eatwell, and my noble friend Lady Noakes; indeed, I think that committee was unanimous that there was a problem. I thought it was interesting that my noble friend Lord Bridges echoed concerns that key, case-by-case analysis by the committee would disappear, and that the noble Baroness, Lady Donaghy, expressed concern about the way that her questions about cost-benefit analysis had been answered, presumably under the existing system.
These are all very legitimate questions, but there are other considerations—the noble Baroness, Lady Bi, touched on some of them. Our position is that we do not want to perpetuate overburdensome regulation. In discussions with industry, we have heard repeatedly that the regulatory principles in Section 3B of the 2000 Act can themselves lead to tick-box exercises. That is particularly true where the principles require regulators to consider wider public policy objectives, which may have only a very indirect connection with the firms being regulated or the activities in question. For example, Section 3B(1)(c) includes
“the need to contribute towards achieving compliance by the Secretary of State with section 1 of the Climate Change Act”—
the net-zero target—
“and … the Environment Act 2021 (environmental targets) where each regulator considers the exercise of its functions to be relevant to the making of such a contribution”.
My own experience of serving on a challenger bank’s board is that there is already a lot of climate-related activity required by the regulators that creeps into many aspects of governance. It is generally costly and sometimes of little worth. That was before the regulatory principles were added. That reflects, harking back to our earlier conversation, the extensive net-zero regulations that exist, the remit letters and the sustainability reporting network, all of which were cited earlier. Therefore, the real question is whether financial regulation is the right vehicle through which to pursue such goals and whether embedding such considerations produces better regulation or simply more process, as we suspect.
The Bill is meant to be deregulatory, and it is meant to simplify the regulatory environment and to support growth and competitiveness. I think the Government may be genuinely reducing a burden that has been identified by industry. We should be careful before assuming that every principle must remain in place. For me, the real tests are about what improvements are coming about here. I am interested in the detail. Does it make the FCA or the PRA more effective? Does it protect consumers? Does it support financial stability? Does it help growth? Alternatively, does it simply create another layer of process, the cost of which falls on firms?
I would be grateful if the Minister could explain more clearly the Government’s rationale for Clause 17. What burdens have been identified and what will the impact be of the changes proposed here? What evidence have the Government received from industry and regulators about the operation of the current Section 3B principles? How will the Government ensure that removing or amending such principles reduces unnecessary burdens, without weakening the core protections that consumers and markets expect?
As the Official Opposition, we are, in essence, in listening mode on this quite radical proposal. We would like to understand whether the “whereases” that are being partially abolished are a burden on only the regulators or whether that feeds through to industry and consumer protection—and, if so, how. I believe that, sometimes, a clearer, simpler and more focused framework is more effective. If Clause 17 helps move us in that direction, it may be needed in the Bill, as the noble Baroness, Lady Bi, suggested. However, it also seems very important to work out how the two parliamentary committees will exercise proper oversight going forward in a post-Brexit regulatory environment, and to ensure that any regulatory resistance, which we have been hearing about this evening, is minimised.
Lord Stockwood (Lab)
My Lords, it is clear that the Committee places a strong emphasis on getting the regulatory principles right. The Government also take this matter very seriously and genuinely value the contributions made in this debate.
Before I start, it is important to remember that the regulators have both principles and objectives. The regulators need to advance these objectives—regulatory principles are something that they consider only when doing so—and the Bill does not change that. The noble Lord, Lord Vaux, asked me whether the regulators will be required to report on the long-term strategy. Clause 16(6) amends Schedule 1ZA to FSMA so that the FCA must explain, in its annual report, the extent to which it has implemented its long-term strategy. Clause 16(7) does the same for the PRA.
The Government agree that the regulatory principles are an important part of the statutory framework. They are also aware that each of these principles has strong support, so, while there may be a view that some could be removed, there is no consensus on which ones it would be suitable to remove. This is why, when the Government reviewed the principles, they concluded that none of the individual principles should be removed from legislation. Instead, the Government concluded that the regulatory principles must continue to play a significant part and a central role in the work of the regulators through new long-term strategies. The regulators will be required to have regard to those principles when preparing or revising their strategies, ensuring that they are applied in a more coherent and visible way at the strategic level and in a manner that supports an overall assessment of the regulators’ performance and actions.
In our debates on other clauses, there has been a widely shared view that, in some areas, regulatory requirements on firms have become overly prescriptive and, in some cases, duplicative. The Government consider that, in some areas, this is also true of the regulators, and that, over time, various requirements have been added to and extended. This places the resourcing burden on the regulators, which is ultimately paid for by firms and can reduce their capacity to act quickly and effectively.
That is why the Government consider it appropriate to change the way in which the regulatory principles in FSMA are applied to the regulators. The Government consider that this new approach will support more meaningful scrutiny of the regulators’ strategy, as opposed to repetitive and fragmented processes across the individual exercising of their functions. As I explained earlier, it would mean that, for example, rather than considering whether an individual proposal is proportionate, the regulators will be required to set out clearly how they have considered whether their strategies and work plans as a whole will result in a proportionate burden on firms.
Let me be clear: the regulatory principles will remain central to the regulators’ work under the new framework. Parliament will continue to have the full range of statutory and constitutional levers through which it can hold the regulators to account, including scrutiny by parliamentary committees and review of the regulators’ publications, such as their annual reports, on how they have advanced their statutory objectives and their annual responses to the Treasury’s letters of recommendation on economic policy—both of which the Treasury is required to lay before Parliament. The requirements for the regulators to consult on proposed rules and demonstrate how they have advanced their objectives will remain. If the rules on which the regulators are consulting will impose costs, their cost-benefit analysis must also be published. The regulators must also notify the chairs of parliamentary committees when they issue consultations. This requirement is also unchanged. If a parliamentary committee writes to a regulator concerning a publication, the regulator must respond to that committee in writing. The Government consider that these are the most effective ways of holding the regulators to account.
The accountability of financial services regulators is a significant matter for this Committee—I have heard that loud and clear. The regulatory principles are important for shaping the work of the regulators, and I recognise the strength of feeling on how they operate. However, the way in which they currently operate can reduce the regulators’ agility while doing little to support effective overall scrutiny or to materially benefit firms. Reforming how the regulatory principles work will ensure that these principles continue to be central to the work of the regulators and will support enhanced scrutiny of their overall performance. I therefore move that Clause 17 should stand part of the Bill.
“Treasury statement of concern(1) Where the Treasury considers that rules or guidance made by the Financial Conduct Authority or the Prudential Regulation Authority are inconsistent with primary legislation or statutory objectives, the Treasury may publish a statement of concern.(2) Where a statement of concern is published under subsection (1), the Financial Conduct Authority or the Prudential Regulation Authority must, within 60 days, publish a response explaining—(a) whether it agrees with the concern, and(b) what action it proposes to take.(3) The Treasury must lay before Parliament any statement of concern published under this section, together with any response received from the Financial Conduct Authority or the Prudential Regulation Authority.”Member’s explanatory statement
This new Clause would enable the Treasury to publish a statement of concern where regulator rules or guidance appear inconsistent with primary legislation or statutory objectives, requiring a published response and Parliamentary transparency.
Baroness Bowles of Berkhamsted (LD)
In a way, it is a pity that I tabled this amendment, because it would probably be a whole lot more informative for us to go straight on to Clause 18. However, Amendment 88 would introduce a new mechanism that was suggested to me: a formal Treasury statement of concern. The idea is that it would fill a gap that has always existed—one that becomes all the more glaring alongside the opacity created by the Bill.
The FSMA 2000 settlement imagined a world in which Ministers were hands off and regulators were left to get on with it. That world has long gone. The Government are now highly interventionist in the name of growth. More generally, they signal priorities, express expectations and raise concerns, but almost all of that happens privately or through speeches and press releases that are approximate and not subject to parliamentary scrutiny.
My amendment would formally put the record straight. If the Treasury considers that
“rules or guidance … are inconsistent with primary legislation or statutory objectives, the Treasury may publish a statement of concern”
and the regulators must respond publicly within 60 days. That is all. It is not a direction, and it is not interference; it is a constitutional signalling mechanism. It would simply show that the Government have taken action on a concern, which otherwise might be unknown. The Government may say that they do not wish for such a mechanism—they do not have to use it—but legislation is not written for the preferences of a particular Minister at a particular moment in time; it is written for the system. The truth is that the Government already intervene with regulators, only informally, privately and without transparency. Why not have a formal system as part of escalation or as a pre-legislative tool?
There is also a practical point. Parliamentary time is limited, and correcting regulatory inconsistencies through statutory instruments can take months, if it happens at all. A statement of concern is a stage earlier. It would allow the Treasury to flag a potential inconsistency without immediately reaching for legislation. It would also allow the regulators to respond and, where appropriate, adjust course. It could also help resolve issues that arise when different things are said or interpreted differently in different places.
In that sense, this mechanism’s greatest strength may lie in its quiet deterrent effect: it would rarely need to be used because its existence would encourage early correction and avoid the need for statutory intervention later. A statement of concern provides exactly that. It would allow the elected arm of government to say transparently, on the record, “We see a potential inconsistency. We are not directing you, but we expect a reasoned response, and we think that this needs to be done publicly”. It would also have the benefit to the Government of them showing formally that they have taken a concern forward.
As I say, this was proposed to me, and I think that there is a point to it. There is a missing link. The Treasury often says that it does not interfere, but there has been an awful lot of correspondence and hugger-mugger between regulators and the Treasury recently in order to come forward with the growth strategy. This is a missing link. The power of Parliament has been eroded. I did not recognise a lot of the things that the noble Baroness, Lady Bi, said about how the system works. There is a missing link in terms of what the Treasury is able to do. I beg to move.
Baroness Noakes (Con)
My Lords, I will speak briefly in support of Amendment 88 in the name of the noble Baroness, Lady Bowles. It would be a useful addition to FSMA to have a specific power for the Treasury to issue a statement of concern; I particularly like the fact that it could be used without the full parliamentary process of regulations. As the noble Baroness may recall, when we debated the then Bill in 2023, the Treasury took a power to tell regulators to make rules. However, that power has to be exercised via regulation, so it needs to go through the whole statutory instrument procedure. It has not yet been used, as far as I am aware, but it is a useful backstop that the Treasury has if it wants to direct the work of the regulators, which is a perfectly reasonable thing for it to do in certain important areas.
The existence of the Treasury’s ability to issue a statement of concern would be particularly useful when interested parties were trying to get a point about things that were not working heard by the regulators. The ability to engage the Treasury in that would be very helpful, although I am sure that it would be used more as a background factor in the relationship than as an active part of the Treasury’s relationship with the regulators. I applaud the noble Baroness on her ingenuity in bringing this amendment forward.
Baroness Neville-Rolfe (Con)
My Lords, I am grateful to the noble Baroness, Lady Bowles, for bringing forward these amendments. They raise two very salient points about the accountability of the financial regulators and the mechanisms by which Parliament, the Treasury and the public can scrutinise how those regulators use their powers.
One of the core functions of the Bill is to increase the power and scope of the remit of the regulators, in particular the FCA. Across the Bill, more responsibility is being transferred, more detail is being left to rules and more of the practical operation of the regime will depend on regulatory judgment, rather than primary legislation. My concern is that although the Bill increases the power of the regulators, it does not always provide a corresponding increase in oversight or scrutiny of them; as an ex-Treasury Minister, I am slightly surprised that the Treasury is entirely happy with that.
To me, Amendment 88 seems a sensible and proportionate form of challenge. It would create a formal and transparent way for the Treasury to say that, in effect, a regulator may have gone beyond what Parliament intended or may have acted in a way that is not consistent with its statutory remit. This matters because the Treasury is directly accountable to Parliament in a way that independent regulators are not. If regulators are to exercise substantial powers delegated by Parliament, there must be some meaningful mechanism by which Ministers can challenge, explain and account for how these powers are being used. We will come back to this point again at a later stage in Committee; my noble friend Lord Bridges has tabled an amendment that speaks to this same broad issue.
The underlying point is simple: if regulators are powerful, they must also be accountable. How best to achieve this should be a key objective of our scrutiny in Committee and on Report. I would be grateful, therefore, if the Minister could set out the Government’s position on this wider issue. He wrote to us shortly before Committee—a little too shortly before Committee; I say that politely—but I am not sure whether what he sent us, including the Treasury memorandum, answers our outstanding questions. So do the Government accept that the Bill increases the powers and responsibilities of the FCA and PRA? If so, do they accept that stronger oversight mechanisms are called for? What formal routes currently exist for the Treasury to raise concerns about regulator rules or guidance that may not reflect Parliament’s intention?
Also, what is the Government’s objection, if any, to periodic independent reviews of regulator performance and burden? As a former Minister, I found that, although such requirements were unpopular with the department at the time they were put into law, they proved useful in helping me keep on top of the responsible regulators and their policies.
I very much hope that the Minister will engage constructively with the problem, answer my questions, on both the previous group and this group, and appraise in a constructive spirit the amendment tabled by the noble Baroness, Lady Bowles. Above all, we need reassurance that the Government recognise the importance of scrutiny, transparency and trust in the regulatory system.
Lord Stockwood (Lab)
My Lords, the accountability of our financial regulators is a serious matter, and Parliament rightly takes a close interest in how the FCA and PRA exercise their powers. We have extensively discussed the FSMA model of regulation today. It is the foundation of a system of regulation under which Parliament sets the regulators’ objectives, invests them with the powers that they need to further those objectives and sets out a clear system of governance and accountability under which the regulators are required to account for their actions and effectiveness in furthering the objectives that Parliament has set for them. As I said before, the Government remain of the view that this is the most appropriate and effective model of regulation available. It has served us well and is internationally respected.
The difficulty with this amendment, therefore, is that it would cut across the foundational principle of our regulatory architecture. The FCA and PRA are operationally independent bodies. That independence is not incidental; it is the source of their authority and credibility and, ultimately, their value to the consumers and markets they serve. Under the FSMA model, it is the responsibility of the regulators to interpret their statutory objectives. It is not the role of HM Treasury to do so. This amendment would, over time, erode precisely the independence that makes those regulators effective. Markets, firms and consumers need to know that regulatory decisions are made on the merits, free from political pressure. This amendment, however well-intentioned, risks compromising that assurance.
Of course, Parliament can and does challenge the regulators where it thinks they have done something wrong. Given that their authority ultimately flows from Parliament, the regulators take that incredibly seriously. Parliament can and does make its views known to the regulators on key issues. For example, after a highly critical report from the House of Lords’ Financial Services Regulation Committee, and in recognising the lack of consensus among the stakeholders, in 2024 the FCA dropped plans to change the way that it publicised ongoing enforcement cases.
The noble Baroness, Lady Neville-Rolfe, asked whether the Government are satisfied with the current framework. There is an appropriate requirement already set out in FSMA that is designed to support scrutiny and oversight and, in certain circumstances, to allow the Government to give the regulators some level of direction. For example, the Government can require a regulator to review one of its rules or to appoint an independent person to review those rules where they consider this would be in the public interest. The Government can also require the regulators to make rules but cannot direct their content or purpose.
The regulators have a statutory duty to keep their existing rules under active review. This is contained in Section 3RA of FSMA. Furthermore, the Treasury has an ability to direct regulators to launch an independent review of specified rules, with the outcome laid before Parliament. The regulators are also subject to robust wider parliamentary accountability, including through the information they are required to provide to relevant committees and the vital role those committees play in questioning the regulators and critiquing their work. Those are the appropriate channels for testing the consistency of regulators’ actions with legislation or statutory objectives, not a ministerial statement of concern, which starts to undermine the principles of independent regulation. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Bowles of Berkhamsted (LD)
My Lords, I still think that there is a missing link here, but I heard what the Minister said and it is what I was expecting: the Government are frightened that this would look as if they were going to undermine independence in some way. I fully understand that. There are other regulatory interventions that Ministers make with other regulators, so it is not an entirely off-the-wall idea. It certainly was not meant to be part of the routine kind of application of day-to-day accountability. A “very rare or never” kind of application is what was envisaged, but we have given it an airing. It is not going anywhere. With that, I beg leave to withdraw the amendment.
Baroness Noakes
Member’s explanatory statement
This amendment, together with another in the name of Baroness Noakes, ensures that the FCA and the PRA continue to give guidance about how they intend to advance their objectives.
Baroness Noakes (Con)
My Lords, we now come on to a bit of a ragbag group of amendments, which I should probably have split into more than one group. In moving Amendment 89, I shall also speak to Amendments 92, 93, 94, 96 and 98.
I will start with the FCA’s guidance. At present, the FCA has a power under Section 139A of FSMA to give guidance on, for example, the operation of specific parts of FSMA or its rules. Section 1K says that the guidance must—that is, must—
“include guidance about how it intends to advance its operational objectives … in relation to different categories of authorised person or regulated activity”,
and, inter alia, it has to consult on that guidance. What does this Bill do? Predictably, it eviscerates the provisions. Clause 18(2) removes Section 1K from FSMA, and Clause 18(8) takes all the substance out of Section 139A. This is part of the insidious pattern of this Bill, removing information that regulated persons might find useful—removing guidance about how a regulator would advance its objectives—and removing the requirement to consult on what is left of Section 139A. This is a Bill solely for the regulators’ convenience, regardless of the needs of those subject to regulation. Similarly, Section 2L of FSMA currently requires the PRA to consult those it regulates about how its general policies and practices are consistent with its general duties, and Clause 18(3) removes this. My Amendments 89 and 92 would remove these retrograde provisions from the Bill.
Amendments 96 and 98 are rather different. They concern statutory references to the Financial Services Regulation Committee, and I thank my noble friend Lady Neville-Rolfe and the noble Lord, Lord Vaux of Harrowden, for adding their names. The current FSMA wording about parliamentary committees derives from the 2023 Act, which, as initially drafted, referenced only the Treasury Select Committee in the other place, but that was amended during the passage of the Act to encompass any committee of your Lordships’ House set up to deal with financial services regulation or indeed any Joint Committee of both Houses. Following the passing of the Act, your Lordships’ House decided to set up the Financial Services Regulation Committee, to which I, like others, have referred several times in this Committee. Amendments 96 and 98 merely amend the 2023 wording inserted into FSMA to reflect the fact that your Lordships’ House now has a specific committee which should be referred to in legislation.
When the Bank Resolution (Recapitalisation) Act was passed last year, we managed to get it amended to incorporate a specific reference to the Financial Services Regulation Committee, and I am a bit disappointed that the Treasury, which agreed to those amendments last year, has already forgotten that the FSMA wording is out of date and needs to be amended. I therefore hope that Amendments 96 and 98 are non-controversial and that the Government will accept them. I should explain for those noble Lords who did not take part in the passage of the Bank Resolution (Recapitalisation) Act that the references in the amendments to the Chairman of Committees are in fact references to the Deputy Lord Speaker—when that role was created, it encompassed the function of the Chairman of Committees, but that nomenclature remains in statute. That is the Committee’s fun fact of the day.
My remaining two amendments in this group, Amendments 93 and 94, are pretty arcane for those who have not audited a bank or sat on a bank or insurer’s board. For my sins, I have done both. Following the Parliamentary Commission on Banking Standards, FSMA was amended to require meetings at least annually between the regulators and the auditors of PRA-regulated persons. This was definitely overkill, and I am pleased that the Government have decided to delete most of Section 339B of FSMA, through Clause 18(11). They have, however, retained the requirement for the PRA to do those meetings, even if it no longer has to report on them; my Amendment 93 would remove Section 339B in its entirety. This does not mean that the PRA will never meet the auditors of the bodies it regulates: it used to meet the auditors before Clause 339B was enacted in 2013 and can continue to do so if the clause is eliminated, but it would remove the obligation on the PRA to do so. Clause 339B has in fact spawned a small industry of the PRA thinking up questions to ask the auditors to report on. The auditors then go away and write a report, usually asking their client to produce a lot of information first, and then the auditors ask the client for a fat fee. It is not value-added activity. We should leave meeting auditors to the regulator’s discretion.
In a similar vein, my Amendment 94 would amend Section 340 of FSMA, which requires the PRA to make rules about auditor co-operation. It has a similar provision for the FCA, but that merely empowers the FCA to do so. My amendment is unlike most “may”/“must” amendments in your Lordships’ House. We normally seek to replace “may” with “must”. My Amendment 94 does the reverse, so that the PRA “may” make rules if it chooses to do so, and hence aligns with the FCA by giving discretion to the PRA, which is also what my Amendment 93 aims to do. I beg to move.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, before we continue the debate, we have started group 6 and we have one more complete group to do. We are going to finish at 8.45 pm and I would hate to think that we would finish mid-group, but I am in your Lordships’ hands as to whether we do that.
Baroness Bowles of Berkhamsted (LD)
My Lords, this is the third of the trio. Clause 18 is a deletion clause, the final clause in the trio that removes consideration of the regulatory principles from the context of actual rule-making. It strips out the guidance duties, reporting duties and consultation hooks that once gave Parliament visibility into how the regulators applied their objectives and principles. Let us look at what is being systematically dismantled here. There is some overlap here with some of the things that the noble Baroness, Lady Noakes, has addressed.
Clauses 18(1) and (2) delete the FCA’s and PRA’s guidance about their objectives—the very provisions which, as the Explanatory Notes admit, required the regulators to explain how they advanced those objectives. It is not a question that they still have to explain now; that has gone. Clauses 18(3) and (4) remove the explanations required on directions on consolidated supervision and authorised decisions. Clause 18(7) removes the FCA’s obligation to notify, consult or explain when issuing guidance relating to its objectives. Clauses 18(9) and (10) delete large parts of the FCA’s and PRA’s annual reporting requirements, one of the most sensible and accessible ways for Parliament to understand how objectives were dealt with in practice and would ideally be built upon. Clauses 18(12) to (14) remove linkages to other Acts of Parliament, including the auditor engagement duties that once provided an additional source of supervisory insight.
What is left? Guidance? Gone. Explanations? Gone. Participation? Gone. Annual reporting? Gone. Audit? Gone. These were the exact mechanisms through which Parliament and others scrutinised how the regulators applied their objectives and principles. Clause 18 removes them all. It is the inevitable consequence of the Clause 16 and 17 shift: the practical reality of decoupling principles from operational effectiveness and removing Parliament’s line of sight. It leaves us with no checks and absolutely no balances. For these reasons, I oppose Clause 18 standing part of the Bill.
Lord Pitt-Watson (Lab)
My Lords, I will speak to Amendments 93 and 94. I have not audited a bank or sat on a bank board, but I was a member of the Sharman committee that looked at the problems with auditing following the global financial crisis. I sat on the board of one of the big four auditors, chairing its public interest committee, and I talked to a number of partners who audited the banks.
I think that we agree that audit is absolutely a foundation stone for the integrity of the capital markets. For those who are interested, it was part of the settlement following the collapse of the City of Glasgow Bank in 1878 that we would have audits of limited liability banks. It is particularly critical where entities are highly geared or where there is a considerable element of judgment in determining their value. If we look at the banks, they are hugely geared. People like to talk about the common equity tier 1 ratio, but if we look at the gearing that most companies use, it is the equity versus the liabilities. For a typical bank, equity is about 6%: on the back of that, you can borrow £94 and lend £100. That means that, if you have overvalued your assets by 3% and undervalued your liabilities by 3%, you end up with no equity whatever.
This is a really sensitive calculation and, historically, it would have been made with a degree of prudence and conservatism. Prudence and conservatism have now gone as guiding principles, and valuations are done neutrally. For example, this would allow a bank to declare a profit on a zero-interest credit card, on the grounds that it can bring forward the profits it thinks it will make in future. The noble Baroness, Lady Bowles, has been great in raising these issues for some time.
There are of course huge temptations to optimism. Indeed, it is surely testament to the professionalism of our bankers, and the independent agents we employ to monitor and control bank behaviour, that banks have not got into greater trouble. There are four such agents: the independent non-executive directors; the auditors; the investors and the regulators. Many more resources are devoted to auditing banks than to regulating them, and vastly more than fund managers devote to their role as stewards. The auditors have inside knowledge and huge expertise, and it is precisely that insight, given independently, that regulators need in order to play their role.
I think that that was recognised by the noble Baroness, Lady Noakes, when she suggested that the PRA “may” ask to speak to the auditors. The problem is that the auditors have a delicate job: they are referees. The report is done for the investors, but they need the trust of the audited entity. Indeed, they are, in effect, appointed by the audited entity, and they even sometimes describe the audited entity as a client. They are unlikely to go to the regulator without having profound concerns.
Regulators may find it helpful to call in the auditors because of problems that are visible to them: the known knowns. Under those circumstances, this amendment would of course work. However, what the regulator really needs to know is the unknown knowns: something that is known by the auditor, who has gone inside, but not known by the regulator. That is why it makes sense to mandate that the regulator “must” talk to the auditor to hear their concerns, to pick up potential emerging problems before they become critical, and to understand how the auditor judged the numbers to be true and fair.
The audit is the foundation of the integrity of our capital markets. For auditors to have material knowledge of a bank’s position that is relevant to the stability of the system and for that not to be known by the regulator seems to be completely perverse and potentially very dangerous. With that perspective, I wonder whether the noble Baroness, Lady Noakes, might be content with Clause 18, on audit reporting, to remain as it stands.
Baroness Neville-Rolfe (Con)
My Lords, we are sympathetic to the concerns raised by noble Lords across this group. I was glad to add my name to several amendments tabled by my noble friend Lady Noakes. I entirely agree with her and with the noble Lord, Lord Vaux, that the role of the relatively new and very effective Lords Financial Services Regulation Committee should be added to the 2023 Act. We are lucky to have such an assembly of experts and effective questioners, as well as Lords clerks, to help with the enormous task of scrutiny in the financial services sector.
We have just been discussing the accountability of the regulators, the importance of scrutiny and the need to ensure that the FCA and PRA exercise their considerable powers in a way that is transparent, proportionate and properly justified. This group raises those same issues in the more specific context of guidance, consultation, cost-benefit analysis and the way regulators explain the impact of what they do. I look forward to the Minister’s response to the noble Baroness, Lady Bowles.
Our Amendment 90 asks a serious question about cost determination. The cost-benefit analysis panels within the regulators are an existing mechanism of accountability. They are designed to provide scrutiny of the costs and benefits of regulatory proposals and to help ensure that regulators properly consider the burden that their rules impose.
But there is a significant limitation. As I understand it, the cost-benefit analysis panels are engaged only where the regulator makes a rule change that the regulator itself considers to be materially significant. Should there not be a more independent mechanism for testing whether a regulator’s view that a proposal has no or minimal cost impact is actually correct? If the regulator decides that a proposal has no or only minimal cost impact, then the process may not trigger a cost-benefit analysis—but that judgment may itself be contestable, especially if it is a net threshold, hiding both the costs and the benefits. Firms may take a very different view about the practical cost of implementation, the operational burden, the systems changes required and the cumulative impact when viewed alongside other requirements. Indeed, cumulative effect is a concern rightly enshrined in my noble friend Lady Noakes’s Amendment 119, which we will discuss on a later group.
There is also a wider issue. The cost-benefit analysis panels are not generally able to assess changes in guidance or enforcement activity. Guidance can be hugely significant in practice. Enforcement activity can create powerful incentives and costs across the sector, even beyond the firm that is directly affected. So the question is not simply whether a formal rule change has costs; it is whether the regulators’ activity as a whole is proportionate, whether it is evidence-based and whether the burden it places on firms is properly understood. That is why we want to press the Minister on whether the Government will give thought to expanding the remit of the cost-benefit analysis panels. For example, how will they operate in relation to the FCA’s new powers on credit, on in-person banking and on payment regulation?
Equally importantly, should they not be able to consider whether guidance, supervisory expectations and certain enforcement-related approaches carry material cost implications? Cost-benefit analysis forces a discipline on regulators. It requires them to summarise what they are doing succinctly and clearly, and to ask whether the benefit justifies the burden, whether the same objective could be achieved in a less costly way and whether the cumulative effect of regulations is proportionate. I always turn to the impact assessment of a rule if it is available, as it allows one to get to the heart of what is happening.
The broader point is that transparency, consultation and cost scrutiny are not bureaucratic obstacles to good regulation; they actually help to prevent unintended consequences and excess red tape, and they sometimes draw attention to harm to SMEs. They give Parliament and industry confidence that regulatory powers are being exercised responsibly.
So I would be grateful if the Minister could address the specific issues raised by Amendment 90. I have five questions, to which the Minister may want to respond by letter if necessary. First, who in practice decides whether a proposed regulatory change has no or minimal cost impact? Secondly, what is the threshold, in millions of pounds, and is it gross or net of benefits? What safeguards exist to test that judgment? Fourthly, are the Government satisfied that the cost-benefit analysis panels have a sufficiently wide remit? Fifthly, will the Minister consider whether that remit should be expanded to include guidance, supervisory expectations and other regulatory activity that may impose material costs on our important financial services sector?
As we have said throughout Committee, accountability must keep pace with regulatory power. If regulators are to be given more responsibility, the scrutiny of their decisions, their processes and their costs must be strengthened. I will listen carefully to all the Minister’s responses on cost-benefit and, unless these are satisfactory, the Opposition will want to bring forward an amendment on Report.
Lord Stockwood (Lab)
My Lords, I begin by explaining the Government’s purpose behind Clause 18 and why it should stand part of the Bill. Over time many reporting and procedural requirements have been placed on the FCA and the PRA, increasing burdens, introducing duplication and in some cases complicating oversight, scrutiny and accountability. There is broad agreement that this dynamic is true for firms subject to regulation. I ask noble Lords to reflect on whether it might also be true for the regulators and on whether that is slowing them down and ultimately having a negative impact on firms and consumers.
These burdens are not without consequences. The regulators must follow the letter of these requirements, diverting time and resources away from other work. Ultimately the cost of that work is passed on to firms through the levy they pay and through their engagement with the asks of the regulator. The Government’s view is that there is scope to rationalise parts of this approach to enhance the effect of scrutiny and to help regulators become more agile and ultimately better support innovation and growth.
The Government sought feedback on which regulator publications stakeholders found most useful and then worked closely with the regulators to consider this feedback and further assess the range of requirements placed on them. Feedback to the regulatory environment consultation indicated very low engagement with certain types of regulator publications, and the regulators’ data confirms this. In recent years, the FCA and the PRA consulted on several proposals to which they received zero responses, although I accept that not all publications are created equal.
I have listened carefully to the concerns raised, particularly the argument that these provisions remove practical tools that help Parliament and stakeholders understand what the regulators are doing and why. I recognise that concern, and that is why the Government have approached this area carefully. Clause 18 is carefully targeted and relatively modest. The Government are retaining the vast majority of the existing transparency and reporting framework. Clause 18 is focused on removing a small number of requirements where the burden of complying is disproportionate to their value. These changes do not prevent the regulators undertaking any of these activities where they judge it useful to do so. Instead, they give the regulators greater flexibility to focus on delivering their strategic priorities.
This clause must also be read in the context of the wider framework. The Bill introduces new long-term strategies, maintains the requirement for regulators to respond annually to Treasury recommendation letters and provides for an additional annual report on how the FCA and the PRA have complied with their competitiveness and growth objectives. Taken together with the existing framework in FSMA, these measures are intended to strengthen overall transparency, not weaken it.
I turn to the amendments, starting with Amendment 89—
Baroness Noakes (Con)
Before the Minister moves on, can I just press him on the evidence of stakeholders that has been relied upon to sweep away so much stuff in Clause 18? Did the stakeholders specifically say they were not interested in guidance that was issued by the regulators or in the consultation on that guidance?
Lord Stockwood (Lab)
Unfortunately, the precise question was not asked in the consultation.
Baroness Noakes (Con)
So on what basis are the Government making the decision to remove the requirement under FSMA to issue the guidance, and obviously, therefore, to consult on it?
Lord Stockwood (Lab)
I will have to come back to the noble Baroness. The broader requirement is that we are trying to streamline the process to take the regulatory burdens away. We recognise that we need to give a precise answer on that.
Baroness Bowles of Berkhamsted (LD)
The Minister mentioned taking away regulatory burdens, but the Government are actually taking away regulator burdens. They are not the same thing.
Lord Stockwood (Lab)
They are not the same thing. The approach we are trying to take is to streamline duplication while not in any way detracting from the overall process. That is the principle we are trying to follow here.
Amendment 89 would preserve the statutory requirements on the FCA and the PRA to give guidance about how they intend to advance their objectives. This requirement was introduced by the Financial Services Act 2012, and since it came into force, both the FCA and the PRA have published guidance fulfilling this requirement, which is updated when necessary. For example, most recently the PRA updated this approach to policy statements in February 2025. Removing these statutory requirements will not prevent the regulators giving such guidance where they consider it beneficial to do so. These requirements would also be duplicative with the new long-term strategies, which will set out the regulators’ approach and priorities for advancing their objectives, as well as other statutory publications, such as the regulators’ annual reports.
Baroness Kramer (LD)
Is the Minister suggesting that, in dealing with the long-term strategy, there will be the same level of detail as is normally provided in guidance? I am somewhat confused when he explains that one is a substitute for the other.
Baroness Kramer (LD)
If I understood the Minister correctly—do correct me if I am wrong—the FCA or the PRA will have the opportunity to provide guidance if they deem it necessary. But if they choose not to, that should not be worrying, because the equivalent statement will occur either in the five-year strategy or in a report on how the FCA is achieving its five-year strategy. Is he suggesting that that will be at the same level of detail as the guidance that is required today? That is what I am trying to understand.
Lord Stockwood (Lab)
I believe that they still have to publish the full guidance, but let me come back with a written response on that.
Turning to Amendments 90 and 92, the Government recognise the impact that changes in rules and guidance can have on firms, particularly smaller firms and regulated persons trying to understand what is expected of them. The government reforms are intended to avoid imposing full consultation and cost-benefit analysis requirements where proposals are genuinely minor or low impact, while preserving the wider consultation framework for substantive changes. Minor changes to rules include corrections, clarifications or minor technical updates, and it will be for the regulators themselves to determine whether a rule change meets this definition, as they are best placed to assess the impact of such changes. For example, last year, the FCA consulted on reducing late filing charges from £250 to £100. Under this provision, the FCA would not be obliged to consult and could make these changes faster.
Baroness Kramer (LD)
What if the change had been in the other direction and had added an additional £100 pounds? Would the FCA have been in a position to decide that that was not material for consultation?
Lord Stockwood (Lab)
I think there is a broad principle: we are trying to give the FCA the power to make those small changes in both directions.
Baroness Noakes (Con)
Where does that power begin and end? I can understand it when we are talking about hundreds of pounds; I am not sure I understand how much flexibility is now being given to the regulators to do things. We can probably recognise, at one end of the spectrum, something that is very significant, but who is the arbiter of what is so unimportant that it does not have to be consulted on? The regulator. Are the regulators the right people to make that decision? No, they are not, because they are not the people affected by the change.
Lord Stockwood (Lab)
Our overarching principle is that we are trying to show trust in the regulators while recognising the significant feedback from the debate today. We are hoping that minor changes will be in their gift and their expertise.
I will come back to my notes here. The measure is about giving the regulators the flexibility to gather industry input in more efficient ways. It is not about bypassing industry, but rather about recognising that the industry’s time is valuable and should be focused on engaging with consultations that genuinely have impact. Other channels, such as round tables with firms, supervisor interactions, meeting with trade bodies and engagement with statutory panels, can provide a more efficient route to understand industry’s issues on what are minor or technical changes. The Government’s view is that retaining these specific requirements in all cases would preserve unnecessary process, even where it adds little value in practice, and that the Bill preserves consultation requirements in most cases and where there is genuine value for the sector, as well as regulatory oversight.
Amendments 93 and 94 seek to remove all requirements on the PRA to meet the auditors or PRA-authorised persons. As the noble Baroness, Lady Noakes, noted, the Bill removes the requirement for the FCA to meet at least once a year with the auditor of any PRA-authorised firm that has been designated as important to the stability of the UK financial system. Requiring both the FCA and the PRA to meet PRA-authorised firms is duplicative and unnecessarily burdensome in terms of the effective use of resources. However, the Government’s view is that removing all requirements around engaging this important group of auditors would go too far. It is vital that the PRA continues to engage with these auditors and plan for meetings to take place at least annually, to ensure that the PRA can secure the valuable insights into the health of systemically important, regulated firms that auditors can provide. It is for this reason that the Government cannot accept these amendments.
Baroness Noakes (Con)
My Lords, I thank all noble Lords who have taken part in this debate. Clause 18, guidance, consultation and whether regulators can be trusted is unfinished business as far as this Committee is concerned. I look forward to getting the answers on questions that have been put, but my instinct is that the Government’s approach is going too far in favour of letting the regulators determine what their interactions will be with the regulated community. On the one hand, there are independent regulators which need forms of oversight, and this Bill is just chipping away all the time at those points at which there can be some interaction between those charged with the oversight of them. By constantly removing these points at which there can be some intervention, we end up with a weaker situation overall. I will need to think very carefully about what we do about Clause 18 in general when we get to Report. I think it is part of the issues that we have been developing. Clauses 16, 17 and 18 are all part of one picture that we need a more satisfactory answer to.
Turning to the auditors. I was not trying to stop auditor meetings—
Lord Wilson of Sedgefield (Lab)
I mentioned at the beginning of this afternoon that when an amendment is being pressed, noble Lords have to be short. The withdrawal of amendments is starting to take longer and longer, which eats into the time for the other groups.
Baroness Noakes (Con)
I hear what the noble Lord has said. I think it is important that we have the opportunity to comment before withdrawing amendments. It is not simply a case of getting up and saying, “I withdraw”.
Lord Wilson of Sedgefield (Lab)
I just say to the noble Baroness that it is clear in paragraph 8.82 of the Companion that noble Lords should
“be brief and need not respond to all the points made during the debate”.
Baroness Noakes (Con)
My Lords, I had no intention of responding to all points made in the debate. There are a number of different amendments in this group. They could have been degrouped into four or five separate groups, and we could have had a short winding-up on each one of them. We have effectively four groups here, so we are going to be talking about all of them.
On auditors, I was not trying to suggest that auditor meetings should not take place: of course, there is value in those meetings, which have taken place for decades. They were not invented when FSMA was being drafted; they were already part of the thing. The amendments are not that important; I was simply trying to give the PRA the same flexibility that the FCA has.
On the nomenclature in the Act and the Financial Services Regulation Committee, I give notice that I will return to that matter in Committee. My committee will think that it is important that, now that it exists, it is reflected in statute. I beg leave to withdraw my amendment.
Baroness Noakes
“FCA and PRA secondary competitiveness and growth objectivesThe Financial Services and Markets Act 2000 is amended as follows—(a) in section 1EB (competitiveness and growth objective) for “aligning with” substitute “consideration of”;(b) in section 2H (secondary objectives and duty to have regard to regulatory principles) for “aligning with” substitute “consideration of”.”Member’s explanatory statement
This amendment modifies the secondary competitiveness and growth objectives of the FCA and the PRA by requiring international standards to be considered rather than aligned with.
Baroness Noakes (Con)
My Lords, I will speak also to Amendments 100 and 102 in this group. I thank my noble friend Lady Neville-Rolfe for adding her name to Amendments 99 and 102, and I thank the noble Lord, Lord Vaux of Harrowden, for adding his name to Amendments 99 and 100. My noble friend Lord Hunt of Wirral is unable to be with us today, as he is on our Front Bench in the Chamber dealing with the Steel Industry (Nationalisation) Bill, so I shall also speak briefly to his Amendment 101.
Amendment 99 concerns the secondary competitiveness and growth objective, which applies to both the FCA and the PRA. When it was introduced in the 2023 Act, it was no secret that the regulators were less than enthusiastic. Our regulators have always been heavily involved with the international financial institution community. They often act as chairmen, as is currently the case with the Governor of the Bank of England and the Financial Stability Board. They are members of as many committees as they can get on, and they are completely embedded in the international standards infrastructure. It was unsurprising, therefore, when they managed to convince the Treasury that it should make the secondary competitive and growth objective subject to alignment with international standards.
During the passage of the 2023 Act, I tried to get this watered down, because I had a real concern that the PRA and the FCA would hide behind international standards when making rules, in a way that does not optimise UK competitiveness and growth. International standards are a good thing, but only if all the major countries implement them. In fact, there is a history of patchy adoption—not least by the United States of America, which is, of course, one of our main competitors in financial services. Unfortunately, the Treasury supported the regulators and kept alignment in the 2023 Act.
I return to this theme with Amendment 99, which would change the words of the competitiveness and growth objective so that the regulators must consider international standards only, rather than automatically aligning with them. We have had three years of experience of the operation of the Act. It is time, I believe, that we made growth and competitiveness an unambiguous part of the regulators’ objectives.
In the past three years, we have seen the continuation of US exceptionalism. It has not implemented Basel III, and we have to remember that it never implemented Basel II. To be fair to the PRA, it has found reasons to follow what other countries are doing to delay certain aspects of Basel III and has performed contortions to justify implementing other aspects in a way that does not fully hit smaller UK banks, but the fact is that other countries are implementing Basel III in ways that suit them, and it would be more honest if our own regulators were given that freedom.
Another problem area in bank capital is the requirement to hold MREL, the minimum requirement for eligible liabilities. This started as a European requirement that went way beyond the international rules for total loss-absorbing capital for global systemically important banks. The UK has just three G-SIBs out of 29. Unfortunately, the UK sets MREL for many more banks than three. This is not set by the PRA, which might have a problem justifying it by reference to international standards, because the international standards are clearly less than the European model which we are sticking to. It is in fact set by the Bank of England, which does not have a competitiveness and growth objective. This shows what happens when regulation is detached from the interests of the UK economy.
I turn to the FCA. When the Financial Services Regulation Committee looked at stablecoins, we asked the FCA about its work on stablecoins aligning with the secondary competitiveness and growth objective. The director of payments and digital assets at the FCA was keen to tell us what the FCA did on committees at IOSCO, how it helped to draft the FSB’s paper on stablecoins and how it brought together regulators and standard-setting bodies in London. Although the executive director for payments said that the FCA was trying to find solutions right for the UK, it is clear that the instincts of the regulators’ staff is to look to international standards bodies rather than to think about what is best for UK competitiveness and growth. I do not think that the secondary objective’s potential will be maximised while the comfort blanket of international standards is reinforced by the FSMA requirement to align with them.
Amendment 100 is much more straightforward and I hope that it is uncontentious. I fully support Clause 20’s requirement for the regulators to report annually on the secondary objective. The two initial reports required by the 2023 Act make it clear that the competitiveness and growth objective is not a finite event but a continuing challenge. This was also one of the key findings of the first report by the Financial Services Regulation Committee. My amendment would merely require the Treasury to lay the annual reports before Parliament. It is customary to lay key accountability documents before Parliament. If this is not a key accountability document, I do not know what is. I hope that the Minister can accept this amendment.
I was going to go on to Amendment 101 in the name of my noble friend Lord Hunt of Wirral, in anticipation of his absence, but I see that he is with us, so I will not speak to his amendment but will conclude with my final amendment in this group, Amendment 102.
Lord Wilson of Sedgefield (Lab)
I am afraid that the noble Lord, Lord Hunt of Wirral, was not here at the start as he came into the Room two minutes late, so the noble Baroness may go ahead.
Baroness Noakes (Con)
I thank the noble Lord for telling me about my noble friend’s disqualification from speaking; I will now speak to his Amendment 101. I find that it would be a useful addition to Clause 20, by imposing some modest requirements such as making the reports comparable with previous reports and covering things such as the cumulative cost of regulation and an explanation of how proportionality has been applied, including for SMEs. I do not think that any part of this amendment should be controversial, and I hope that the Minister will be able to accept it.
Baroness Noakes (Con)
My last amendment in this group, Amendment 102, is also about the secondary competitiveness and growth objective, but, this time, for the Financial Market Infrastructure Committee of the Bank of England. The FMIC was set up with a secondary innovation objective, and there is clearly a link between innovation and growth and competitiveness—but they are not synonymous. I am not sure why the FMIC was set up with innovation objectives rather than full competitiveness and growth objectives, and I do not recall a substantive debate on that during the passage of the 2023 Act.
Lord Bridges of Headley (Con)
My Lords, I agree with all the amendments to which my noble friend Lady Noakes just spoke, but Amendment 99 merits attention. I will speak to it very briefly, as I get a sense that everyone is wanting to get out of this lovely Room to eat something.
This amendment asks an interesting question; perhaps the Minister can answer it when he winds up. I am interested in what is more important. Is it the alignment with global international standards, or is it the competitiveness and growth objective? When one is thinking about these international standards, do we think that it is more important to align with those standards than it is to improve the competitiveness and growth of the financial services sector? I ask this as a genuine question. I can see an argument for saying that alignment with international standards adds to competitiveness and growth, but, if we believe that those international standards undermine growth, what is more important?
I ask that because—once again, I draw your Lordships’ attention to my entry in the register—every day, I am seeing, as my noble friend Lady Noakes alluded to, the fragmenting of international standards. Noble Lords may take very different views on that, but it is undeniably the case that the overall approach of the large financial sectors to adhering to those standards, if they ever really existed, is now under enormous pressure. Therefore, if we want to retain the competitiveness of the City and its contribution to the growth of this country, we need to be very mindful of that. If we want to continue to attract high levels of global capital here, we cannot, to my mind, just blindly say, “We must align with international standards”, without being fully cognisant of the consequences.
The amendment moved by my noble friend asks a very big question, which I look forward to hearing the Minister address.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly to speak against all of these amendments, but the noble Lord, Lord Bridges, has asked an interesting question here: are we making this legislation for the City or for the country? My question to the Minister, therefore, is: does aligning with international standards mean that we can actually set higher standards? That is certainly what I would like us to do in terms of money laundering and the other issues that I raised earlier, but I think that the assumption in this amendment is that we might set lower standards.
One of the things that aligning with international standards would do is improve our international standing in this uncertain geopolitical age. Undercutting standards would be severely damaging to our international standing in the world. That is a much broader question than just the City.
I will cover all these amendments collectively. It is no secret that throughout all the previous financial services Bills I have worked on, I have opposed competitiveness and growth objectives. I am sure the noble Lord, Lord Vaux, will be delighted to know that it was his earlier contribution to the clause stand part debate that helped me to see clearly that what we are doing here is singling out the growth and competitiveness objectives from everything else. One of the ways in which noble Lords tried to deal with that in earlier groups was by adding crucial issues such as climate. The other way of approaching the problem, which I may well be tempted to do on Report, is by proposing that Clause 20 does not stand part.
It is important to raise the issue again now, given that just this week the Bank for International Settlements has spoken about the financial risk associated with big tech’s AI spending spree—in its terminology—which could lead to a prolonged investment bust that could have significant impacts on financial markets and the global economy. It produced the figure that the five biggest hyperscalers expect to invest more than $1 trillion from 2025 to the end of 2026. We are in a position of risk, so I believe we should look at growth and competitiveness again.
Amendments 102 and 104 seek to extend further than the Government have gone on the growth and competitiveness agendas. That is an extraordinarily bad and extremely risky idea. I am happy to carry forward that idea and keep saying it on Report.
Lord Wilson of Sedgefield (Lab)
My Lords, we have come to the end of the time available for Grand Committee today. Although it is unusual, I beg to move that the debate on this amendment be adjourned. We will return to this debate on the next day in Committee. Only those noble Lords present at the start of this group can speak when the group resumes. I have asked the clerk to circulate a list of those present in the usual channels.
House of Lords
Palantir: Public Service Contracts
(1 day, 4 hours ago)
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Baroness Chakrabarti
To ask His Majesty’s Government what assessment they have made of the human rights and reputational risks presented by their public service contracts with Palantir.
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
My Lords, government departments operate within a robust procurement and assurance framework, ensuring that contracts are awarded only where requirements are met and no exclusion grounds apply. Palantir’s software is used globally across public and private sectors. Within the UK Government, its use is governed through established legal and assurance frameworks. In defence, Palantir supports data integration and AI-enabled analysis, providing timely insights that improve operational planning, decision-making and effectiveness.
Baroness Chakrabarti (Lab)
My Lords, I am perennially grateful to my noble friend. If we are to avoid a future Fujitsu-style scandal of even greater proportions, how can our public money, personal data, national security and reputation be safe in the hands of a company credibly implicated in gross human rights violations, both in Gaza and ICE operations in the United States?
Lord Coaker (Lab)
My noble friend is quite right to challenge the Government on these incredibly important issues around human rights and how the Government establish their contracts. To be clear about the UK Government, we are talking about a relationship and contracts that are negotiated with Palantir UK. The contracts that we operate with Palantir UK have strict protocols in place. We retain full ownership and sovereign authority over all defence data, including how it is stored, how it is accessed and how it is used. Contracts with suppliers include legally enforceable provisions to ensure that data sovereignty is maintained. I understand the points that my noble friend raises, but with respect to our contracts with Palantir UK, we ensure that the correct provisions are in place.
Lord Austin of Dudley (Non-Afl)
My Lords, given the Government’s decision to partner with Palantir as part of their defence modernisation programme and the role that advanced data and AI capabilities will play in future warfare, does the Minister agree that such technologies are critical to delivering the strategic defence review, strengthening the UK’s ability to respond to hostile state threats and supporting the Government’s wider objectives for growth, innovation and defence-industrial capacity?
Lord Coaker (Lab)
My noble friend makes a really important point. Many people across this Chamber will know that the responsibility of government requires difficult decisions to be made. As my noble friend Lady Chakrabarti has rightly raised, there are sometimes difficult decisions and difficult dilemmas to be resolved. Alongside that—my noble friend asked about defence—we have a responsibility to ensure that with the AI capability and the data management capability, we can take forward our strategic defence review and can give our Armed Forces and those who work with them the best possible tools to ensure that we deliver the objectives of His Majesty’s Government. That is what we seek to do, while recognising the moral responsibilities we also have.
Lord Gove (Con)
My Lords, I am grateful, as ever, to the Minister for his lucid and authoritative response. When I was a Minister, I saw how Palantir’s technology helped to save lives in the NHS. I saw how Palantir helped to ensure that those fleeing persecution from the Ukraine war could have a safe home in this country. I also appreciate that Palantir is playing a role in defending democracy, not just in the Middle East but in Ukraine. Is it therefore not a matter of regret to the Minister, as it is to me, that the Mayor of London has specifically ruled out Palantir helping to fight crime on the streets of London when the commissioner of the Metropolitan Police has made clear that, as a result of the Mayor of London’s decision, our citizens will be less safe?
Lord Coaker (Lab)
My understanding is that the mayor and the commissioner have now reached an arrangement with respect to the activity of Palantir within the Metropolitan Police, where there will be a 12-month period to establish a proof of concept as to whether Palantir can move forward. The mayor and the Metropolitan Police commissioner have agreed that because, as the noble Lord says, the commissioner believes it will help fight crime. It is a matter for them to resolve that, but it seems they have found a way in which both are happy to try to take it forward.
I do not want to underestimate the moral questions that Governments sometimes have to answer. The noble Lord knows the issue of education particularly well, but let us look at the issue with respect to health: 41 ICBs and 171 trusts have signed up to use the NHS federated data platform; more than 100,000 extra patients have been seen; hundreds of thousands of patients have been safely removed from the waiting list; and nearly 94,000 patients have been supported on their cancer journey. That is the sort of dilemma that Governments need to resolve to try to find the best way forward.
Baroness Smith of Newnham (LD)
My Lords, on these Benches we understand the importance of the Armed Forces modernising, including with AI. My understanding is that Palantir received a £240 million contract without the MoD going out to tender. While there are clearly national security exemptions for genuinely exceptional cases, is the Minister concerned that this could just move towards being a way of avoiding competition rather than helping national security? Will the next contract go out to procurement?
Lord Coaker (Lab)
The noble Baroness is quite wise to raise that point; it is a question I asked too. Officials told me that it was the only company—the only available platform—that could provide what the MoD needed and give us the operational capability that was required. Under the single tender regime—I cannot remember the exact title—where there is no other option available, it is okay and legal for the Government to operate in that way. That is why the Government did that. Of course we are looking at whether other people can provide the sort of expertise that the noble Baroness refers to, but there was no point going out to procurement when the only provider was Palantir.
Baroness Goldie (Con)
My Lords, by common assent, Palantir’s technology has rapidly and dramatically improved the Ministry of Defence’s logistics and operational planning systems without either human rights or reputational risks. Given that the current challenge confronting the MoD is recognised in the SDR, which recommended achieving a 10% efficiency saving by greater use of AI systems, what progress has been made on that objective to date?
Lord Coaker (Lab)
The noble Baroness will see in due course some of the ways in which we are taking forward AI, but she is quite right to ask about this. AI is crucial to the future provision for our Armed Forces and to enabling them to have the capability and capacity they need for the conflicts of the future. Palantir is one example of the way in which we seek to take that forward. Other options will be brought forward as part of the defence investment plan. Clearly, AI is the future of much of the technological co-operation that will be needed both within government and with our allies.
Lord Spellar (Lab)
My Lords, the Minister is quite right to resist attempts, which happen quite regularly, to demonise individual companies rather than looking at the underlying reality. He is also right to look at results. In this very fast-changing world of information technology, the company leading this year may well not be leading next year or even in six months. I recognise that Palantir has a major presence in the UK, which is welcome, but other companies are available. I caution against the department and the Government becoming overdependent on individual companies that almost become too big to fail, as we have seen in other sectors.
Lord Coaker (Lab)
My noble friend makes a really important point. Palantir provides us with the capability that we require at the moment, but he will be reassured by the fact that, alongside granting this contract to Palantir for the next three years from this April, we are seeking to look at options with small and medium-sized and other companies that could provide the same capability, so that we have a competitive process in future. That also answers the noble Baroness’s point. I suggest that will keep Palantir on its toes in the marketplace as well.
Baroness Bennett of Manor Castle (GP)
My Lords, have His Majesty’s Government considered applying a fit and proper person test to owners and managers for public sector IT contracts, particularly those involving Britons’ private data, with particular attention to their respect for human rights and the rule of law? If they do not have that, the contracts will not be worth the paper they are written on.
Lord Coaker (Lab)
I understand the point that the noble Baroness is making, but the point I made at the beginning is that these contracts are with Palantir UK. Anyone who has been a Minister knows that contracts signed on behalf of the Government have to have a fit and proper process. We will not take on people to run things for us who have criminal records of a particular sort, do not pass the monetary test or have other considerations around them that mean we see them as a security threat—of course we would not. The people who have gone through this process and been given the contracts have passed the tests set for them as part of the risk assurance process.
The noble Baroness is perfectly entitled to her opinion, but taking the decision not to grant Palantir the contract would have consequences as well—many patients now being seen would not be seen, many crimes being solved would not be solved and the operational abilities and capabilities of our Armed Forces would be undermined because no one else can provide that capability. That is the side that I am on. The noble Baroness can take the side that she is on.
Covid Fraud
(1 day, 4 hours ago)
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Lord Foulkes of Cumnock
To ask His Majesty’s Government what action they have taken regarding the recommendations in Pursuing Recoveries and Preventing Reoccurrence: Final Report of the Covid Counter Fraud Commissioner, published on 9 December 2025.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, on 23 June, I laid the Government’s response to the Covid Counter-Fraud Commissioner’s report before this House setting out our plan to pursue those who defrauded the state during a national emergency, to put money stolen by fraudsters back into the public services and to tighten our counter-fraud controls to make sure that this scale of fraud can never happen again.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I am grateful to my noble friend for that reply, but does he not think it strange that Peter Murrell is in jail for embezzlement of £400,000 whereas not one person responsible for £10 billion of fraud has been charged, let alone convicted? Will the Government speed up their action to use legal methods against these people and recover the money, which, I am sure my noble friend will agree, will help balance his books?
Lord Livermore (Lab)
I am very grateful to my noble friend for his question and his continued determination to see justice in this matter, which I share. Covid fraud and corruption is an appalling financial scandal that has cost UK taxpayers dearly. I thank the commissioner, Tom Hayhoe, for his tireless efforts to chase down fraud so that public money can be used as intended on public services such as hospitals and schools, as my noble friend said. The Government will continue relentlessly to pursue Covid fraud to retrieve taxpayers’ money, to hold those responsible to account and to ensure that such failures can never be repeated. In his report, the commissioner made 22 separate recommendations. The Government have fully accepted 18 and partially accepted the remaining four. The Treasury will now establish a Minister-chaired scrutiny panel to review the implementation of the recommendations every six months for at least the next two years.
Baroness Kramer (LD)
My Lords, fraud during Covid—heinous though it was—was carried out mainly by individuals and individual firms. Do the Government accept that, with AI, the character of fraud has now evolved into highly co-ordinated operating systems falsifying identity, behaviour and documentation, and it escapes detection by using digital money—primarily stablecoin and primarily among that tether? Work by Juniper Research shows that in 2025, tech platforms earned £430 million from scam ads in the UK alone. Will the Government require the tech platforms to close down these crimes?
Lord Livermore (Lab)
While I absolutely accept what the noble Baroness says about the evolving nature of fraud, I am not sure that I fully accept it is becoming as overwhelming as she says. I understand that the FCA is engaged in cracking down on exactly the type of practice she outlines, and we fully support its actions to do so.
Lord Pitkeathley of Camden Town (Lab)
My Lords, I declare my interest as a previous small business owner. While greater transparency for regulators is clearly desirable, can the Minister confirm that the Government have listened to concerns from small businesses about making commercially sensitive profit and loss accounts publicly available? Can he also explain how the balance has been struck between improving fraud detection and protecting legitimate commercial confidentiality?
Lord Livermore (Lab)
I thank my noble friend for his question, and I agree with the underlying point he makes. In his report, the commissioner recommends that small companies and micro-entities be required to file profit and loss accounts with Companies House under the Economic Crime and Corporate Transparency Act 2023. I said before that the Government have only partially accepted four of his recommendations, and this is one of them. While small businesses and micro-entities will be required to file profit and loss statements, as announced in June 2026, this requirement will come into effect in April 2028—one year later than initially anticipated—to give companies and businesses time to prepare. Small companies and micro-entities will have the option to opt out of publishing their profit and loss information on the public companies register. These changes reflect the Government’s consideration of concerns raised by stakeholders following the June announcement. The opt-out option addresses legitimate concerns about the commercial sensitivity of profit and loss information for smaller companies. Publishing this data on a public register carries privacy and competitive risks that are disproportionate for businesses of this size.
Lord Watts (Lab)
My Lords, the company owned by the noble Baroness, Lady Mone, owes the taxpayer £120 million. People who defraud the benefit system by £100 or £200 end up in jail; why is she not in jail? Why do the Opposition not say anything about this type of fraud, which brings disgrace on this House?
Lord Livermore (Lab)
The Government have been clear that we expect robust action to be taken to protect the taxpayer, and we have fully supported the appropriate legal and insolvency processes being followed. As I understand it, PPE Medpro Ltd is now in liquidation, and matters related to the recovery of funds are therefore for the liquidators to pursue in line with their statutory duties. Any recoveries that can be made will be determined through those independent processes. It would not be appropriate for me to comment on those proceedings.
Lord Sikka (Lab)
My Lords, one of the problems with the commissioner’s report on Covid fraud is that it pays little attention to the role of consultants in devising various schemes. For example, the furlough support scheme did not ask companies to provide the national insurance numbers of employees; it was, therefore, open to fraud. Companies seeking loans were not required to say when they were formed and what their HMRC reference number was; again, it was open to fraud. Are the Government still using the same consultants? Have they taken any action to ensure that those consultants pay the price for the poor design of various schemes?
Lord Livermore (Lab)
I am afraid I do not know whether we are still using the same consultants; I am more than happy to check for the noble Lord.
Baroness Neville-Rolfe (Con)
My Lords, I think we need to stand back and take a broad view of the problems. We all know that Covid was a challenge right across government and that fraud was an issue. However, the important thing is to do better next time, which is why we set up the Public Sector Fraud Authority in 2022 and introduced the use of AI into fraud detection, which helped with some of the sort of problems that have been raised. Given the doubt expressed in parts of the report, is the Minister confident that the Government of the day will, in practice, do significantly better next time? I am looking for a commitment here.
Lord Livermore (Lab)
I can fully understand the noble Baroness’s desire to stand back from this. On entering government, this Government found that £674 million of contracts were in dispute. However, we also inherited a recommendation from the previous Government that any attempt to reclaim that money should be abandoned. The commissioner’s report set out that £10.9 billion was lost to fraud and error from Covid spending. Failed pandemic-era PPE contracts cost the British taxpayer £1.4 billion and over £1.9 billion of bounce-back loans have been flagged as suspected fraud to the British Business Bank. The commissioner also found that the previous Government’s over-ordering of PPE and delays in quality-checking meant that £762 million is unlikely to ever be recovered, with substandard PPE gowns, masks and visors remaining uninspected for up to two years, preventing recovery of public money. Covid fraud and corruption is an appalling financial scandal which has cost UK taxpayers dearly. The noble Baroness asks for a commitment that we will do better next time; I think we could hardly do any worse.
Lord Pannick (CB)
My Lords, can the Minister say how much of the billions of pounds of public money which was wasted due to fraud and corruption in relation to Covid has now been recovered?
Lord Livermore (Lab)
As I said in my previous answer, the estimated level of fraud and error stands at £10.9 billion. Some £1.6 billion has so far been recovered and a further £1.5 billion is in the act of being repaid. The Public Authorities (Fraud, Error and Recovery) Act has extended the limitation period for Covid cases by a further six years, giving us longer to recover the outstanding amounts.
Lord Anderson of Swansea (Lab)
Does my noble friend not find it somewhat surprising that no Back-Bench Member of the Opposition thought it worth while intervening on a matter which affects one of their own?
Lord Livermore (Lab)
Obviously, whether they choose to intervene or not is a matter for them.
Lord Spellar (Lab)
My Lords, does my noble friend the Minister find slightly odd the intervention from the Opposition Front Bench? Surely if we are to send a message for future contracts, dealing with fraud in previous contracts is essential, otherwise people will think they can get away with it. Why does he think that the Opposition spokesperson was so keen to brush this under the carpet?
Lord Livermore (Lab)
I completely agree with my noble friend. It is vital that we deal with past instances of fraud. As he said, that must act as a deterrent to future acts of fraud. We will continue to pursue these fraudsters and ensure that we get as much money back as we possibly can.
Food Security
(1 day, 4 hours ago)
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Baroness Carberry of Muswell Hill
To ask His Majesty’s Government what assessment they have made of the current condition of UK food security.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, the UK has a secure and resilient food system, built on strong domestic production and diverse trade relationships that provide a stable supply and safe food despite recent global crises. Defra lays the UK Food Security Report in Parliament every three years, providing a comprehensive assessment of all aspects of food security. The next report will be released in 2027. In the intervening years, a shorter UK Food Security Digest is published.
Baroness Carberry of Muswell Hill (Lab)
I thank my noble friend for that reply, and I congratulate the Government on today’s publication of the farming road map, with its recognition that the UK’s food system is vulnerable. Food manufacturing is a vital contributor, among several others, to the UK’s food resilience. It is the biggest manufacturing sector by turnover and supports almost half a million jobs in our economy. Will the Government therefore consider treating food manufacturing as a strategically important sector, with the associated support that that would bring?
Lord Katz (Lab)
My noble friend is of course entirely correct to underline the importance of the food manufacturing sector and the fact that the Government’s new farming road map recognises it as an important part of the food supply chain. We are supporting food manufacturers with export support, innovation funding and growth programmes; we are working with industry to address barriers such as regulation and labour shortages; and we are strengthening supply chain resilience by monitoring risks and improving preparedness for shocks, and considering targeted interventions where appropriate.
We are driving growth and innovation by funding research and development, including £25 million from Defra and nearly £50 million from UK Research and Innovation. Alongside this, we are working across government to improve market access for UK food and drink exports, to support healthier and more sustainable products and to provide the long-term stability that businesses need to invest. Taken together, these actions are helping to build a more productive, resilient and competitive UK food sector, supporting jobs, growth and food security.
Lord Gardiner of Kimble (Con)
My Lords, it was your Lordships’ House that agreed that, instead of five years, as was in the Agriculture Bill, we should consider these matters every three years. It is very important for His Majesty’s Government to keep this under review, because we are in an even more volatile situation: I ask the Minister to comment on that. It is also fair to say that I know no farmer who feels in a confident position. We should be ensuring that British food production is put at a much higher priority as a matter of national resilience, as we have seen increasing volatility across the world.
Lord Katz (Lab)
The noble Lord of course has a great deal of experience in this. On his first question around the frequency of the report, he will know that it is a huge undertaking. It takes over a year to produce and usually weighs in at well over 300 pages, covering five themes, from global availability to household access to food security. The annual digest is shorter and more focused, which, as he commented, focuses on more material factors and recent changes in food supply.
When it comes to wider government support for farmers and the agricultural sector, the Government have allocated a record £11.8 billion to sustainable farming and food production over the Parliament, and the food sector is one of the UK’s 13 critical national infrastructure sectors. That tells the whole House how seriously we take it.
Baroness Grender (LD)
My Lords, does the Minister agree that the real test of this policy and the new farming road map is whether it leaves the poorest households better protected against disruption to food supply and prices? Given that the poorest fifth of households would need to spend 70% of their disposable income for the Government’s version of a healthy diet, what assessment have the Government made of the urgent need right now for the affordability of healthy food?
Lord Katz (Lab)
The noble Baroness will be aware that UK annual food price inflation in the current month, June 2026, was 2.2%, which is lower than overall inflation for the first time since January last year. Historically, of course, our food has been more affordable than the EU average. But she is right to stress the importance of affordability; that is why the Government are providing targeted support to help households manage food costs in a number of different ways. First, we have extended free school meals to 500,000 extra pupils, which will save up to £500 per child per year. The Chancellor of the Exchequer also recently announced targeted tariff cuts on over 100 everyday food items as part of the Great British Summer Savings scheme, which, it is estimated, will save more than £150 million per year.
Baroness Batters (CB)
I start by thanking the Minister for publishing the farming road map and for responding to my review on farm profitability. It was a stark fact, leading the review, that over 50% of all farms in England remain unprofitable and below the level of median household earnings. Given that, in the last Parliament, there were legislated targets put in place for the environment, is it not time that we had annual reporting on our food security and targets set to make sure we are not lowering our self-sufficiency?
Lord Katz (Lab)
I begin by thanking the noble Baroness, Lady Batters, for all her hard work on the profitability review. The Government have responded to a number of her recommendations, including ensuring that the new round of funding for the SFI opens up with a focus on active farmers, rather than just landowners. As she will know, through the Farming and Food Partnership Board, we are focusing on sector growth plans, with an initial focus on the sectors that need boosts, help and support the most, including horticulture and poultry, as well as focusing on a workforce strategy. However, I heard what she said about the targets. There is a lot of detail in the new farming road map. The Government are of course always open to listening to these ideas.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate the noble Baroness, Lady Batters, on her report, which has been a fantastic contribution to this area. I say to the Minister that the Government should revisit the clean energy proposals to take 10% of the most productive farmland out of food production and make sure that it remains in food production for food security purposes—which is, after all, national security.
Lord Katz (Lab)
I point out to the noble Baroness that, even in the most ambitious scenarios under the Government’s solar road map, only 0.4% of total UK land and up to 0.6% of total agricultural land is expected to be occupied by solar farms. Indeed, the changes that we made to the National Planning Policy Framework strengthened the ability of food businesses to grow and improve the productive use of their land. I gently say that there is a way that we can balance both clean energy generation and a growing and profitable farming sector.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, as a former Economy Minister in Northern Ireland, I know too well the importance of the agri-food sector to Northern Ireland. It is a key economic driver. We have a population of just 1.9 million, but we provide almost £10 billion-worth of food across the UK. Given that, do His Majesty’s Government accept that Northern Ireland is a very strategic part of the food supply for the United Kingdom?
Lord Katz (Lab)
Absolutely. We celebrate and enjoy the contribution that Northern Ireland makes to the agri-food sector. It is an important part of our UK economy.
Lord Winston (Lab)
My Lords, as my noble friend the Minister knows, there were some concerns from many scientists about the precision breeding Bill. I wonder whether he might be able to give us an update on what is currently happening with regard to the modification of crops and animals in our food security.
Lord Katz (Lab)
I do not have an update to hand on the follow-up from the precision breeding Bill, so it will probably be best, in the interest of time, if I undertake to write to my noble friend with some more detail.
Lord Roborough (Con)
My Lords, I refer the House to my registered interests as a farmer and landowner. Farming in England is struggling, with globally high employment and environmental costs, while selling at prices set in international commodity markets by lower-cost regions of the world. Despite the dedication of our farmers, that threatens our food security. How will the Minister ensure that farmers are adequately rewarded for the ecosystem services they supply alongside food, beyond the low-margin ELMS payments?
Lord Katz (Lab)
The ELM scheme, which is backed by nearly £12 billion, is already delivering sustainable and profitable farming approaches. We need to work on this and develop this more. We have strong food security. We do not take anything for granted and we will continue to work across the supply chain and with partners to maintain and enhance it.
Construction Sector: Skills Shortage
(1 day, 4 hours ago)
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Lord Allen of Kensington
To ask His Majesty’s Government what steps they are taking to address the skills shortage in the construction sector and to ensure a steady future supply of skilled workers.
The Minister of State, Department for Education and Department for Work and Pensions (Baroness Smith of Malvern) (Lab)
My Lords, in 2025, the Government announced a £625 million investment to train up to 60,000 more skilled workers in construction. This includes £100 million for skills bootcamps, £98 million for industry placements, £100 million to establish 10 construction technical excellence colleges, a £90 million uplift for 16-19 courses and £75 million for adult retraining. Construction will also benefit from new foundation apprenticeships, with employers receiving up to £2,000 for each apprentice they take on and retain in the industry.
Lord Allen of Kensington (Lab)
My Lords, I declare an interest as chairman of Balfour Beatty Plc. I welcome the steps that my noble friend the Minister outlined. Attitudes to the sector are outdated and sometimes ill informed. Attitudes toward careers in construction and infrastructure are contributing to the reduced pipeline of people coming into the sector. Almost half—47%—of young people report that construction and infrastructure careers are not even mentioned in their school’s career advice. I started life in the steel industry in Scotland as an apprentice, and I am proud to say that. What steps are being taken to ensure that career guidance in schools accurately and positively represents the significant opportunities in this important sector for Britain?
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right. There are well-paid, secure jobs in the construction industry. One of the benefits of my role is that I quite often get the chance to meet young people who have made that decision. We need to make sure that that message gets through in the improved careers education that we are providing in schools. Also, as part of the construction support package, we are delivering targeted communications to raise awareness of those construction careers and promote the sector as a pathway to good jobs and progression. That will increasingly focus on young people, alongside tailored promotion for women and for those returning to work, in order to spread more widely the message that my noble friend has ably communicated.
Lord Mohammed of Tinsley (LD)
My Lords, I welcome the Government’s announcements about apprenticeships, particularly in the construction industry. Given that small and medium-sized businesses deliver the bulk of the construction infrastructure, particularly housebuilding, in the country, what support are the Government going to give to those smaller-sized construction firms that we dearly need across the country? These small business are often the ones that find government red tape the most difficult when it comes to apprenticeships.
Baroness Smith of Malvern (Lab)
The noble Lord is right. What is more, of course, small businesses are often the businesses that offer apprenticeships to young people and to people from disadvantaged backgrounds. That is why Skills England is focused on engaging with small businesses to help them understand the range of opportunities there. It is why we are introducing a new apprenticeship hiring payment of £2,000 for small businesses that take on 16 to 24 year-old apprentices. It is why, from August this year, we will also fully fund apprenticeship training for small businesses for eligible people aged 16 to 24. It is why no employer is required to pay employer national insurance contributions for employees under 21 or apprentices under 25, and it is why the Construction Industry Training Board’s new entrant support team is working to provide practical support to employers, particularly SMEs, who are recruiting apprentices.
Lord McLoughlin (Con)
My Lords, what role will the Government take in directing the infrastructure projects that they are responsible for to ensure that the companies participating in those projects take enough apprenticeships and give the proper training via the longer opportunities which those companies can naturally provide?
Baroness Smith of Malvern (Lab)
The noble Lord makes a really important point about the power of government procurement. Many of those contracts already require support for training, and particularly apprenticeships. For example, in the estates strategy in the Department for Education, we expect, if I remember rightly, 8,000 additional training places to be provided as a result of the investment that we are putting into maintaining and rebuilding schools.
Baroness Winterton of Doncaster (Lab)
My Lords, does my noble friend the Minister agree that, as well as looking at national infrastructure, it is important to get companies involved locally through organisations such as UTCs, as in Doncaster, where they have been very effective by not only having career guidance but putting on courses that are relevant to the local area? Combined with that, could more be done through local procurement, with local authorities, for example, requiring more apprentices to be employed?
Baroness Smith of Malvern (Lab)
My noble friend makes a really important point. It is why local skills improvement plans, of which the second round are due to be published quite soon, identify where there are local skills needs that need to be met locally, and why UTCs, as she identified, and the strong partnerships that construction and technical excellence colleges are developing between colleges and employers locally are really important ways of reflecting the local need for construction skills into the provision of training opportunities for young people.
Lord Londesborough (CB)
My Lords, the construction sector is suffering from an acutely ageing workforce, with 35% over the age of 50. This means that 750,000 workers will retire over the next 10 years. At the other end of the spectrum, numbers of apprenticeships are falling, with more than half of those taking them dropping out before they complete their training. What can be done to attract more young people and, in particular, improve apprenticeship outcomes?
Baroness Smith of Malvern (Lab)
We have a target to increase by 50,000 the number of young people starting apprenticeships, after 10 years in which that number fell by 40%. That is the reason behind some of the support that I have identified, including full funding for small businesses, the hiring incentive for businesses taking young people into apprenticeships, the support being provided through colleges and the increased recruitment of people who have had experience within the industry into our colleges, to ensure that young people get the best and most up-to-date information about those training opportunities. All those things are part of the construction skills package that we have focused considerable investment on, as I have demonstrated.
The Senior Deputy Speaker (Lord Ponsonby of Shulbrede)
My Lords, the noble Lord, Lord Campbell-Savours, is taking part remotely. I invite the noble Lord to speak.
Lord Campbell-Savours (Lab) [V]
My Lords, with the increased use of solar technology in construction and with the drop-out among construction and engineering students due to the emphasis on academic skills, could we promote two separate initiatives? The first, as a priority, is viring students into solar-related trades. The second is promoting the use of specialised solar engineers from abroad to train others and clear any backlog that develops in solar fitting programmes. We need to unleash the non-academic but inventive skill set that often lies behind Britain’s successes.
Baroness Smith of Malvern (Lab)
My noble friend is right about some of the new areas within construction where we need to support training. I am sure he will be pleased to know that one of the new apprenticeship units that we launched in April, where employers can use their growth and skills levy to fund something other than a full apprenticeship, includes one in solar PV installation. That is an example of how the Government are recognising the changing challenges in construction and supporting it through the growth and skills levy.
Baroness Stedman-Scott (Con)
My Lords, given the Government’s ambition to build 1.5 million homes and our reliance on a strong construction sector for economic growth, what specific steps are being taken to ensure that a larger proportion of pupils take design and technology GCSE and similar qualifications with strong, relevant, practical content to help increase their interest in following construction pathways in post-16 education?
Baroness Smith of Malvern (Lab)
The noble Baroness makes an important point about how the curriculum overly narrowed during recent years. That was the reason for the Government’s Curriculum and Assessment Review and the widening accountability measures of those qualifications that will be recognised. This will lead to more young people being able to take those types of qualifications, as will the investment that is going into colleges—particularly in high-cost courses such as construction—and the efforts that we are making and funding to get more teachers into colleges to provide the highest quality construction qualifications.
Immigration and Asylum: Appeals
(1 day, 4 hours ago)
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Lord Davies of Gower
To ask His Majesty’s Government what assessment they have made of the impact of replacing immigration judges with adjudicators on the consistency of asylum appeal decisions; what qualifications, if any, adjudicators will be required to have; and what safeguards and accountability mechanisms will be put in place to ensure public confidence in the new Independent Immigration Appeals Authority.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I am grateful to the noble Lord for his Question. In the Government’s Restoring Order and Control Command Paper, which was published on 17 November 2025, we announced systemic reforms to the appeals system. The Government have provided additional funding to the First-tier Tribunal Immigration and Asylum Chamber to increase capacity, and we remain grateful for the ongoing efforts by the tribunal to clear its backlog. However, its current backlog stands at 151,767, with appeals taking, on average, 61 weeks to resolve across all case types, as of March 2026. The Government will shortly bring forward legislation that will underpin the new independent immigration appeals authority. The new authority will be able to determine appeals in a way that provides justice to appellants, with suitably qualified adjudicators independent of the Executive. Further details of the independent immigration appeals authority will be set out in the near future, including the measures that will be put in place to ensure public confidence in the new authority, as the noble Lord requests.
Lord Davies of Gower (Con)
I am grateful to the Minister for his Answer. What steps will the Government take, through the recruitment and vetting process, to ensure that adjudicators are genuinely independent and impartial, and to guard against the new authority becoming dominated by individuals who have publicly campaigned in favour of open borders or who have otherwise taken partisan positions on immigration policy?
Lord Hanson of Flint (Lab)
I remind the House that the backlog stands at over 151,000, but that that has not happened in just the last two years. It is the result of 14 years of individuals not being processed, dealt with or sorted by the noble Lord and his party. To answer his question, as of now, we will ensure that individuals are vetted, that there are strong safeguards in place to ensure high standards, and that those making decisions in the independent appeals authority will be entirely independent of the Executive. He will not have to wait too long because, tomorrow, on 30 June, we will publish a Bill setting out the matters that were trailed in the immigration White Paper in November. The noble Lord’s party will have the opportunity to test that Bill through both Houses of Parliament, and I assure him that that independence is critical and will be maintained.
Baroness Deech (CB)
My Lords, there is currently an issue with immigration tribunal judges that will be exacerbated, especially when it comes to public confidence, in that the tribunal judges, and no doubt the adjudicators, are not declaring their interests. We, as parliamentarians, have to declare our financial interests and memberships. It is high time that tribunal judges and adjudicators are made to list their financial interests and any controversial, or even uncontroversial, organisations that they have joined; this would fit within the judicial conduct guidance. At the moment, we do not know whether those judges should be recusing themselves and what interests they have, because they are not declared and they should be on a register, in the same way that ours are.
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness for raising that point. If she will allow me, can I reflect on it? The issue is self-evidently important, but I cannot answer her question right now. I will make sure that the appropriate policy Ministers in the Home Office and the Ministry of Justice examine those issues in detail.
However, I can tell the noble Baroness that we are doing this because the demand for adjudications is far outstripping what we can currently offer. We have around 26,000 additional funded places for sittings this year, so the backlog of over 151,000, which I mentioned earlier, is simply unsustainable. We have to take action on that. The backlog has not just appeared from nowhere; it has appeared through the inaction of the previous Government. We are committed to restoring it and that is what the Bill to be produced tomorrow will begin the process of doing.
Lord German (LD)
My Lords, following the last question, I declare my interest: I am supported by the RAMP Project. Can the Minister tell us whether the adjudicators will need to possess specific legal qualifications or accreditation in asylum and human rights law? On the process of getting the adjudicators in place, how long will the training programme take?
Lord Hanson of Flint (Lab)
We are moving at quite a pace. The Bill that establishes the new authority will be published tomorrow and has to make its way through both Houses of Parliament. The principle behind it is that there will be a body that is fully independent of the Government and staffed by professional trained adjudicators, with safeguards to ensure high standards, so that appellants are able to receive impartial and independent redress, as is required under our obligations. We intend still to meet our international obligations as part of this change, which I hope will give comfort to the noble Lord. He will have an opportunity to see the Bill when it is published tomorrow. At some point, this House will have the opportunity to examine it in detail. For the moment, I suggest that he waits for the Bill to be published.
Baroness Chakrabarti (Lab)
My Lords, I remind the House that there are lawyers on all sides of the House who have spoken on all kinds of immigration measures. Nobody impugns their ability to continue to give legal advice or, indeed, sometimes to sit in judicial office. I agree with my noble friend that there is a crucial need to deal with the backlog. Can he say a little more about the legal qualifications for the new independent adjudicators? That is more important than whether they were once a member of Amnesty International—which, by the way, is a good thing to be.
Lord Hanson of Flint (Lab)
The Bill will be published tomorrow and will establish the framework for the body and examine in detail the issues my noble friend has raised. My right honourable friend who is dealing with these matters is cognisant of the fact that the independent body will be responsible for monitoring qualifications and standards. I am happy to answer questions on that once the Bill has been published. I am not in the position today to be able to do that.
Lord Harper (Con)
My Lords, I accept that the Minister is a little frustrated, but this is what happens when you trail things in the media ahead of a Bill being published. He cannot expect people not to have questions. If he does not want questions in advance, he should not do the trailing. In the trailing in the media, it was said that the body the Government are looking to establish will be like the magistracy. The problem in this case is that people often come to asylum decisions with very clear views, either against people claiming asylum or very pro people claiming asylum. If the adjudicators are members of the public, how will the Government guard against them bringing those preconceived ideas to determining these important legal questions?
Lord Hanson of Flint (Lab)
If the noble Lord, as a past Cabinet Minister, has never trailed anything, I trust that he will stand up now and tell me that that is the case. I rest my case. But he raises an important point. The key issue is that all members of the new independent immigration appeals authority will have the required training. Decision-making expertise to make determinations will be part of that process of skills and experience. The body will be established in accordance with the Cabinet Office’s Public Bodies Handbook. We are currently considering accountability and governance structures, including the body’s relationship with Parliament and with the Government. We will safeguard independent decision-making. I return to the trailing: the noble Lord has only 23 hours to wait for the publication of the Bill. I look forward to engaging with him on it in due course.
The Lord Bishop of Manchester
My Lords, picking up on the point about training, can the Minister tell us what support will be available and what training will be offered to the adjudicators around religious literacy? Decisions regarding people’s cases often hinge on claims of religious persecution and involve people who have deeply traumatic pasts. They must, therefore, be well-informed and accurate.
Lord Hanson of Flint (Lab)
It is an extremely important point. It is self-evident that we want the individuals who undertake this very serious role to have the required training and support to do it in an effective way. All members of the new independent immigration appeals authority will have the required decision-making expertise to make determinations on appeal cases through a comprehensive training programme and will possess a range of skills and experience. The organisation of that will be down to the new body. The Bill that we are producing tomorrow will establish that body, which is independent of government. The key point I bring the House back to is that we have a backlog of around 151,000. We currently have capacity for around 26,000 extra sittings that we have put in place. It is not possible to end the backlog without significant changes and that is the purpose of this policy.
Lord Pannick (CB)
My Lords, I quite understand that the Minister cannot give us the details until the Bill is published tomorrow, but he will know that we currently have a body of independent impartial adjudicators who deal with immigration matters. Of course, I understand that we need more of them to deal with the backlog and the delay, but what I do not understand is why, in principle, the Government think that the current arrangements for the appointment of adjudicators are inadequate.
Lord Hanson of Flint (Lab)
I pay tribute to those who are doing this difficult and challenging job. We owe them a debt of support, and this is not critical of the way in which they have approached their role. But given the level of training and support required, and that the time that we can give to get additional judges is not sufficient to be able to meet the objective, we are looking at widening the pool and this is the start of that process. The establishment of the new body will put that revised process in place. We ran a targeted call for evidence from March to May this year and sought input from individuals. We have ensured that the judiciary has been kept fully informed of relevant developments and communications. I am hoping that once the Bill is produced and when it reaches this House—because it will be in the House of Commons first—the noble Lord can put some of those issues to the test.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
It is the turn of the Labour Benches next, then the Conservative Benches.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, as my noble friend knows, in my advancing years I have become more understanding, particularly of those who find themselves, sadly, in opposition. The Front-Bencher opposite clearly got up early this morning to put in this PNQ so that he could have a go and attack the Government. Can my noble friend say what positive proposals the Opposition have put forward for reducing the huge backlog that they created?
Lord Hanson of Flint (Lab)
I try to be fair when dealing with the Opposition—if possible. In the years up to the general election in 2024, they suppressed the number of activities taking place in this field, they reduced the number of appeals being brought forward, they took action which did not address the backlog, and every action they took created a further backlog, so the 151,000-plus backlog that we have now is entirely the responsibility of the previous Government, including, potentially, the next speaker, who was a Minister in the Home Office. I presume that when he stands up, his first question will be: how do I apologise for the backlog?
Lord Murray of Blidworth (Con)
We have a backlog of 151,000 cases. Will the Minister tell us whether it is the plan to transfer the backlog from the First-tier Tribunal Immigration and Asylum Chamber to the new independent authority that is being set up under the Bill? If it is not the proposal to transfer the backlog to the new authority, on the current rate of case resolution, the First-tier Tribunal will still be hearing cases into the 2040s.
Lord Hanson of Flint (Lab)
The noble Lord has detailed knowledge of this matter because he was responsible for the policies that led to the backlog in the first place. The Bill tomorrow will establish a new body. We are looking at how we merge the new body. There will be a parallel operation for some considerable time, but the purpose of the Bill that will be published tomorrow is to establish a new framework to ensure that the backlog built up when he was a Minister is eradicated. That is the policy objective of the Government.
Baroness Butler-Sloss (CB)
If I may add to the questions on training, will the new people working have some training on genuine cases of modern slavery and human trafficking?
Lord Hanson of Flint (Lab)
Again, self-evidently, it is important that individuals who make determinations about life-changing matters have the support to understand the reasons why those decisions have to be taken, and the mechanisms of training and support that are required to do that. The noble and learned Baroness raises important points about modern slavery and our international obligations. That is for the Government to determine. I am in the difficult position of not having the Bill until tomorrow, but within it the opportunity for the successor body to develop the types of policies that she has mentioned is one that I would wish to see and encourage.
Business of the House
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, I thought it would be helpful if I updated the House on the plan for the consideration of the National Security (State Threats) Bill tomorrow. I will email all noble Lords with this information shortly to save a rush to write it down, and to help colleagues not currently present in the Chamber.
Committee and all remaining stages will take place tomorrow. A Marshalled List has been issued and the Whips’ Office is preparing groupings today in the usual way. Committee will take place as normal, with debates on groups of amendments. However, given that the Bill has been fast-tracked, the usual channels have agreed that issues should be resolved in Committee and that Report could potentially be taken formally. This means that, if noble Lords feel that they need to press amendments, Divisions should take place in Committee. I know the Minister has been engaging positively across the House to address concerns.
If the Bill is unamended in Committee, we will proceed to a formal Report stage and Third Reading. After that, we will debate the statutory instrument and the associated Motion on the Order Paper before taking a Statement on steel trade measures as the last business.
If the Bill is amended, it will need to be reprinted and prepared for Report. Once the Bill is reprinted and in the Printed Paper Office, there will be a 30-minute window for noble Lords to table amendments for Report, which I expect to be debated in one group. I will make a further announcement tomorrow, and the today’s list document will be reissued and precise deadlines will be advertised on the annunciator. Given the time needed for reprinting the Bill, the tabling windows and the other preparations, the SI and the Statement would need to be taken after Committee and before the remaining stages, but hopefully no amendments will be tabled before Report and it will be taken formally.
My noble friend Lord Hanson of Flint remains happy to discuss the details of the Bill ahead of tomorrow’s debates, and noble Lords should find that useful.
Planning and Infrastructure Act 2025 (Consequential Amendments) Regulations 2026
(1 day, 4 hours ago)
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Baroness Taylor of Stevenage
That the draft Regulations and Order laid before the House on 27 April and 14 May be approved.
Considered in Grand Committee on 23 June.
Nuclear Safeguards (EU Exit and Fees) (Amendment) Regulations 2026
(1 day, 4 hours ago)
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Baroness Wheeler
That the draft Regulations laid before the House on 23 April be approved.
Considered in Grand Committee on 23 June.
Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Wheeler) (Lab)
My Lords, on behalf of my noble friend Lord Vallance, I beg to move the Motion standing in his name on the Order Paper.
Media Green Paper
(1 day, 4 hours ago)
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Lord Parkinson of Whitley Bay (Con)
My Lords, there is much to be commended in the Green Paper, not least adding on-demand rights to the listed events regime which we have been discussing in the Sporting Events Bill. As the Government recognise, some of the questions in there are thorny ones which will need careful consideration, not least how we ensure greater prominence for trusted news sources in our increasingly crowded media environment.
When this Urgent Question was taken in another place last week, one of the Labour members of the Culture, Media and Sport Committee urged the Secretary of State to consider “reining in GB News”—a question that the Secretary of State rather sidestepped. Can the Minister provide a bit more reassurance that that is not the Government’s direction of travel? Do the Government consider GB News a trusted news source?
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
The noble Lord makes an interesting point. The whole idea of prominence is to ensure that people know the difference between trusted sources of news and opinion, and that is where the prominence issue comes in by looking at ways we can make sure that such sites come further up in the searches that people make. On the specific question, I would say it would depend whether the item on a particular news programme was opinion purporting to be fact or more factual.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, we welcome the Green Paper, which rightly recognises the severe financial challenges facing our PSBs, vividly exposed by the recent devastating cuts at the BBC. We have long proposed on these Benches that the BBC World Service should be fully funded directly from an FCDO budget, freeing up millions of pounds per year. The World Service is so important both for underpinning soft power and for the security implications of guaranteeing a source of trusted news in a polarised world. Will the Minister take this on board and tell us what conversations her department is having with the Foreign Office on this really important matter?
Baroness Twycross (Lab)
One of the real strengths of the BBC is that it is such a trusted source of news, and that is behind a lot of the issues within this. On the ongoing discussions with the FCDO, I am happy to meet the noble Baroness to discuss that. As she is aware, another Minister in the department deals with this. The Secretary of State has referred to the BBC’s overseas coverage as
“a light on the hill”,—[Official Report, Commons, 16/4/26; col. 992.]
and somewhere that people go to, so we do recognise the real importance of the World Service.
Lord Birt (CB)
My Lords, I too welcome the Green Paper because, frankly, Rome is burning. Two of the UK’s greatest, most respected and historic achievements are threatened by the globalisation of media—a lively, challenging and diverse press, which we have had for centuries, and an unmatched tradition of public service broadcasting, encompassed by Channel 4 and ITV, as well as the BBC, which we have had for almost a century. For over a century, through those means, we have created a very effective national debating chamber and brilliantly captured our national culture, talent and capability. Does the Minister accept that radical measures will be needed to arrest these trends?
Baroness Twycross (Lab)
The Government are fully behind the BBC, both at the present time and as a future source of trusted news and content. Through the charter review process, a lot of these conversations are happening and we are looking in particular at how we can ensure that the funding model is sustainable while being fair and affordable for households. We are clear that,, if we can get sustainable funding and make sure that we get the prominence regime on the internet as well as on television screens, then we should go a long way to ensuring a strong future for our press and media. I would probably draw back a little from saying Rome is burning. There is so much good practice out there that we should celebrate, but I appreciate that we need to see the warning signs of what might come down the road, which is where the paper comes from.
Baroness Armstrong of Hill Top (Lab)
My Lords, the Green Paper is really welcome. If this is got right, then digital switchover will mean many more people in this country will get sufficient media and digital understanding to be able to use what they need to improve their lives, so this is much bigger than many people have been thinking. I welcome that and hope that the department will fully involve those who are really concerned about digital inclusion in the consultation so that we get it right for everyone.
Baroness Twycross (Lab)
The intention is to make sure we get it right for everyone. If people have not read the Green Paper, it is worth the read; I thought it was a really interesting document. A striking point made in the paper is about information being part of public infrastructure, and recognising that is critical. In terms of the switchover from digital terrestrial television to the internet provision, there is a question about whether that should be in 2034 or in the decade afterwords. It is not just critical for people and their news; it is also about how people get jobs and apply for pretty much anything. The world is now online, and we need to do what we can to make sure we listen to those people as part of this process.
The Archbishop of York
My Lords, none of us underestimates how hard it will be to preserve and protect the place of what we must now call public service media in this new world, but I would contend that it is impossible to understand our world at the moment if we do not understand the place of faith in the affairs of the world. It is impossible to understand our own nation’s culture, literature and law without understanding the place of faith; I do not think we can understand ourselves without it. But I notice that, in the Green Paper, there is little or perhaps no mention of the place of faith, which has always been such an important part of the public service broadcasting economy. I wonder whether the Minister would like to mention—I know how difficult it is—what steps are being taken to make sure this is preserved.
Baroness Twycross (Lab)
I will feed the right reverend Prelate’s point back. I think it is a really interesting point. I know that having knowledge of the Bible and Bible stories meant that I was much better equipped to understand literature. I think there is that cultural aspect, as well as the faith aspect, to it. The main thrust of the paper was around making sure nobody was left behind in the move towards digital, but I will feed those points back.
Baroness Stowell of Beeston (Con)
My Lords, a trusted source of news that everyone can rely on is good for society, but we should not kid ourselves that that is what currently exists. Levels of trust in the BBC and other mainstream broadcasters are not universal across all demographic groups. The cause of that is the failings of the broadcasters and that is what pushes these people in search of other sources of information—not all of which is bad, I must add. Before any decision is made on giving greater prominence to broadcasters, will the Minister require them, especially the BBC, to publish a breakdown of their audience trust scores by demographic group, using a modern model, such as that deployed by More in Common or Yonder, that goes deeper than just age and socioeconomic groups? Will she demand from the BBC especially that, for any prominence to be awarded, it must first improve its performance among those groups?
Baroness Twycross (Lab)
The noble Baroness makes a really interesting point. I hope the noble Baroness will take part in the consultation, but I will feed that back. We are clear that a free and fair media is essential to our democracy; part of that is people actually accessing information, and that trust piece has to go beyond just the surface level. I will feed the points back.
Lord Young of Acton (Con)
My Lords, the Green Paper does not simply propose that the prominence regime be confined to public service media, including public broadcasters; it suggests that it should also be extended to news publishers. Therefore, if some news publishers are going to be included in the prominence regime and given various privileges, and social media companies will have to promote the content of those news publishers, how are those news publishers going to be selected? Can the Minister assure the House that this is not a Trojan horse for forcing some news publishers to bend the knee to a state-approved press regulator, such as Impress?
Baroness Twycross (Lab)
This is entirely why we have a consultation period that runs to 31 August. As part of the consultation, we will work and engage with relevant parties to determine the criteria that we use. We will decide the criteria for a trustworthy news provider in an open and transparent manner. On protecting media freedom, this is not about censorship or people having to take a different view; this is about making sure that the general public—and we as the part of the general public with a particular interest in news—can understand what is more likely to be high-quality content, and ensuring that that comes further up the search mechanisms.
Nottingham Maternity and Neonatal Services
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Lord Kamall (Con)
My Lords, I thank the Minister for the opportunity to ask questions on this Statement on the report, which raises many troubling issues. I add my thanks to Donna Ockenden and her team for their extraordinary work in conducting what has been the largest review of maternity services in the history of our NHS. Our thoughts are with the thousands of mothers, babies, fathers, partners and families whose experience lies behind this report. It is only because of their courage and determination that these failures have finally been brought to light.
When, in the past, I have spoken to families who feel that they have lost a relative or friend due to medical negligence, they often say to me that they are reluctant to pursue justice, since it adds to their grief. They also point out that they often face hostility for raising concerns, as they are seen to be criticising the NHS. This is a terrible indictment. No organisation, including the NHS—perhaps especially the NHS—should be above criticism. The findings expose years of failures in leadership, governance and culture, not just a few isolated cases of clinical failure. Women were not listened to, families were dismissed, and staff were unable to raise concerns in an environment where bullying and intimidation were embedded. Most disturbing of all, the report noted that evidence of these failings already existed, yet action was repeatedly delayed or avoided.
However, we on these Benches wish to be constructive in our response, since maternity safety has challenged Governments of all political persuasions. Will the Government and the healthcare system introduce measures that genuinely improve safety and strengthen accountability, and will they listen to women and families? If so, they will have our support. But the real test will be whether the report leads to meaningful and lasting change across every maternity service in England, because, regrettably, many of the report’s conclusions are not new. Previous inquiries in Morecambe Bay, Shrewsbury, Telford and East Kent identified many of the same underlying themes: women not being listened to, poor communication, inadequate staffing and weak governance. This report must become the point at which recommendations are accepted and demonstrably delivered.
I have four questions for the Minister. First, can she outline whether the national implementation plan will include clear milestones and regular public reporting, so that Parliament, families and clinicians can judge whether progress is being made? Secondly, how will boards be held accountable for creating an environment and a culture in which openness and patient safety genuinely come first? Thirdly, what steps are the Government taking to ensure that maternity services have the workforce training and leadership they need to provide safe care? I understand that the former Secretary of State felt that there should be more of a focus on technology than recruitment. That is not necessarily a bad thing, but can the Minister explain how this would work in maternity care?
I also welcome the Government’s recognition of the distressing findings on mortuary services. The treatment described in the report represents a lack of dignity and compassion towards bereaved families. The actions announced are important and I look forward to the Minister reassuring the House that the lessons from these failings will be embedded across the NHS and not just confined to Nottingham.
Fourthly, the Minister will be aware that Henrietta Hughes, the Patient Safety Commissioner, is increasingly frustrated that, having proposed a system for redress and compensation for those poor victims of valproate and pelvic mesh, there has still been no movement from the Government. Can the Minister update us on that?
No woman’s experience of pregnancy or childbirth should be determined by their ethnicity, background, language or confidence in navigating the healthcare system. This report highlights clear disparities. The evidence of racism and discrimination identified in the review is deeply concerning and underlines the importance of ensuring that every woman receives safe, personalised and compassionate care. This is not asking for special treatment for anyone; it is about making sure that patients of all backgrounds are treated equally.
Trust in our maternity services will not be rebuilt through apologies alone. It will be rebuilt when women know that they will be listened to, when families see concerns acted upon rather than dismissed, when staff are empowered to speak up without fear, when boards are judged by the safety they deliver and when Parliament sees clear evidence that today’s commitments have become tomorrow’s reality.
The families of Nottingham and other maternity scandals have carried this burden for far too long. They should never have had to fight so hard simply to be heard over many years. They now deserve our determination that this report marks a genuine turning point, and, if the Government achieve that, they will have the support of all Benches. I look forward to the Minister’s response.
Baroness Pidgeon (LD)
My Lords, the Statement before us today from the Secretary of State in the other place is distressing reading, as is the report by Donna Ockenden. This review shocks us all to the core and must shake the Government into real action at every level of our health service and its regulation. Staff concerns were dismissed, a board did nothing and regulators failed in their duties. There was a simple refusal to listen to women and their families, causing such loss, trauma, negligence and damage, alongside bullying, organisational failures and the horrendous misplacing of bodies. Words just cannot express this horror. What brave and resilient families to keep fighting for justice; I thank them all.
I heard the deeply moving testimony at the press conference last week about the mental health legacy for bereaved parents. One explained how she had lost all trust in the NHS and had the constant, triggering experience of having to engage in her daily life with the organisation she holds responsible for the loss of her baby. It is hard to imagine.
This review, and the upcoming wider review from the noble Baroness, Lady Amos, must draw the line. This has to stop. Mothers, babies, children and families must have confidence that they will be provided with first-class maternity services, wherever they live in our country. There must be quality services that meet their needs whatever their age or background, with respect and dignity at the heart.
I welcome the taskforce, chaired by the Secretary of State. It will be crucial to ensuring the implementation of recommendations at every trust and to ensure that whistleblowing throughout the NHS works. An independent patient voice must remain part of our health service to help hold NHS trusts to account. We will revisit this point with the NHS Bill later this year.
I understand that, in 2018, over 50 members of staff wrote to the chair of Nottingham’s board, stating plainly that there were significant safety concerns. The letter was not even discussed by the board—it went to a sub-committee and was buried. In 2023, the chief executive found that the trust had never formally investigated staff shortages. I cannot get my head around this, as someone who has sat on many different boards over the years. This is not good practice. I therefore ask the Minister what urgent work the Government are undertaking to assess the competence of NHS trust boards. What changes may take place to strengthen them and to ensure that they carry out their serious role and responsibilities thoroughly and robustly?
The Government must also take action to strengthen whistleblowing powers in the NHS. My Liberal Democrat colleagues in the other place have tabled amendments to the Health Bill which would provide new powers for coroners and medical examiners to report suspected health failings. Will the Government look to support those amendments to strengthen whistleblowing in the NHS?
Finally, families need to have confidence in their local maternity services, and those services need to all be at the highest standard. Will the Government commit to a maternity rescue package to deliver this, including one-to-one midwifery care for every woman in labour and consultant obstetricians present 24/7 on every labour ward?
A big step change is needed to transform maternity services across the country that every family and every individual can have confidence in. I look forward to the Minister's response.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, we find ourselves deeply affected, as we have heard from both Front Benches. I am grateful for the tone and for the acknowledgement of the experiences of bereaved and harmed families who are at the absolute centre of this. The noble Baroness, Lady Pidgeon, said that she could not get her head around many of these things; I am sure we are all in agreement on that. I share the views of both Front Benches. I am grateful for the support for action. I absolutely agree with the noble Lord, Lord Kamall, that there is only one test: action. As the noble Baroness, Lady Pidgeon, said, it is also about confidence and step change. We all want to get this right. It is not recent; it is not isolated—as both Front Benches identified. It should not be the case that those who are bereaved and harmed have had to show such courage and determination. This is an impossible circumstance that people are in. The noble Lord, Lord Kamall, said that people understandably often do not wish to add to their distress. The fact is that women, babies and families have all been terribly let down, not as a one-off but by a system—a system that failed to listen, failed to be transparent and, to make it even worse, failed to provide the truth when things went wrong. We are looking at 13 years, since 2012. This is a sustained approach that was totally unacceptable.
On behalf of the Government, I want to say how deeply sorry I am, and the Government are, for what every family has suffered and for those who have been affected. I also want to thank parents and families for their courage and determination for sharing their experiences. Without that, Donna Ockenden and her team—to whom I express great gratitude—could not have done the work that they did. They have been diligent; they have shown compassion and great detail, and it will make a difference.
To the noble Lord, Lord Kamall, I can say that, certainly, the Government are going to deliver a clear and deliverable plan by the end of the year. As the noble Lord and the noble Baroness have asked for, these will indeed be system-wide improvements, so that everyone can have full confidence across maternity and neonatal services—and, yes, it will have milestones and transparency. How will this be done? The noble Baroness, Lady Pidgeon, has spoken about the taskforce. That is important. It is personally chaired by the Secretary of State. There is a very good reason for that—to give the absolute authority of his office. I am the deputy chair of that taskforce. It brings together many groups, including through the expert reference groups, but, crucially, it includes affected families and Michelle Welsh, MP for Sherwood Forrest, who would describe herself as someone who has been harmed in this terrible catalogue of heartbreaking experiences. She is our first appointed maternity adviser to the Secretary of State.
How will we deliver through the taskforce a clear action plan that will make a difference? We will bring together the national recommendations from this review and the independent review from my noble friend Lady Amos, rightly established by the former Secretary of State, which will report this Wednesday. The work will also look at previous reviews. It is right to say that there have been many previous reviews and lessons clearly have not been learned, which is totally unacceptable. It will be our duty to deliver that lasting change through the National Maternity and Neonatal Taskforce.
I have some immediate responses to the points raised by noble Lords on the Front Benches. The Secretary of State announced last week that we are extending Martha’s rule straightaway to all maternity and neonatal services. That means that every parent or caring person supporting a birth can request a rapid review from an independent medical team if the condition of a baby or mother is deteriorating and they are concerned that it is not being responded to. This is a very important step on the point of real listening.
I was also absolutely shocked to read the findings on mortuaries. They are chilling and deeply distressing. It is hard to believe that these things could ever be allowed to happen. There is a live police investigation, and two people have recently been arrested—noble Lords will appreciate that I cannot say more. Two immediate actions are also being taken: the Human Tissue Authority is conducting an urgent national review of mortuary incident reporting and NHS England, on instruction from the Secretary of State, is writing to all trusts to ensure that they consider the findings on mortuary care in this report.
I will pick up some of the questions asked by the Front Benches. On the point about boards being accountable for an open culture and patient safety coming first, that is their job. Noble Lords will not be surprised to hear that there has been a change of leadership. This week, the Secretary of State is meeting the chief executive and interim chair to discuss this point. Boards are held accountable to ensure that there is a patient safety culture through strict duties, independent oversight and targeted regulatory assessments. Clearly, this was not the case here and in other areas, but I welcome the change in leadership and their commitment to delivering a change of culture. I am grateful to Donna Ockenden for recognising that there have been improvements, though she is right that more needs to happen. As I said earlier, this is not just one random situation in one area—it goes so much deeper than that.
The noble Lord, Lord Kamall, asked about workforce. One of the recommended actions from the Nottingham report is that a perinatal workforce tool be developed. This will be considered by the taskforce along with all the other recommendations, as we have discussed.
The noble Baroness, Lady Pidgeon, asked about the urgent work to assess the competence of NHS trust boards. For example, the Nottingham trust has a learning and improvement board to oversee the required improvements, chaired by Michelle Welsh MP. It is supported by a family board and a staff board, which is the model we need to see.
On strengthening whistleblowing as part of the taskforce’s work, we will be looking at all parts of the health system when things go wrong, including how accountability is established and, if necessary, strengthened. On a maternity rescue package, continuity of care, referred to by the noble Baroness, Lady Pidgeon, is an action in the report from Nottingham and will be considered closely by the taskforce.
The noble Lord, Lord Kamall, asked about sodium valproate compensation. The Patient Safety Commissioner rightly continues to press on that. I do not have a specific update for the noble Lord; as soon as I do, I will be very glad to write to him.
It is impossible not to be affected by this report, but I consider it a luxury that I am affected in how I feel rather than in what has happened to me. Again, I apologise for myself and on behalf of the Government for the harm, losses and trauma that continue to this day. I commit us to doing all we can to make sure this is not repeated, and I am grateful to have the support of the Front Benches in doing this.
Baroness Chisholm of Owlpen (Non-Afl)
This is the most appalling thing that has happened. I have great respect for the Minister, and I thank her for letting us know about some of the action plans going ahead. What has gone wrong with a profession where the professionals have seemingly no empathy for those they are caring for? Is this about society? Have we given up putting others first? Have we become a society where we do not listen and do not treat each person as an individual with needs individual to them? That is what I was taught when I was given my nursing training. Is that being taught now? Have we forgotten how we behave towards individuals when they are asking for help? Do we not listen and do everything in our power to make them feel better? Government cannot do everything; it has to be society that can, in some way, teach people in these very important roles how they treat the human beings in front of them.
Baroness Merron (Lab)
I certainly agree. Every woman, in the case of maternity services, deserves safe and compassionate maternity care. That is why we are so determined to drive urgent improvements in maternity services. It is worth noting that this review—the largest ever of its kind, as the noble Lord, Lord Kamall, said—considered the experience of more than 2,500 families and 830 staff. I think it is important that your Lordships’ House also remembers how many staff have found themselves in situations they would never have wanted to be in. I am sure that the noble Baroness, like me, pays great tribute to the many NHS staff who are in the majority in doing their work in a compassionate way—as the noble Baroness has experienced.
I cannot comment on whether it is specific to society but, from Donna Ockenden’s conclusions, there was something deeply wrong here. Whether it was not listening, culture or racism and discrimination towards women, families and staff, and between staff, we cannot have it.
Lord Hunt of Kings Heath (Lab)
My Lords, to continue this theme, the report describes a bullying and toxic culture, with junior midwives not being sufficiently supported when dealing with complex cases. It was a culture that did not allow them to refer such cases up the chain. There was a constant turnover in senior midwifery leadership and those they appointed were not given proper induction, mentoring or even guidance about their roles. In the work that the Minister is taking forward with the Secretary of State, will there be a concerted national programme of training and development for senior midwives so that there is a real opportunity to try to grip these issues?
Baroness Merron (Lab)
My noble friend’s analysis is quite right. One of the reasons we are developing an anti-discrimination programme is that cultural change across maternity and neonatal services is much needed. I use that as one example; all NHS trusts are to have completed that programme by 2027, and that is already under way.
I found it absolutely shocking that so many senior people at Nottingham did not give evidence to Donna Ockenden’s investigation. That is why, once the Hillsborough law Bill receives Royal Assent, we will extend the duty of candour to the Leeds and Sussex reviews so that the chair, Donna Ockenden, will have the powers to find the truth from organisations and staff. On the earlier point, it is quite shocking and totally unacceptable that they refused to participate.
Baroness Wheatcroft (CB)
The Ockenden report does a great job in looking at the problems in one specific trust. However, the problems go much deeper, as the Minister has said. It is cultural, and one of the cultural problems appears to be that there is a complete split between a contingent of midwives and the rest of the medical profession about medical intervention. Until that is tackled, I cannot believe that we are going to get to the root of the problem. Will the Minister commit that the taskforce will delve into that difficult issue? It is cultural, but it is a very deep difference of opinion that goes back to the noble Baroness’s question about what has changed. That is part of what has changed.
Baroness Merron (Lab)
The key is to bring together the recommendations from Donna Ockenden’s report with the independent report that we established, chaired by my noble friend Lady Amos, which will report on Wednesday, as well as the reviews from before. I do not think we necessarily need a description of the problem but, to the noble Baroness’s point, we do need action to challenge and monitor this. Transparency and accountability will also be our friends, which in Nottingham they were not.
Baroness Hodgson of Abinger (Con)
My Lords, as we know, this horrific failure is not confined to Nottingham University Hospitals NHS Trust. A number of other NHS trusts are being investigated, and I suspect it goes much further. Neither is this a problem of just the last 13 years; it goes back decades.
Forty years ago, one of my twin sons died at birth, a combination of bad decisions, inadequate systems and negligence. It was similarly impossible to get answers, with the name of the midwife withheld and the notes disappearing, including the only photo, and no one held accountable. The damage to families from this type of behaviour is unquantifiable. How is the Minister going to change this endemic culture of cover-up in the NHS and ensure that systems are put in place so that when even one baby is put at risk, is damaged or dies, the situation is properly examined so that it cannot happen again?
Baroness Merron (Lab)
I am so very sorry to hear of the noble Baroness’s experience; I am grateful to her for sharing it with your Lordships’ House. I am sure we all offer our condolences and understanding as far as we can to support her and her family, and I say how sorry I am for her loss.
The noble Baroness is right to talk about cover-up. That did happen in this case and has also been identified through other reviews. Certainly, as Donna Ockenden conducts reviews into Leeds and Sussex, we will be able to find out what happened there. But we are not waiting, and I assure the noble Baroness of that.
It is worth speaking about the role of the regulators, because it has come up not by using the word itself but by how account is kept. The Secretary of State is meeting with the GMC—which we currently have a three-month consultation on reforming—because he wants to hear its personal account for failings in care. The Nursing and Midwifery Council has been undergoing a widespread programme of reorganisation and change under new leadership, which, again, is much needed. I assure the noble Baroness that, as part of the taskforce, we are looking at all parts of the health system where things go wrong, including how accountability is established, because we should be avoiding that harm where it is avoidable.
Baroness Nargund (Lab)
My Lords, I welcome the report and thank my noble friend the Minister for all the work she is doing with the Secretary of State to support and to implement recommendations. Our thoughts are with the families affected. The report has yet again shown the racial bias in care, which is harming mothers and babies. I request that my noble friend the Minister ensures that cultural competency training is integrated in medical school and in midwives’ training, so that they are qualified after receiving that training and it is not left for later.
Baroness Merron (Lab)
It is absolutely crucial, as my noble friend says, that the training should reflect the needs of the care that will be given. That is something that I know the taskforce will look at very closely. Donna Ockenden’s report offers insight and recommendations on workforce and training. The noble Baroness, Lady Amos, may also do so. I mentioned the anti-discrimination programme, but I should also say, on inequalities, that we have launched a maternal care bundle on what the best practice is for clinical conditions that are the leading causes of death for women from Black and Asian backgrounds. As I say, the numbers reflect a great inequality which cannot be allowed to continue.
Baroness Berridge (Con)
My Lords, building on the Minister’s comments on the maternal care bundle, which was introduced because Black women are 2.3 times more likely to die in childbirth, this report also confirms that, in Nottingham and Nottinghamshire, infant mortality rates were significantly higher for Black and Asian women. In the report, a full dataset is not given of women of ethnicity. Can she also reflect on the recommendations from the Preterm Birth Select Committee report that we need more nuanced recommendations in this regard, and more work on causality? It is not clear, from what I have read in the report, why there is a 2.3 times greater likelihood that these women die; we need more work on that as well.
Baroness Merron (Lab)
The noble Baroness is right to refer to the report undertaken by the Lords committee, which I was pleased to be invited to appear before. It is true that there is a complexity. Outcomes also vary between trusts. There are a lot of potential reasons, but “potential” is not good enough. In 2023, the number of stillbirths in the most deprived areas remained much higher than in the least deprived.
In all the ways that noble Lords, including the noble Baroness, have mentioned, there are deep inequalities. NHS England has published an inequalities dashboard. That is important because it supports the identification of areas where populations face the greatest disparity, so that interventions can be appropriate for them and there can be more equitable support. We will certainly look very carefully at the differences and the inequalities, because that will be a real driver for change.
Lord Roe of West Wickham (Lab)
My Lords, I thank my noble friend the Minister and the Secretary of State for their hard work, shining a light on the inadequacies in maternity services in this country. My question is more general. The Minister referred to the coming Hillsborough law—one would hope in the next Session—which will be vital to accountability and driving candour across reviews into areas of both public and private failure. I respectfully ask, if the Minister cannot update me on progress being made on an oversight mechanism, whether the relevant Cabinet Office Minister might write to me to provide an update on progress. I am afraid that without the addition of an oversight mechanism, whether through a powerful public committee set up within Parliament or an independent body, we will once again return to terrible stories, whether in maternity, construction or other aspects of care.
Baroness Merron (Lab)
I will be pleased to raise that with my ministerial colleague in the Cabinet Office. I agree that an oversight mechanism is very important. On the Bill—which will, of course, become an Act—it is key to note that it will establish a new duty of candour and assistance at inquiries, inquests and other investigations. To the point that we are discussing here, the Bill will also allow for that duty of candour to be applied to health investigations by regulation. That is crucial, and it is by using that power that we will ensure that the Leeds and Sussex reviews, which are live, are included through secondary legislation.
Baroness Manzoor (Con)
My Lords, I align myself with the comments that have been made by the noble Lord, Lord Kamall, and the noble Baroness, Lady Pidgeon. This a totally devastating outcome. I pay tribute to the families that have been affected in this way.
I am just absolutely disturbed by the quality of the governance at the trust. I am shocked. I have chaired a number of trusts. To not put patient safety first and to not have the data available to make that judgment is absolutely appalling. Therefore, in terms of accountability, will the Minister assure me that the chief executive, the chair or, indeed, any members of the board who have been given honours as a result of their service to their trust are stripped of them? It is not an honour; it is absolutely devastating, and there has been a lack of duty in what they have achieved.
Baroness Merron (Lab)
I completely understand the noble Baroness’s point. I am grateful for her sensitivity on this subject. I do not feel qualified to comment on honours and their removal, but I will raise it with the appropriate ministerial colleague to say that this is a view—exactly as the noble Baroness said. I know that she is not alone in feeling that.
Lord Beamish (Lab)
My Lords, this is an appalling case, but some of the themes in it are common to other scandals, including the Post Office scandal: people being ignored, people not knowing how to complain and the system basically coming together to protect itself rather than representing and identifying failings. I accept that the Hillsborough Bill will be a step forward, but we also need a cultural change, and I stress that one of the issues is the GMC. Self-regulation has to go. It is about time that doctors were held to account, because anyone who has tried to complain about a medical situation through the GMC finds that it is labyrinthine and slow, and does not put the patient at the centre.
Baroness Merron (Lab)
My noble friend is right to draw comparisons and, as I said earlier, I certainly agree on the point about culture that is made very clearly in the report from Donna Ockenden. I will be looking very closely at that also in the recommendations of my noble friend Lady Amos. As I said earlier, we have sought to make change. I do also think that accountability and transparency are absolutely key. It is one thing to seek to make change, but another for people to feel confident and to know it has happened.
Baroness Shawcross-Wolfson (Con)
I am grateful to the noble Baroness for her eloquent and moving statement and her commitment to taking action on this. The noble Baroness said that the workforce planning recommendations from the Ockenden review and potentially also from the Amos review will be picked up in the maternity taskforce action plan, due at the end of the year. Can she tell us how that will fit with the upcoming wider NHS 10-year workforce plan? Will the wider 10-year workforce plan also look at the staffing and training needed for safer maternity services, and can she confirm when it will be published?
Baroness Merron (Lab)
We are soon expecting the 10-year workforce plan. In its considerations, it will address patient safety, because that is one of the requirements when thinking about workforce. But the really close look in the way the noble Baroness seeks will be through the plan which the taskforce is overseeing, having received the recommendations. It is the case that maternity services, for a whole range of reasons, including the absolutely shocking experiences that we have all referred to, have suffered in some areas because of a lack of safety, a lack of listening, and the wrong kind of culture and leadership—the list goes on. I know that noble Lords will have looked at the report and I would want to ensure that maternity services have their particular focus, in order that what I believe will be a credible plan by the end of the year will take account of the very points that the noble Baroness rightly makes.
Steel Industry (Nationalisation) Bill
(1 day, 4 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to narrow the definition of a steel undertaking so that it had to be a business consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel.
Lord Sharpe of Epsom (Con)
My Lords, Amendment 1, in my name and that of my noble friend Lord Hunt of Wirral, is very simple. It seeks to confine the powers in this Bill to genuine steel businesses. Those are undertakings consisting predominantly of the manufacture or processing of steel—or iron for the purposes of steel manufacture.
As drafted, the definition catches any business which merely includes steel-making as part of its operations. That is a very broad formulation. It could, in principle, sweep up a diversified business in which steel was only a minor part of what it does. Businesses with a limited connection to steel production should not face uncertainty about whether it falls within the reach of these nationalisation powers.
When this point was pressed in the other place, the Secretary of State was asked whether a business with only 1% of its operations in steel would be caught by Clause 1. He did not say that it would not be. However, a statement of intent is not a limit on the face of the Bill, and future Governments are not bound by the assurances of this one. The Government say that these powers are intended for British Steel, and British Steel is obviously and predominantly a steel business. Therefore, this amendment should create no difficulty for that purpose. If the Government’s intention is genuinely not to use these powers against businesses with only a peripheral connection to steel, they should have no difficulty in accepting this amendment. I beg to move.
Lord Redwood (Con)
My Lords, I fully support this amendment and hope that it will tease out from the Minister a little more about what the underlying purpose of the general legislation is, as I am not too enamoured of this becoming a fully nationalised industry with the ability to acquire all sorts of other steel interests.
I felt that the Government’s policy arose out of the circumstances of British Steel at Scunthorpe and the question of blast furnace-produced steel, where we are down to our last two blast furnaces. I did not think that the intention was to build an electric arc furnace set of businesses when progress has already been made in establishing these in the private sector and where there are plans in certain cases for government grant aid to achieve an electric arc steel additional business by that combination of subsidy assistance and private capital.
I hope that the Government will accept this quite substantial narrowing of such a broad piece of legislation, because there are many with general interests in steel whom we would not like to get caught up in this. I would also like clarification on whether there is any possibility that the Government might want to build a nationalised electric arc steel set of businesses. This would be an expensive and difficult proposition.
Lord Fox (LD)
My Lords, I thank the Minister, his team, the department and the two experts who came all the way from Coventry in 35-degree temperatures to educate the noble Lord, Lord Hampton, and me on the technology of steel. It has been very co-operative and I thank them.
I am slightly confused by how narrowing these words are: “of or including” versus “predominantly”. What is predominantly? Is it 60:40? Is it 55? I do not know. You have to look upon it with the body language of the Government. The Government have shown no tendency to go on a nationalisation rampage through all businesses that have ever touched a piece of steel. It is very clearly focused in one area, as the noble Lord, Lord Redwood, alluded to. Also, I remind noble Lords that there is a sunset clause in here which closes it after two years. So the talk of subsequent Governments does not have particular purchase and I am much more relaxed than the noble Lord, Lord Sharpe, on this.
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, I thank all noble Lords for their constructive engagement in advance of Committee, and for all the amendments and valuable contributions that they will make during it.
Amendment 1 in the names of the noble Lords, Lord Sharpe and Lord Hunt, seeks to introduce a narrow definition of a “steel undertaking”. I fully understand the purpose of the amendment, but the Government have no desire for these powers to extend beyond what is necessary. They are exceptional powers for exceptional circumstances and should be exercised only where Parliament intends.
I respectfully suggest that the amendment would not provide greater certainty; instead, it risks introducing greater ambiguity into the Bill. The proposed test, that a business must be “predominantly” involved in steel, immediately raises difficult questions, as alluded to by the noble Lord, Lord Fox, on how “predominantly” is measured. Is it turnover, assets, employees, production, profit or some combination of these? The amendment provides no answer. That uncertainty would inevitably invite legal challenge, precisely when swift and decisive action may be required. Businesses with significant steel operations could argue that they fall outside the definition, because steel is not their primary activity. Equally, complex corporate structures could be organised to make the test easier to avoid altogether. In seeking to narrow the definition, the amendment risks creating loopholes that undermine the legislation’s very purpose. The Government’s drafting avoids these difficulties; it provides a clear and workable definition that gives legal certainty, while ensuring that powers are used only when genuinely needed to protect the public interest.
For those reasons, while I appreciate the spirit in which the amendment was tabled, I cannot agree that it improves the Bill. I know this is not what the noble Lords intended and I can accept that the current drafting is broad, but this definition follows closely that used in the Steel Industry (Special Measures) Act and it ensures that there can be no disputes about its meaning. In practice, we do not expect many companies to fall within the current definition, so the amendment would have minimal effect.
I will repeat the Government’s position expressed throughout the Bill’s passage so far: we are strongly minded to use the powers to acquire British Steel if it is in the public interest to do so, and we do not have any plans to acquire any other steel undertakings. It is therefore very unlikely that this would be used for any other company, let alone one that is engaged primarily in non-steel activity. I hope this helps clarify the matter and respectfully request that the amendment is withdrawn.
Lord Sharpe of Epsom (Con)
I am grateful to all noble Lords who have spoken. It was remiss of me not also to thank the Minister and his team for their extensive engagement on the Bill.
This amendment is simple. I am afraid that I do not agree with the Minister’s comments or those from the noble Lord, Lord Fox. This is very straightforward. In fact, I refer noble Lords to the Merriam-Webster dictionary, which says that the word “predominantly”, in formal or technical usage, can denote a precise majority, such as more than 50%, or an even higher threshold, such as 60% to 80%, depending on jurisdiction. I am not an expert on which jurisdiction we are in, but it clearly means north of 50%. The way the Bill is written, as I pointed out, could allow for as little as 1%.
I have listened to the Minister’s objections to the wording of the amendment and am very happy to work on tightening it up, if he thinks that would help. The amendment is simple: it would confine the powers in the Bill to genuine steel businesses—that is, undertakings
“consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel”.
I think that answers most of the Minister’s objections, which, frankly, if they are relevant to my wording, are also relevant to the wording currently in the Bill, so I do not really believe in the ambiguity argument.
Businesses with a limited connection to steel production should not face uncertainty about whether they fall within the reach of these nationalisation powers. The present drafting does not provide that reassurance; it permits powers to apply to an undertaking that merely includes steel-making or related iron production, as I have already pointed out. I will not press the amendment for now, but I would like further discussions with the Minister, if he is amenable, to see whether we can find a way to tighten up the language so that it both suits the Government’s purposes and makes it clearer for all those undertakings that we are discussing. For now, I beg leave to withdraw.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment seeks to limit the public interest test to the areas set out in subsections (a) to (c).
Lord Hunt of Wirral (Con)
My Lords, I speak to Amendments 2, 3 and 8.
Amendment 2 limits the public interest test to the specific factors listed in Clause 2. On first reading, the test looks robust: national security, the economy and
“the construction, maintenance and operation of critical infrastructure”.
These are serious criteria that one might think provide a meaningful check on the exercise of what are very significant powers. However, when one reads on, Clause 2(2) says that the test
“includes (but is not limited to)”
those grounds. I contend that, with those five words, the floor falls away. If the test includes but is not limited to the listed grounds, surely, in practice, there is no test at all. Any Secretary of State of any political persuasion at any time can conjure a reason and call it the public interest.
The amendment in my name and that of my noble friend Lord Sharpe of Epsom would remove those words and make the listed grounds exhaustive. It would ensure that when Ministers say that these are exceptional powers subject to a robust public interest test, it is actually true—not merely true for now with this Secretary of State in these circumstances but true in the legislation for every Secretary of State who follows.
The Government may say that there need to be other grounds, beyond national security, the economy and critical infrastructure. I would genuinely like to know what they are. What situation could possibly arise that those three criteria do not already cover? If the Government can answer that question, let them do so today. Let them set out on the record what additional circumstances they have in mind. If they cannot, these words should not be in the Bill.
We have a Bill that, as we just discussed in the first group, can capture businesses with only a peripheral connection to steel. We now have a public interest test with no effective limit. Will the Minister confirm that the powers in the Bill cannot be triggered simply because of industrial pressure; for example, because a trade union decides that the answer to a dispute is public ownership? Will he rule that out?
On Amendment 3, the Government’s impact assessment describes the difficult environment in which the steel sector operates, including high domestic operating costs and a lack of long-term investment. It recognises that these pressures bear directly on the ability of UK steel producers to compete. Yet Clause 2 refers only in the broadest terms to “supporting the economy”. That phrase could cover almost any intervention; it does not require Ministers to demonstrate that the intervention will leave the United Kingdom with a stronger, more productive or more internationally competitive steel sector.
There is a difference between preserving an undertaking for the moment and putting it on a sustainable footing for the future. Nationalisation may avert an immediate crisis, but it should not become a means simply of transferring losses, risks and difficult decisions from a company to the taxpayer. The question must be whether public ownership can help to secure the investment, modernisation, productivity and commercial resilience needed for this sector to compete successfully.
There is also a point of consistency with the Government’s own drafting. The Bill makes clear that the public interest test is not intended to be limited to the matters specifically listed. It says that the test includes but is not limited to national security, critical infrastructure and the economy, as I said earlier, so the Government have already chosen not to confine the public interest test. In those circumstances, why would they resist including economic growth and international competitiveness expressly within it? Growth is the Government’s stated number one priority. International competitiveness is plainly fundamental to the future of a sector exposed to intense overseas competition and high energy costs. If the Government consider national security and critical infrastructure important enough to name in the Bill, surely growth and competitiveness should also be named. I invite the Minister to explain why those two objectives do not appear in the Bill. How will the Government assess whether an intervention is likely to strengthen competitiveness? Will that assessment include energy costs, investment, productivity, output, technological modernisation, export potential and the undertaking’s ability to operate sustainably without indefinite support from the taxpayer?
On Amendment 8, the Government have confirmed that they have already provided approximately £555 million to British Steel for working capital, including raw materials and salaries. The National Audit Office reported that, as at 31 January this year, the Department for Business and Trade had spent £377 million on its intervention. At the then current rate of spending, total costs were expected to exceed £642 million by the end of this month. More importantly, the National Audit Office warned that if spending continued at the then current rate, costs could exceed £1.5 billion by 2028—and that figure was before any potential transformation of the business, compensation to the current owner or the eventual costs of exit. The NAO also found that the intervention has
“no clear end date … has not stabilised the company’s finances”
and began
“without a clear exit strategy”.
This Bill is not simply emergency legislation to keep the furnaces operating over a weekend. It creates enduring powers to transfer businesses, assets, rights and liabilities into public ownership. Before those powers are exercised, the Government must be able to demonstrate that the proposed course represents value for money.
The facts since the emergency intervention underline why this matters. We are told that the business in its present form is structurally unprofitable. We know that substantial decisions remain to be made on its future, including any transition in production technology, the cost of investment, the length of any transition period and the eventual route to a viable and sustainable business. The taxpayer needs protection against an open-ended commitment.
The Government may argue that the Treasury’s Managing Public Money framework already requires departments to consider value for money. I suppose I could look forward to the day when there is some evidence of the Treasury acting responsibly in this way. Can the Minister tell us what value-for-money assessment will be undertaken before a principal transfer power is exercised? Will it include the expected costs of compensation, operating losses, capital investment, decommissioning, restructuring and any eventual exit?
This amendment would not frustrate the Government’s ability to act where action is genuinely justified. It would simply ensure that before nationalisation takes place, the Secretary of State is satisfied that it is a responsible use of taxpayers’ money. I beg to move.
Lord Sentamu (CB)
My Lords, Amendment 2 would replace
“includes (but is not limited to)”
with the word “means” so that we knew what we were describing. The worry is that leaving it as it is could create a public interest so large that there was a mission creep that I do not think should be in the Bill, which is trying to nationalise steel. We need to be slightly more economical in the words we are using, so that we need not fear that on another day, if another public interest was being taken into account, the definition would prove far too loose. The word “means” does the job: we know exactly what one is talking about, and it lists the three elements. The noble Lord, Lord Hunt, wanted to include two other areas but, for me, limiting it to those three objects seems to be where we should stop. The word “means” would stop mission creep.
Lord Redwood (Con)
My Lords, I welcome these three amendments. Amendment 2 is a necessary slight curtailment but would still leave the Government with enormous scope, given how wide-ranging the three cited reasons for public interest intervention are. Like my noble friend, I cannot think of any other reason why they might want to do this that could not be adequately covered by the wide-ranging proposals in the existing text.
I agree that it would be a good idea to change the language through Amendment 3 to stress that intervention should, in the longer term, be interested in economic growth, profitability and successful investment. Surely the Government do not want a lame-duck investment that costs a large sum of money for a limited period of time but then they have to disappoint all those people who thought that it was going to be kept going for a rather longer period or that it might break through to profitability and success. If I had to choose between the three amendments, I hope my noble friend would particularly press Amendment 8 on value for money, which sums it all up.
At Second Reading, in looking at the general legislation, we had some discussions asking: what is the medium and longer-term future of blast furnace steel? As I think we have agreed across the House, at Second Reading and now, the main reason for the previous emergency legislation and this legislation is the temporary cessation of closure of two very important blast furnaces, which are our last blast furnace-making capabilities in the country. But I believe—I would love to have the Government either confirm or deny this—that it is still their medium to longer-term intention to close all blast furnaces in this country, as previous Governments have been doing, and to transfer to electric arc steel-making, preferably with private finance and successful competitive private sector businesses doing that work. In the previous exchanges, I think the Minister signalled that the Government do not wish to build a nationalised electric arc business with these powers, although for understandable reasons they have to be general and will most likely be exercised in the case of the blast furnaces. It would be helpful to workers and taxpayers if there were greater clarity over the time period for keeping these blast furnaces open, and whether there are any limits on the costs that the Government are prepared to run, so that people can make proper plans concerning their jobs and their futures in this important steel industry, and so that taxpayers could have some reassurance.
Lord Fox (LD)
My Lords, one of the things that the briefing from the high value catapult team confirmed is the enormous difficulty there will be in creating a viable business from what His Majesty’s Government intend to take control of in Scunthorpe. There is the age of its blast furnace, the potential cost of any replacement of a blast furnace, the expense of conversion to an electric arc furnace—if that is what is intended—and the hugely competitive landscape of the global steel markets. These are just the headlines of the complexity, but the choices go beyond blast furnace or arc furnace.
If investment is found to install a new electric arc furnace, what will it produce? Will it aim to produce the full range of steels that we need—longs, flats, rebar—or will it specialise in particular steels that perhaps are more strategic and less easy to source? If it goes down the specialisation route, the UK will probably need access to much more direct reduced iron, or DRI. It is likely that this would have to be imported, and these would be very high CO2 emission imports from most countries, because making our own DRI would need a whole new bit of kit which is very pricey. Choices and making the right calls will determine whether Scunthorpe has a long-term future and what that future looks like. It will determine whether it is indeed an investable prospect and whether it can attract the private sector.
When the Government begin—assuming this Bill becomes an Act—to use the terms of the Act to take ownership of this plant, that will change the focus of these choices. Of course, there will be a new board and management to run the plant, but the cost of the choices will rest with UK taxpayers, at least at first. We will be providing the capital. As we have heard, we have already made available £555 million in working capital, but clearly these sums could increase massively at scale. It is the scale of risk that the Government are taking on that is guiding my approach and our approach, because this Bill needs more scrutiny from Parliament at all levels. From these Benches, we will be pushing those buttons.
These three amendments start at least to open up that point around accountability. I am a bit intrigued because while I do not always agree with the noble Lord, Lord Hunt, he is normally internally consistent. However, the noble Lord started out by saying there should be no expansion of the terms of Clause 2 and then put forward two pretty reasonable ones about growth and expanding the economy. I have one that I think the noble Lord, Lord Redwood, would agree with, which is cost. We should have a clear understanding of the cost before the public interest test. I completely disagree with Amendment 2 because there needs to be a broader discussion around “public interest”. We need to understand the numbers around it, otherwise we do not know whether it is interesting to the public. I do not agree with Amendment 2. I have some sympathy with the other two amendments, and I am sure we will talk more about public interest tests as we deal with other groups.
Lord Leong (Lab)
My Lords, I thank the noble Lords, Lord Hunt, Lord Redwood and Lord Fox, and the noble and right reverend Lord, Lord Sentamu, for their contributions to this group. There are several amendments to the articulation of the public interest test in Clause 2. This is a key clause in the Bill; it is a necessary safeguard to ensure that the powers are used proportionately in response to a clear need.
Amendment 2 would limit the public interest factors that the Secretary of State may consider to those set out in the Bill. The Government agree that the three factors of national security, critical national infrastructure and support for the economy are likely to be the most relevant to the steel sector. Accordingly, the current approach ensures that they are given particular weight when assessing whether to pursue an intervention. However, circumstances may arise in which a case for intervention may not be clearly made on the basis of these three factors, yet it would clearly be in the public interest to take action. It is therefore pragmatic to build some flexibility into the Bill to address this issue.
I turn to Amendment 3. It has been suggested that the third public interest factor should refer specifically to
“economic growth and international competitiveness”,
rather than “supporting the economy”. With respect, this is a distinction without a meaningful difference. It is largely a matter of drafting rather than substance. The phrase “supporting the economy” is deliberately broad. It clearly encompasses economic growth and international competitiveness but also recognises that the economy is more than growth figures alone. It includes strengthening economic resilience, protecting strategically important industries, supporting employment, safeguarding supply chains, encouraging investment and ensuring the long-term productive capacity of the United Kingdom. By contrast, narrowing the text to
“economic growth and international competitiveness”
could unintentionally exclude other legitimate public interest considerations that any responsible Government should be able to take into account.
There may be circumstances where intervention is necessary to preserve critical industrial capability or economic resilience, even where the immediate effect on growth or competitiveness is less direct. The Government’s intention is to provide Ministers with a sufficiently broad framework to consider the full range of economic factors that may arise. The existing wording achieves precisely that: it is flexible, comprehensive and future-proofed, while fully capturing the objectives that the amendment seeks to emphasise. For those reasons, I do not believe that the amendment would improve the Bill. The Government believe that protecting our sovereign capability in what is a foundational sector for the economy will help to underpin our resilience and leave us less exposed to volatile international trading conditions. The Government therefore cannot support the amendment.
I turn to the amendments tabled by the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, and by the noble Lord, Lord Fox. In different ways, all three noble Lords seek to require the Secretary of State to consider value for money or the impact on the public finances before exercising the principal transfer powers.
Lord Leong (Lab)
I am referring to the noble Lord’s later amendment.
I fully agree with the principle that taxpayers’ money must be spent wisely. Any decision to bring a steel undertaking into public ownership would be among the most significant interventions that a Government could make. Such a decision should never be taken lightly, and it would not be. However, these amendments seek to place into statute an obligation that already exists as a fundamental principle of government. Every significant spending decision is subject to the rigorous disciplines of managing public money—as stated by the noble Lord, Lord Hunt—Treasury approval where appropriate, and the established accounting officer framework. Ministers are already required to demonstrate that public money is being used properly, proportionately and with due regard to value for money.
The question, therefore, is not whether value for money should be considered—it absolutely should—but whether it is necessary to restate an existing, well-established constitutional obligation in the Bill. I do not believe it is. Doing so would add no new safeguard, create no new accountability and impose no duty that does not already exist. More importantly, this legislation is intended to ensure that, where a vital national interest is at stake, the Government can act decisively. Decisions of this nature will always involve weighing immediate fiscal costs against the far greater economic and strategic costs of inaction. The loss of sovereign steel-making capability, thousands of skilled jobs and critical supply chains, and industrial resilience could ultimately impose a far greater burden on the taxpayer than timely intervention would. The Government will continue to ensure that every decision made under the Bill is subject to the highest standards of financial discipline and accountability. Those safeguards already exist; they are robust and will continue to apply.
Lord Hunt of Wirral (Con)
My Lords, I am grateful to all noble Lords who have contributed to this debate and to the Minister for his response. I reiterate what the noble Lord, Lord Fox, said earlier about the way in which the Minister has given us every opportunity to think ahead into the future and to receive expert advice as to the way ahead.
To summarise these three amendments, they do not sit easily together, as has been pointed out, but they have provoked a widespread debate. The noble and right reverend Lord, Lord Sentamu, was absolutely right to point out that mission creep should stop here. There should not be ways that the Minister could include all sorts of other reasons. In Amendment 3, I suggested two reasons, but the Minister carefully responded by not ruling them out and not ruling anything else in. It seems that either the noble and right reverend Lord, Lord Sentamu, is right, or the noble Lord, Lord Fox, is right or the Committee is confused. It has considered all the various options, but it would be useful, as my noble friend Lord Redwood said, to have greater clarity in the form of some draft business plan that could look to the future and work out the way ahead. Value for money, as my noble friend said, sums it all up. Although the Minister thought that the noble Lord, Lord Fox, had signed Amendment 8, either it has not come to my attention that he has or he has not signed it. It may be a later amendment which suggests that value for money is required.
I remain far from convinced by the Government’s case. These amendments address three basic questions which ought to be answered before the state is given a power of this significance. First, in what circumstances will the power be used? Secondly, what is it intended to achieve? Thirdly, as my noble friend Lord Redwood pointed out, how will the taxpayer be protected? The Government’s response seems to be that Ministers will behave reasonably, that the powers will be used sparingly and that the existing public interest test provides sufficient protection.
As my noble friend Lord Sharpe of Epsom said in the previous group, this Bill sends a message well beyond the immediate circumstances of British steel. Investors considering whether to commit capital to the United Kingdom will examine not simply what Ministers say today but what the legislation permits tomorrow. The Government say those risks are mitigated by a clear public interest test. But the reality is there is no actual test. There is much in this debate for the Government to consider, but for now I beg leave to withdraw the amendment.
Lord Wigley
“(d) supporting the local economy of any steel-making location which may be adversely affected by this Act.”Member's explanatory statement
This amendment seeks to ensure that consideration is given to the impact on the local economy arising from decisions made under this legislation.
Lord Wigley (PC)
My Lords, I beg to move Amendment 4 standing in my name and to speak to Amendment 36, which is also in my name and which is grouped with it—as is Amendment 29 in the name of the noble lord, Lord Fox, and Amendments 30, 31, 43, 44 and 46 in the names of the noble Lords, Lord Sharpe and Lord Hunt.
I quote Amendment 4, just to bring it to everyone's mind. It would add, at the end of line 20 on page 1, a new subsection:
“(d) supporting the local economy of any steel-making location which may be adversely affected by this Act”.
I would have thought that those words would commend themselves very much to this House. All these amendments have to do with the impact of the Bill when enacted—an impact which may be so significant to various aspects of the economy, and indeed on the communities which may benefit or may suffer directly or indirectly from this legislation. I shall look forward to hearing the Opposition Front Bench when they speak, particularly on Amendment 43, on the possible impact of this Bill when enacted on inward investment—a subject close to my heart, as the noble Lord, Lord Hunt, will recall, from prior incarnations. But I digress. Amendment 4 in my name would specifically impose a duty on the Secretary of State, in relation to his responsibilities regarding the public interest, to broaden that responsibility to include, via the proposed new subsection (d),
“supporting the local economy of any steel-making location which may be adversely affected by this Act”.
I have deliberately drawn this new subsection widely and not confined it to Wales, as I know from our experiences in Wales how badly steel-making communities across these islands can be hit when steel-making is ended or run down, wherever those communities may be located. I saw this with my own eyes when I was living in Merthyr Tydfil in the 1970s, at the time of the rundown of the steel manufacturing in nearby Ebbw Vale. The economic decline of the Blaenau Gwent area has been staggering, as the noble Lord, Lord Murphy, mentioned in the Second Reading debate of this Bill. It is now amongst the poorest areas, economically speaking, not only in Wales but throughout Britain. Decisions arising from the operation of this Bill, when enacted, could have far-reaching consequences for communities that have depended on steel in the past, and which may be facing dire consequences of specific and deliberate action undertaken by the Government through this Act. A duty surely lies on us to help safeguard those communities.
There will inevitably be winners and losers as a result of actions taken under this legislation. Hard-working, skilled industrial communities may be undermined through no fault of their own. Indeed, the decisions taken by the UK Government may be, in some regards, for the good of the industrial base of these islands, but do not tell me that, to an unemployed skilled steel-worker in Margam or Shotton or Llanwern—or, for that matter, in Teesside or Sheffield or Doncaster—this does not matter. If the actions of the Government in consolidating steel-making in a limited number of locations has that knock-on effect, then the Government surely have a responsibility to support those local economies hard hit. I cannot believe that a Labour Government will not readily acknowledge this. I invite them to accept Amendment 4 or at least to undertake to return with their own amendment on Report to secure the objectives I have outlined.
Amendment 36 in my name is also in this group. It would provide a vehicle, via Clause 58, whereby the financial aid outlined in Amendment 4 could be channelled through local authorities in steel-making areas hard hit by this Bill so that they were compensated for the adverse effects on local communities arising from the exercise of the powers in the Bill relating to steel-making in their area. As I stated at Second Reading, I support the objectives of this Bill but, with all the good will in the world, there will inevitably be losers as well as winners. As such far-reaching changes will be triggered by Act of Parliament, surely it behoves Parliament to safeguard those who may be adversely hit as a direct consequence. I beg to move.
Lord Fox (LD)
My Lords, this is a mixed bag of amendments. I will speak primarily to Amendment 29 in my name but also to some of the others.
Amendment 29 highlights the potentially distorting effects that CBAM—the carbon border adjustment mechanism—would have on various elements of the steel industry, from supplier to steel user. On the one hand, if applied fairly, CBAM could and should deal with the currently distorting global steel market, whereby Chinese steel, with a high carbon investment, is competing unfairly with greener steel in Europe and the United Kingdom. So far, so good, but the effects of CBAM on other steel users and manufacturers could, if applied wrongly, be very detrimental. That is why the international picture, particularly our future agreement with the EU, will be so important in ensuring that manufacturers do not have one hand tied behind their back.
The way that CBAM interacts with tariffs, which has not been discussed terribly much, is important and issues around energy costs have been put in this group, but in truth CBAM, the EU and energy costs fall outside—or at least at the very edges of—the scope of this Bill. However, Amendments 4 and 36 in the name of the noble Lord, Lord Wigley, and Amendment 44 from the noble Lords, Lord Sharpe and Lord Hunt, are front and centre within it. Tata, for example, is making considerable investments on its own account and should not be disadvantaged by any publicly owned business. Similarly, the communities in which the industry is located are vital and must be a key part of decision-making.
The nature of the amendments in this group is almost a snapshot, whereas in reality it will be a long-term issue. That is why, later in Committee, I have proposed a stakeholder advisory committee in Amendment 22 and an explicit role for Select Committees in Amendment 38. This will be an ongoing issue and we will need ongoing parliamentary review of it. While I support elements of this group and the intentions within it, I think the heavy work will be done in a different way going forward.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 30, 31, 43, 44 and 46 standing in my name and that of my noble friend Lord Hunt of Wirral. I thank the noble Lords, Lord Wigley—who I thought made a very powerful case—and Lord Fox, for their previous speeches.
Amendment 30 goes to the valuation of a steel undertaking and the need for that valuation to reflect the real commercial environment in which the undertaking will operate. That environment is not fixed; it is being shaped directly by government policy and, in particular, by the new steel trade measure coming into effect from 1 July. Only days ago, the Government changed the detail of that policy, relaxing the original proposals somewhat, with tariff-free quota reductions pulled back from the level first proposed. We will no doubt discuss that in more detail when the Statement is taken tomorrow, and I do not intend to rehearse that debate now.
However, the fact is that the Government’s choices on trade policy will have a material effect on the commercial position, and therefore the value of any steel undertaking. A tighter quota and a higher above-quota tariff will limit import competition. The way quotas are set will affect downstream industries, supply chains, customer relationships and the availability of particular steel products. The Government cannot, on the one hand, present their trade policy as central to the future of UK steel and, on the other hand, resist any requirement for that policy to be factored into what a steel undertaking is actually worth.
The need for clarity is made more acute by the uncertainty of recent weeks. Businesses have been trying to understand what the new quota levels will be, how quickly quotas may be exhausted, which products will be covered and what the practical effect will be for producers and steel-consuming industries alike. Do the Government accept that the new steel trade measure will affect the value of steel undertakings? If so, why should the independent valuer not be required to consider it?
On Amendment 31, electricity costs are among the central determinants of the viability, competitiveness and future value of steel. The position facing British industry is stark. The United Kingdom has had some of the highest industrial electricity prices in the developed world. UK industrial users pay substantially more than competitors in France and Germany, and—on the most widely cited international comparison—around four times as much as businesses in the United States.
For steel-makers, the gap remains significant. That is particularly serious as the sector moves towards more electricity-intensive production methods, including electric arc furnaces. A business may have the workforce, the plant, the orders and the ambition to modernise, but it cannot compete indefinitely if one of its principal inputs costs materially more than it does for its overseas competitors. These costs, I am afraid, reflect recent policy choices by the Government. The fact that the Government provided some limited relief from network charges to eligible energy-intensive industries rather demonstrates the point.
The Government now say that further measures will bring prices closer to those in competitor countries, but closer is not the same as competitive—and nor is a future scheme with questions of timing and eligibility still to be resolved an adequate basis on which to value a business today. This amendment would require the valuer to consider the prices paid by UK steel producers, the disparity with comparator countries and the effect of any support intended to reduce energy costs, including both the costs after existing reliefs and the risk that relief may be time-limited, incomplete or dependent on eligibility. It should also include a clear comparison with major competitor countries.
Is the Government’s objective genuine parity in industrial electricity prices with our principal competitors? If not, what continuing cost disadvantage do the Government consider acceptable for a strategic trade-exposed industry? How will the valuer assess the effect of support, which is prospective rather than guaranteed, particularly where broader measures are not expected to operate fully until 2027? The Government’s own impact assessment accepts the seriousness of this problem. It states that energy costs threaten the sector’s long-term viability and its ability to compete. It also acknowledges that UK steel producers face higher electricity prices than comparable countries, and that contributes to the uncompetitive production costs and pressure on margins.
On Amendment 43, as we raised at Second Reading, the Government’s impact assessment recognises the risk of a chilling effect on investment if businesses and investors perceive a greater risk of state intervention—a point very well made by my noble friend Lord Redwood in the last group. The United Kingdom has long depended on its reputation as a stable, predictable and rules-based place in which to invest. The risk is greater in the current climate. Steel businesses are already dealing with high electricity costs, rapidly changing trade policy and significant regulatory burdens. Adding an open-ended power of nationalisation can only increase the sense of risk for those considering whether to invest in the United Kingdom. If the Government are confident that their actions will strengthen confidence and attract private capital, they should have nothing to fear from transparency.
Amendment 44 addresses a basic point of fairness. If the Government take a steel undertaking into public ownership, that business must not receive selective advantages which place comparable privately owned steel businesses at an artificial disadvantage. Without this safeguard, there is a clear risk of distortion through subsidies, preferential access to public contracts, more favourable regulatory treatment or other support unavailable to private companies. The Minister in the other place stressed the need for flexibility and for the Government to act quickly, but flexibility need not mean unfairness. It is entirely possible to support a strategic undertaking in exceptional circumstances while maintaining a level playing field for the wider sector.
On Amendment 46, if we accept the Government’s central argument that British Steel is critical national infrastructure and that domestic steel production is essential to our national security and without it we cannot build our Navy, jets or submarines, they must accept the logic of what follows from that argument: you cannot declare something critical to national security then leave it defenceless. Amendment 46 states that, where the Secretary of State has exercised a principal transfer power where steel has been brought into public ownership precisely because it is in the public interest, the Secretary of State must have the power to prevent industrial action destroying the very thing that public ownership was meant to protect.
We have seen what happens when Governments are all too timid to act. We have watched the railways held to ransom by the RMT, and we have seen it in healthcare where the former Health Secretary himself felt compelled to call out what he described as “cartel-like behaviour”. The Government have made themselves more vulnerable still. The Employment Rights Act 2025 stripped away strike safeguards that existed for a good reason. The ballot thresholds are gone: the Government unlocked the door and then expressed surprise when it was pushed open.
If a steel undertaking is nationalised in the name of national security and a trade union then calls a strike that shuts down production, what will the Secretary of State do? Will he stand at the Dispatch Box and explain that our defence supply chains have been severed because he did not want to upset the unions? Do the Government seriously want domestic steel production halted because a union decides the moment of public ownership is the moment to press its advantage?
The Government cannot have it both ways: they cannot argue that steel is so vital to this country that it must be brought into public ownership and simultaneously argue that, once it is in public ownership, it should be just as exposed to industrial disruption as any other business. The whole point of this public interest test, if it means anything at all, is that some things matter too much to be left to the ordinary run of commercial risk. Industrial action that threatens critical national infrastructure is precisely such a risk.
I invite the Minister to tell the House that the Government have considered the risk. I invite him to explain what powers the Secretary of State would have on the day a strike is called at a nationalised British Steel to keep the blast furnaces lit. If he cannot answer that question satisfactorily, this amendment provides exactly the answer that is needed.
Lord Redwood (Con)
My Lords, I am grateful to my noble friend for raising the crucial issue of electricity prices. As the strategy is to convert more and more to electric arc furnaces, the price of electricity becomes the critical variant in determining how successful those businesses will be, how competitive their prices will be and whether they will generate cash and profit to reward those who ventured in them, or whether there will be problems for those businesses, just as there are problems in the British Steel carbon-based system through its blast furnaces. I hope the Minister can give us a little more background by way of reassurance, given that the steel strategy has been, and is still to be, based on electricity as the prime source of energy. There needs to be a policy that will consistently deliver competitive electricity prices because the current prices, without specific and targeted subsidy intervention, are way out of sync with the electricity prices in the more competitive world of our major competitor countries.
It is very important that this group of amendments raises the issue of tariffs. Of course, anybody valuing the assets that might be acquired under this legislation, or valuing what we already have by way of control and operating responsibility, will need to look at the impact of tariffs. It is a good idea to stress this because these are a very major change to the background for the conduct of steel businesses in this country, and we cannot be sure exactly what the impact is going to be. We have two types of impact arriving around the same time. There is the carbon border adjustment mechanism, which is, in effect, a fairly universal tariff based on the carbon content of imported material, which is clearly going to apply substantially to this industry. Then there are the specific tariffs which the Government have announced to come shortly, which target competitive steel coming into Britain with a very large increase in tariff and a rather low protected quota so that there will definitely be a substantial increase in cost for import.
You could argue, as I presume the Government do, that this is completely benign for our steel industry because it means that the combination of the immediate tariff and the soon to come CBAM tariff will make imported steel so much less competitive, and will therefore help reduce the pressures on our existing electric arc furnaces in the private sector and the two blast furnaces now, in effect, under the control—but not in the ownership—of the public sector. There will be some relief, as the policy intends. However, there can be other consequences which a valuer would have to take into account.
For example, the higher the cost of imported steel, the more difficult it will be for those many companies and industries that use and add value to steel in our wider steel-using industry. There will be limited scope for all users of imported steel to find exactly the right specifications of steel, and the right availability and pricing, from the rather limited-scale industry that the United Kingdom now has as a steel producer. There could well be financial difficulties, reductions in turnover and activity, or the collapse of steel-using businesses in the United Kingdom that face these very high tariff impositions on their main raw material. If they acquire more by way of import than at home and they cannot immediately substitute, you could have the paradoxical effect that the tariff designed to protect the British industry lost orders to the British industry as well as to the exporting industry from abroad. You could well have businesses here collapse—those that are substantial steel users but can no longer carry on the business efficiently to sustain their limited purchases from the UK, because of the cost of the expensive imports.
This needs careful policy examination. I am glad that the Government had one rethink about the tariff quota arrangements for this, but they probably need to do a bit more homework about the balance between the rather larger turnover at risk in steel-using businesses in the United Kingdom and the rather too small turnover available in steel production. They therefore probably need to consult a bit more widely over the medium- to longer-term impact on steel demand from domestic as well as imported sources.
I am interested in the proposals on impact on the economies, but I am not quite sure what is in mind and how it would work out. It is quite right, as the noble Lord, Lord Wigley, said, that there will have been impacts from previous closures or redundancies, and there could be future bad impacts as steel plants become more productive and need less labour, or as the final conversion is made from blast furnaces to electric arc, when there would clearly be a substantial loss of employment. There will need to be assistance and help for those who lose their jobs or have lost them in the past but still have not been able to retrain or find good alternative employment. One needs rather more by way of detail, and I am not quite sure that this Bill is the right place to do that, because it relates to a series of other government initiatives, funds and programmes that are more generally available. However, the noble Lord, Lord Wigley, might be right that they need to be improved. That is a subject for another conversation on another day.
Lord Leong (Lab)
My Lords, noble Lords have raised a number of amendments to ensure that there is a level playing field across the steel industry. I thank noble Lords for their commitment to ensuring that the Bill positively impacts the UK steel industry. A number of amendments have been tabled on this topic so, with this in mind, I will address those before turning to the new clauses proposed for the Bill. I will consider Amendments 29 to 31 together, as I believe they are intended to have the same effect.
Amendment 29 seeks to specify that compensation regulations under Clause 54(4)(b) allow the independent valuer to take into account external tariffs, as mentioned by the noble Lord, Lord Redwood, and the carbon border adjustment mechanism when valuing the steel undertaking, as mentioned by the noble Lord, Lord Fox. Meanwhile, Amendment 30 seeks to require that any valuation of a steel undertaking takes into account the steel import quota and tariff measure that is due to take effect from 1 July 2026. Amendment 31 would require any valuation to consider the anticipated effects of electricity prices.
I am sympathetic to concerns about the impact that these trade-related measures and electricity costs may have on steel undertakings, and therefore on any compensation determinations made by an independent valuer in relation to them under any compensation scheme regulations. However, I emphasise that the Government consider it unnecessary to add these amendments to the non-exhaustive list of examples of matters for a valuer to take into account under any compensation regulations. Any valuation would reflect the wider economic and market context, including the trading environment in which the steel undertaking operates, with or without tariffs, without the need to single out specific factors in primary legislation. This means that the valuer will ultimately have discretion to determine what they consider to be the relevant factors in making their determination.
Valuing a steel undertaking would be complex. The independent valuer would necessarily have, or be advised by those who have, expertise and experience in this area and would be well equipped to make informed decisions on their approach to valuation. For this reason, the Government do not consider these amendments necessary.
I turn to Amendment 43, which would place a duty on the Secretary of State to report to Parliament on the impact that any nationalisation of a steel undertaking would have on inward investment in the UK. I emphasise the commitments the Government have already made to support investment in the steel sector. The Government’s steel strategy set out commitments to removing barriers to investment and creating a more supportive business environment so that steel companies are better able to compete, are protected from carbon leakage and unfair trading practices, and have greater security and certainty. The Government welcome new entrants to the UK steel industry, which would foster a more competitive business environment. Government funding is available to support this.
I reassure noble Lords that the impact of nationalisation would be taken into account in any impact assessment on the use of transfer powers. This is the most appropriate mechanism for reporting on any expected impact on the economy. Given the complexity, interlinking and scale of investment trends, it would be difficult to report further on the exact impact of a single intervention. It is for this reason that we ask for this amendment not to be pressed.
Amendment 44 seeks to ensure that the powers in the Bill do not confer any advantage on publicly-owned steel undertakings which could distort competition and trade. I understand the concerns from the noble Lord, Lord Sharpe, that the Bill may unfairly distort competition and investment across the steel sector. However, I reassure your Lordships that this is not the Government’s intention. Any financial assistance provided to publicly-owned steel undertakings will be time-limited, targeted and proportionate. Furthermore, we will continue to comply with domestic and international subsidy control obligations to avoid market distortions. I hope this clarifies that the Government are committed to ensuring a level playing field between state and privately-owned steel companies. This amendment is therefore not required.
Amendments 4 and 36 were tabled by the noble Lord, Lord Wigley, who has raised concerns about what he considers to be the potential adverse impact of the Bill on local communities in steel-making areas. Amendment 4 would create an additional public interest factor for a Secretary of State to consider ahead of exercising the principal transfer power. This would be to support the local economy of any steel-making location adversely affected by the Bill.
The Government have introduced the Bill to support domestic steel-making, not to threaten it. Additionally, one of the three factors set out under the public interest test in Clause 2 is supporting the economy, including any part of the UK economy. The same applies to Amendment 36, which would allow financial assistance to be provided to compensate communities adversely affected by the Bill. I do not expect the Bill to have any adverse impacts on local communities, so I do not consider this amendment appropriate.
I emphasise to the noble Lord that the steel industry in Wales is the only part of the industry with a ring-fenced fund: £500 million for Port Talbot to transform the steelworks and secure steel production at that site and to secure the future of the south Wales steel industry. This is a significant investment that will benefit the local community in that area for years to come. This demonstrates the Government’s confidence in the Welsh steel community and the crucial role that Tata plays in it.
I understand the objective of Amendment 46, tabled by the noble Lord, Lord Sharpe. We all want to ensure that any publicly owned steel undertaking can operate effectively, maintain production and continue to serve the national interest. On that objective I do not believe there is any disagreement within the Committee; where we differ is on the means of achieving it. The amendment would give the Secretary of State the power to prohibit or restrict industrial action where it is considered to pose a sufficient risk to the public interest.
The Government do not believe that curtailing workforce rights is either necessary or the right way to secure a successful and resilient steel industry. The people who work in our steel plants are not an obstacle to operational success; they are the reason it is possible. Their skills, commitment and professionalism keep furnaces running, fulfil customer orders and sustain a strategic industry on which our economy and national security depend. The long-term success of a publicly owned steel undertaking will be built on partnership with this workforce, not on restricting their rights.
Moreover, good industrial relations are an asset in themselves. Constructive engagement with employees and their trade unions is far more likely to ensure stable operations than legislation that risks damaging trust and co-operation. Indeed, imposing additional restrictions could prove counterproductive, making disputes harder rather than easier to resolve. The Government have established constructive relationships with the trade unions representing workers at British Steel and across the wider steel sector. We value the role they play in representing their members and in helping secure the future for this vital industry.
Existing industrial relations legislation already provides the legal framework for industrial action. The Government see no justification for establishing a separate and more restrictive regime merely because an undertaking has entered public ownership. Public ownership should not mean fewer workers’ rights; it should mean responsible stewardship of a strategically important industry, working with the skilled men and women whose expertise will determine its success.
I thank all noble Lords for their amendments, which aim to ensure that the Bill does not distort the market to create inequality between public and private sector steel companies. I hope I have reassured noble Lords that the Government remain committed to revitalising the steel sector, which should be achieved through co-investment from the private and public sectors. I respectfully ask that the amendment be withdrawn.
Lord Wigley (PC)
My Lords, I am grateful to the Minister for his response on the whole range of diverse amendments we have before us. No doubt the Opposition Front Bench will have their own opinion on which ones of these they may want to return to on Report, because there are important issues that undoubtedly have arisen from those amendments.
Amendment 4 seeks to support
“the local economy of any steel-making location which may be adversely affected by this Act”.
I noted the Minister’s response, that this may be taken to be covered by other words in this subsection and in other parts of the Bill. But, with respect, words such as
“supporting the economy of the United Kingdom or any part of the United Kingdom”,
are so general that they do not actually address the point we are specifically addressing in Amendment 4, which is the impact on local communities of steel-making locations which may be adversely affected by the Act. It may well be that some such locations are not adversely affected by the Act—they may not be helped by the Act, but they may be able to get on with it—but some almost certainly will be, and there should be express and specific provision to ensure that the needs of those areas are on the face of the Bill.
In Committee, we are quite clearly only probing these matters. But I ask the Minister whether, between now and Report, he will come back and consider that. This is because the reaction against the Act will not be from the generality of the UK economy, or regional economies; it will be from specific places that are in danger of losing out because of the changes, some of which are perhaps inevitable, but which need to take place in order to facilitate the general objective of the legislation. Therefore, in begging the leave of the House to withdraw Amendment 4, I ask the Minister to consider that specific aspect between now and Report.
Lord Hunt of Wirral
“(2A) The Secretary of State may not exercise a principal transfer power unless the Secretary of State has commissioned an independent assessment of whether the exercise of the power is in the public interest, and that assessment has demonstrated that it is in the public interest.(2B) The Secretary of State may appoint such independent person as the Secretary of State thinks fit to carry out an independent assessment under subsection (2A), and may pay remuneration and allowances to that person.”Member’s explanatory statement
This amendment would require an independent assessment of whether the public interest test had been met before the Secretary of State could exercise the principal transfer powers.
Lord Hunt of Wirral (Con)
My Lords, Amendments 5, 6 and 42, standing in my name and that of my noble friend Lord Sharpe of Epsom, go to three basic questions which ought to be answered before the Government exercise powers of this scale. They are: on what evidence is nationalisation justified, by what criteria will Ministers make that judgment, and what will be the financial and economic consequences?
Amendment 5 would require an independent assessment before a principal transfer power is exercised, establishing that the proposed transfer is in the public interest. That is not an attempt to prevent the Government acting in a genuine emergency. It is an attempt to ensure that before private assets are transferred into public ownership, there is an objective check that the case has been made.
The sums involved may be very substantial. Once the state acquires a business, it may assume not only its assets but its liabilities, its working capital requirements, its investment needs, and the risks of continuing operating losses. These may be decisions with billions of pounds at stake. They should be based on evidence, not merely urgency or political pressure.
Amendment 6 is the natural counterpart. It would require the Secretary of State to lay before Parliament the full criteria by which the public interest test has been judged. The Bill currently gives Ministers a broad discretion. I believe that Parliament is entitled to know how that discretion has been exercised before a transfer takes place. What precisely has been considered? How have national security, economic consequences, competition, costs to the taxpayer and the future viability of the undertaking been weighed? Those are not matters which should be left to assertion after the event.
Lord Redwood (Con)
I am very glad that my noble friend raised the issue of an impact assessment, because if the Government press ahead with the acquisition of British Steel under the legislation, that could be the first opportunity we have for a realistic impact assessment. Yet, the taxpayer has been responsible for the losses in working capital and investment funds for over a year now, with the lack of clear reporting that we have commented on before.
We have an impact assessment for this piece of legislation. Understandably, it says that there are not any costs or benefits to report, because there is not a transaction. These are enabling powers, which would enable the Government to undertake and complete a transaction. But it would only be at that point that officials tasked with the difficult question “What is the impact?” would be able to come up with some numbers, because we would then presumably have some visibility on the cost of acquisition, if any, the operating costs and working capital costs that will go forward. That would be very helpful, in connection with the difficult investment at Scunthorpe, where, as we heard earlier, the NAO reported that there has already probably been £642 million of taxpayer expenditure up to the current month, with a very high run rate going forwards. So, I hope that the Government will offer us reassurance—if not a new clause in the Bill—to say that there will have to be a proper and timely impact assessment.
That, too, would clearly require proper due diligence, which I trust has been under way, now that the Government are responsible for the business. We would need to know that there had been a proper study of Anne and Bess, the two blast furnaces, which were either built or last substantially modified in the early 1950s. These are ageing assets. They have had deep maintenance in this century, but we would need a condition statement on that, so that the Government are reassured that however long they think they can run these blast furnaces for is feasible in terms of the condition of the plant. In order to sustain the employment for the next month, year or whatever it may be, we would need to know that there will not be major maintenance required or no question of having to cool the furnaces down, because that is a dangerous and expensive process and would raise issues about how easy it would be to spend enough money to reinstate these particular assets.
Of course, it would also require proper reporting to the Government—not supplying all the detail to us, but proper reporting on market prospects and how the steel product produced at Scunthorpe is perceived, and what the market opportunities, in general terms, might be and other supporting documents. It will require a serious impact statement, for the benefit of democratic accountability. More importantly, that would prove that the Government have done their homework, because the Government should not be taking on a plant like this unless they have a condition report, a marketing report, a proper cost examination and so forth, which I and my noble friends have been referring to.
Lord Fox (LD)
My Lords, I do not want to be the bringer of bad news to the noble Lord, Lord Redwood, but I suspect that it is pretty clear that the condition of the blast furnaces is poor and whatever happens, either to reinstate them to the level that would take them forward or to invest in electric arc, will take a lot of money. That is the point that we are focusing in on, and that is why we are focusing in on the public interest test. We have not yet gotten past Clause 2 yet, because this is the crunch.
I have a group of amendments in the next group, so I will reserve almost everything I have to say. The noble Lord, Lord Hunt, has already disobeyed his Amendment 2, because we are seeking to broaden the scope of the public interest test. With respect to the noble and right reverend Lord, Lord Sentamu, there is such a number of issues that have to be addressed within the particular field of potential investment that the public interest really requires focus. I will leave it at that for this group and then come back to these in the next group.
Lord Leong (Lab)
My Lords, I thank the noble Lords, Lord Redwood, Lord Fox and Lord Hunt, for their contributions.
The noble Lords, Lord Hunt and Lord Sharpe, tabled Amendments 5, 6, and 42 to provide for an independent person to assess the public interest. Further amendments tabled by the noble Lords would require the Government to publish both the criteria used to assess the public interest and their assessment on how those criteria are met, before exercising the principal transfer power. Amendment 42 would require an impact assessment to be published before any intervention or the exercise of any power under the Bill. As these amendments deal with similar issues, I will address them together.
I start by saying that I understand and sympathise with the desire for the greatest parliamentary and stakeholder scrutiny of a decision to intervene under the powers in the Bill. Stakeholder engagement is a key part of the Government’s policy approach to the sector, with Ministers regularly meeting key industry groups and representatives through the steel council and other forums. The Government have published an impact assessment alongside the Bill, explaining how the public interest test will be considered. A further impact assessment will be published alongside any secondary legislation exercising the transfer of power.
The framework for decisions to intervene will stem from what has been included in Clause 2, with regard to the three public interest factors. There is no attempt on our part to obfuscate or hide the criteria that will be applied in practice. The Government will not only consider whether a steel undertaking is engaged in activity that serves the public interest; they will also consider whether the activity is at risk of not receiving government intervention.
The Government cannot support these amendments as each would create additional hurdles and process pre-intervention. In the kinds of situations that the Bill envisages, speed will be crucial. Likewise, commercial and market sensitivities mean that swift action will, in most circumstances, be necessary to avoid uncertainty.
None the less, I am aware that there are strongly held concerns about this issue, and I can confirm that the Government will consider options for Parliament to scrutinise decisions taken either at the time of or after the exercise of the transfer of powers ahead of Report stage. I hope that this offers some reassurance to noble Lords, and I look forward to continuing further conversations with the noble Lord, Lord Fox, ahead of Report. With that, I ask that the amendment be withdrawn.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to the Minister for his response, particularly his closing words. My hopes were raised when he started by saying that he understood everything that I had said and was sympathetic. Then the situation clouded a little as he said that these amendments would present additional hurdles at a time when speed would be essential, but then he said that the Government would consider options between now and Report—and that is what I was seeking to hear.
I am very grateful to my noble friend Lord Redwood for putting it all in the historical context. It is easy to forget the pace at which we entered this debate, by being summoned to Parliament in April of last year. As the noble Lord, Lord Fox, reminded us, Clause 2 is the crunch. It is a key part of this Bill. To remind colleagues, Amendment 5 would require an independent assessment confirming that nationalisation is in the public interest before transfer powers could be used. Therefore, as we approach that amendment, I obviously cannot press the Minister on the options that the Government will consider, but it would be a way forward if we could find a solution comparable to that in Amendment 6, requiring the Secretary of State to lay before Parliament the criteria used to assess the public interest before using transfer powers—and then Amendment 42, which would require an impact assessment.
I recognise the point that the Minister has made about the practical difficulty of preparing a full assessment before the exercise of emergency powers—particularly, as he explained, where Ministers may need to act quickly to prevent serious harm. However, that cannot mean, as I believe the Minister accepts, that the financial consequences are treated lightly. The cost to the taxpayer of taking on a steel undertaking—its liabilities, its working capital needs and its future investment requirements—may be substantial. As my noble friend Lord Redwood pointed out, Parliament has a proper understanding and an interest in understanding those costs, the risks assumed and the basis on which the decisions have been made. Parliamentary scrutiny should not be seen as an obstacle to action. It is surely a necessary part of ensuring that exceptional powers are used responsibly and transparently.
We await the decision of the Government. I had hoped that the Minister would commit to publishing an impact assessment alongside the exercise of the power. I will examine his words carefully, because that assessment is the key. It should set out the costs incurred, the economic implications, the liabilities assumed, the anticipated future costs and the risks to the taxpayer. There is much for the Government to reflect on. I beg leave to withdraw the amendment.
Lord Fox
“(2A) The Secretary of State may not exercise a principal transfer power unless they have laid a statement before both Houses of Parliament explaining their reasons for concluding that it is necessary to exercise the power in the public interest.”Member's explanatory statement
This amendment would require the Secretary of State to lay a statement before Parliament explaining their reasons for concluding that it is necessary to exercise a principal transfer power in the national interest, before exercising that power.
Lord Fox (LD)
My Lords, I shall speak also to Amendments 10 and 11 in my name.
Agreement appears to have broken out. The noble Lord, Lord Hunt, the Minister and I all agree that the wording of Clause 2 is central to how we move forward. I always suspected that the public interest test element would be the hardest bit to resolve in this Bill. We are beginning to see that this might be true.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the noble Lord, Lord Fox, for bringing forward these amendments. As he has observed, there are similarities with some amendments of ours and we are happy to work together to clarify them. He could also have said that Parliament will be acting at speed tomorrow on the National Security (State Threats) Bill from the noble Lord, Lord Hanson—so it can be done.
We have already raised significant concerns about the breadth of the public interest test in Clause 2. The amendments in this group go directly to those concerns. The noble Lord is quite right that, before such exceptional powers are used, Parliament should be told why nationalisation is considered necessary. It is also right that the Government should have to consider the effect on the public finances and whether the undertaking has any credible short-term and long-term prospect of being investable. A business may be capable of being kept open in the short term, but that is not the same as being viable, competitive or capable of attracting the investment needed for its future. The public interest also cannot be assessed without proper regard to the liabilities and continuing costs that may fall on taxpayers.
The Government’s approach so far has relied heavily on broad discretion and ministerial assurance. These noble Lord’s amendments would introduce greater transparency, discipline and realism into that process. For those reasons, we support them.
Lord Leong (Lab)
My Lords, I thank the noble Lords, Lord Fox and Lord Sharpe, for their contributions. I also thank the noble Lord, Lord Fox, for his constructive engagement over the past few weeks. I understand that he is trying to support the steel sector and the Bill while ensuring value for money, which is the Government’s objective as well.
Amendment 10 would require the Secretary of State to take into account the impact on the public finances when applying the public interest test. Of course, any decision to nationalise a steel undertaking should not be taken lightly, given the significant costs that could be incurred. However, the principle of securing value for money for the taxpayer is already well established and embedded in government decision-making, as I said on an earlier group. Any decision to exercise the powers in the Bill is subject to the usual Managing Public Money governance and the framework of accounting officer checks, which includes consideration of the impact on the public finances. I therefore respectfully suggest that incorporating the amendment into statute would not serve any particular purpose, but we are mindful of ensuring that costs associated with the Bill are well managed.
The noble Lord, Lord Fox, also proposes, in Amendment 11, that the Secretary of State should take into account the short-term and long-term investability of a steel undertaking when considering whether to intervene in the public interest. I understand the sentiment behind the amendment, but I do not think that investability should directly inform the public interest test.
If a steel undertaking is an investible prospect in the short term, it is unlikely that there would be a case for government intervention, as the need could be met by the private sector. The intention behind the Bill is not to crowd out private investment but to act where private ownership has failed. Whether a steel undertaking is investible in the longer term is highly speculative, so I do not think it would be particularly helpful for it to form part of the statutory framework for the decision. By intervening, the Government would hope to turn a steel undertaking that is not investible into something that may become investible. To the extent that this is what the noble Lord hopes to achieve, we share his ambition, but I do not think that the amendment is workable.
Amendment 7 would prevent the Secretary of State exercising the principal transfer powers until a statement explaining how the public interest test is met has been provided to Parliament. I am sympathetic to the desire for greater parliamentary and stakeholder scrutiny of any decision to intervene under the powers in the Bill.
As I said previously, the Government have published an impact assessment alongside the Bill, explaining how the public interest test will be considered. Any further impact assessment would be published alongside any secondary legislation exercising the transfer powers. The framework for the decision to intervene will stem from the three public interest factors included in Clause 2. The Government will consider not only whether a steel undertaking is engaged in activity that serves the public interest but whether that activity is at risk without government intervention.
The Government cannot support this amendment, as it would create additional hurdles and processes pre-intervention. In the kinds of situations that the Bill envisages, speed will be crucial, as I said previously. Likewise, commercial and market sensitivities mean that swift action will, in most circumstances, be necessary to avoid uncertainty; I take note of what noble Lords said about speed. None the less, I am aware that there are strongly held concerns about this issue and I confirm that, ahead of Report, the Government will consider options for Parliament to scrutinise decisions taken either at the time of or after the exercise of the transfer powers. I hope that this of some reassurance to the noble Lord and ask that his amendment be withdrawn.
Lord Fox (LD)
My Lords, I thank the noble Lord, Lord Sharpe, for his support for these amendments and I was pleased to hear the closing part of the Minister’s statement. We all want the costs of any nationalisation to be well managed; we are looking for those costs to be well understood in advance of any commitment by the Government on behalf of the people of this country. We look forward to those discussions and I beg leave to withdraw Amendment 7.
Lord Wigley
“(2A) In assessing the “public interest” in regard to the exercise of transfer powers relating to a steel undertaking located in Wales, the Secretary of State must consult the First Minister of Wales before exercising such principal transfer powers.”Member’s explanatory statement
This amendment is to ensure that the UK Minister and the First Minister of Wales work together in taking forward transfer powers which involve a steel undertaking in Wales.
Lord Wigley (PC)
My Lords, the amendment proposes inserting a new subsection (2A), which provides that:
“In assessing the ‘public interest’”—
which is the whole dimension underpinning the Bill—
“in regard to the exercise of transfer powers relating to a steel undertaking located in Wales, the Secretary of State must consult the First Minister of Wales before exercising such principal transfer powers”.
This is surely basic common sense, since many, if not most, of the responsibilities impacted by such transfers in Wales rest with Senedd Cymru. These powers include economic development, town and country planning, roads, education and training, and the environment. Each one of these may, and almost certainly will, be impacted by the consequences of transfer decisions.
To those who argue that responsibility to co-operate already exists, I say that, if that responsibility is spelled out in the Bill, it would trigger an earlier and more thorough approach. Otherwise, it would be so easy to treat such dialogue and mutual action as an afterthought when it should be a cast-iron statutory requirement.
This brings me to the associated Amendment 19. Clause 50 provides powers to the Secretary of State
“to modify law in connection with … property transfers”.
Clause 50(3) is very serious as it provides for retrospective legislation. This should always trigger alarm bells, in whatever context it arises. As many of the legislative responsibilities that might be impacted by this are fully devolved to Senedd Cymru, any such regulations must be made only with the prior agreement of Senedd Cymru. This must be included in the Bill, otherwise it would be open to a Pandora’s box of utter chaos.
Amendment 19 specifically provides a route to avoid such consequences by requiring the prior agreement of Senedd Cymru to any such regulations that involve devolved powers. Including this in the Bill would avoid misunderstanding and unhelpful polarisation, so I beg to move Amendment 9 and would like to hear the Minister’s response to both it and Amendment 19.
Lord Fox (LD)
I will be very brief and speak with some support for the noble Lord, Lord Wigley. As far as I can tell, the Bill does not require legislative consent from either Cardiff or Edinburgh. Perhaps the Minister could confirm that. If it does not, the principle set out by the noble Lord, for both Wales and Scotland—I know that there may be industrial differences, but the two things apply—would be very important. I look forward to hearing what the Minister says in that regard.
Lord Hunt of Wirral (Con)
My Lords, I very much echo what the noble Lord, Lord Fox, has just said, and I thank the noble Lord, Lord Wigley, for his amendments, which raise very important points. There are considerable concerns about what is happening at steel plants in Wales and the consequences for the workers, their families and the much wider community. It is right that, where these powers may affect a Welsh steel undertaking or devolved responsibilities, Wales should be properly involved. I urge the Minister to respond positively to the concerns so rightly raised by the noble Lord.
Lord Leong (Lab)
My Lords, in this group of amendments, the noble Lord, Lord Wigley, has raised important concerns about the ways in which the Bill includes the Welsh Government and legislature in decision making. Amendment 9 would amend Clause 2 on the public interest so that the Secretary of State would be required to consult the First Minister of Wales before exercising the principal transfer power in relation to an undertaking located in Wales.
The Government have been keen to engage closely with the devolved Governments throughout the passage of the Bill, and I am grateful for the approach taken by all parties in that engagement. I am delighted to inform your Lordships that the Scottish Parliament granted its legislative consent to the Bill on 23 June. I record my thanks to Ministers and officials who worked swiftly to complete the legislative consent process ahead of the Scottish Parliament’s Summer Recess.
I am happy to confirm that the Government will ordinarily consult the relevant devolved Ministers if it is likely that the principal transfer power will be used in relation to a steel undertaking with its principal place of business in Scotland, Wales or Northern Ireland. If this is not possible because swift action in the public interest is required, Ministers will engage with their ministerial counterparts at the earliest opportunity following the exercise of the principal transfer power. I also understand that my colleagues, Ministers and the Secretary of State for Wales will meet their counterparts in the Welsh Government tomorrow to discuss the Bill further.
Amendment 19 would require the Senedd to give approval to any proposed use of the modification power that would relate to devolved regulations. Again, I am sympathetic to the sentiment of this amendment and reassure the noble Lord that the modification power in Clause 50 is targeted and limited to applications necessary to ensure that transfer powers can be exercised effectively. It is not a general power to amend legislation. The drafting does not permit any changes to other laws unless they are for the purpose of ensuring that the powers in the Bill can be exercised effectively.
Although I cannot agree with these amendments, I reiterate the Government’s desire to continue engaging closely with our partners in the devolved Governments. In particular, the Government are continuing to discuss the Bill with the Welsh Government, and I hope to be able to provide noble Lords with further updates later in the Bill’s passage. However, I ask the noble Lord to withdraw his amendment.
Lord Wigley (PC)
Well, well, well—I thank noble Lords for their positive responses. I thank the noble Lords, Lord Fox and Lord Hunt, and indeed the Minister, for the tone and content of their support for the principles here, if not the exact wording on the Order Paper. I noted with interest the ongoing discussions with colleagues in Cardiff and that there are further discussions about to take place. If, arising from those discussions, the Government feel it is appropriate to tweak the Bill to cover those points, I am sure that would be widely welcomed all round. On the basis of this general positive approach, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to prevent the Secretary of State extending the sunset of the principal transfer powers.
Lord Sharpe of Epsom (Con)
My Lords, I hope that this outbreak of agreement means that the Government will accept my Amendment 12. The Government have repeatedly spoken of a long-term plan for steel—securing private investment, increasing domestic production, safeguarding jobs and creating a viable future for the industry. Against that background, Clause 3 comes as something of a surprise. Earlier, the noble Lord, Lord Fox, indicated that he was somewhat reassured by its presence, but I suspect that its actual terms have escaped his usual vulpine scrutiny. A sunset clause is intended to place a clear limit on exceptional powers, but the Bill allows the Secretary of State to substitute, by regulations, a different period for the two-year limit.
Subsection (4) makes it clear that this can be done more than once. Therefore, in practice, the powers could be extended again and again, which gives no reassurance at all. Two years could become five years, 10 years or longer. That is not a meaningful sunset clause; it is a potentially perpetual sunset clause. It is an indefinitely renewable power.
What does that say about the Government’s confidence in their own ability to secure a viable private sector-led future for British Steel? If Ministers genuinely expect these powers to be exceptional and temporary, why do they require the ability to extend them without any stated final limit? This goes directly to the concerns raised throughout our debates—the risk of open-ended liabilities for taxpayers, uncertainty for investors and a lack of clarity about the Government’s intended endpoint.
The Constitution Committee of your Lordships’ House has considered this point and has been unequivocal. It said:
“The use of delegated powers to bypass sunset clauses undermines their purpose, and sets an unusual and unwelcome precedent”.
It recommended either that the final period of extension be set out in the Bill or that there should be a statutory time limit each time the power is used. This would not prevent the Government seeking additional time when there is a compelling case, but it would require Ministers to return to Parliament with a clear final boundary rather than retaining power capable of perpetual renewal.
Will the Minister accept the Constitution Committee’s recommendations and bring forward amendments before Report? Will the Government set a final limit on these powers and demonstrate that they have genuine confidence in securing a thriving, investible and private sector-led future for British Steel? I beg to move.
Lord Fox (LD)
My Lords, I see the point that the noble Lord, Lord Sharpe, has made, and I commend him for getting past this amendment before 9.21 pm, which is of course sunset.
Lord Leong (Lab)
I thank the noble Lord, Lord Sharpe, for his contribution. I note the Constitution Committee’s comments on this clause in its recently published report on the Bill. The inclusion of the sunset provision demonstrates the Government’s commitment to ensuring that powers remain on the statute book for as long as necessary to serve their purpose. Ultimately, we want to see the domestic steel sector return to a more sustainable and stable state in which government intervention is unnecessary.
As we have said, we do not currently see another use case beyond the possibility of British Steel. Therefore, we hope that noble Lords get their wish and there is no need to extend the sunset period. However, the current geopolitical landscape creates a volatile backdrop for this sector, making it difficult to anticipate what may transpire in the coming months and years. We have therefore built in some flexibility to extend or shorten the two-year sunset timetable if circumstances change. We consider this a reasonable precaution to take.
The drafting ensures that there will be full parliamentary scrutiny of any change to the sunset period through the affirmative procedure, meaning that parliamentarians will be able to test and debate any regulations brought by the Government to extend the sunset period. We anticipate needing to use this extension power only in extenuating circumstances. I therefore request that the amendment be withdrawn.
Lord Sharpe of Epsom (Con)
My Lords, that was a very brief debate, and I am grateful to the Minister for his response, but I am afraid I remain unconvinced. The Government say they want to secure a sustainable private sector-led future for British Steel. But a power capable of being extended repeatedly without any final statutory limit sends exactly the opposite signal. It risks making investors more, not less, cautious about committing capital to the sector. There must be a reasonable period that the Minister can identify and put in the Bill. If the Government genuinely regard these as exceptional and temporary powers, they should be willing to set out a clear limit.
The noble Lord cannot realistically blame external circumstances. There are always external circumstances. This has fallen foul of the Constitution Committee for very clear reasons, which it has set out. Speaking personally and from experience, I think it is unwise to fall foul of the Constitution Committee.
We urge the Government to take seriously the recommendation of the committee and either specify the final extension period in the Bill or impose a statutory limit on each extension. I think we will have to return to this matter at a later stage, but for now I beg leave to withdraw the amendment.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment seeks to require regulations transferring securities of a steel undertaking to be subject to the affirmative procedure.
Lord Hunt of Wirral (Con)
My Lords, Amendment 13 makes regulations transferring securities in a steel undertaking subject to the affirmative procedure. Amendment 14 makes regulations transferring the property rights or liabilities of a steel undertaking subject to the affirmative procedure. Amendment 15 makes regulations on continuity obligations subject to the affirmative procedure. Amendment 18 in this group makes enforcement regulations subject to the affirmative procedure. I will begin by referring to those amendments but speaking to the question of whether Clause 50 should stand part of the Bill.
This clause gives the Secretary of State a very broad power to modify primary legislation, secondary legislation and common law in connection with a share or property transfer. It may be used retrospectively and, in some circumstances, before Parliament has had the opportunity to approve the regulations. These are considerable powers, particularly when we are discussing property rights, contractual rights and the compulsory transfer of businesses and their assets. My noble friend Lord Sharpe of Epsom has already referred to the report of the Constitution Committee, and he speaks from personal experience of knowing the dangers of ignoring the recommendations of that committee. The committee is pretty clear about Clause 50, and I will quote from its report:
“We recommend that the broad power granted to the Secretary of State in Clause 50(1) to modify the law in relation to share or property transfer by regulations should either be removed or significantly tightened to specify the circumstances in which such law may be modified”.
I believe that the Government should take that recommendation seriously.
The Government’s delegated powers memorandum sets out at some length why Ministers believe that a broad power may be needed. It refers to the complexities of company law, insolvency law, commercial law and supply chains, and the possibility that an obstacle to a transfer may emerge unexpectedly. A compulsory transfer may well give rise to legal complications, but the memorandum does not provide concrete examples of the circumstances in which primary legislation would need to be disapplied or modified. If those circumstances can be identified, they should be placed in the Bill, or at least the power should be more tightly defined.
On Amendments 13 and 14, the Government’s own delegated powers memorandum confirms that the transfer powers in Clauses 4 to 29 are subject to the negative procedure. That is a very wide suite of powers. They not only concern the initial transfer of shares or property but include the legal effect of those transfers, continuity arrangements, the conversion and delisting of securities, the position of directors and senior managers, licences, termination rights, foreign property and supplemental onward, reverse and connected transfers. Amendments 13 and 14 focus on the central powers, the compulsory transfer of securities and the compulsory transfer of property rights and liabilities. Those are the acts by which the state takes control of a private business, or part of one.
Lord Fox (LD)
My Lords, I have to say I was a bit grumpy when the Conservative Party tabled these amendments that we had tabled in the Commons, but in retrospect I am very pleased. No joking—that was a tour de force from the noble Lord, Lord Hunt. This is his specialist area, and that was his best speech on Henry VIII that I have heard. All the points were points that I would have made except that I am not good enough to have made them, so in that respect I am glad that he was the person proposing this, rather than I. The only thing that stops the noble Lord from being risen to the pantheon is that, having won affirmative powers, he and his colleagues never actually exercise them through fatal Motions. Frankly, that is the only flaw in what we have just heard.
I countersigned Amendments 13 to 15 and 18 but my pen ran out when we got to Clause 50 stand part. All the points that the noble Lord made are valid. I hope the Government are able to take on board both what he said and what your Lordships’ committees have said about the shortcomings in this draft.
Lord Leong (Lab)
My Lords, before I turn to the amendments in this group, I thank the members of the Select Committee on the Constitution for their report on the Bill, which relates to this grouping. The report recommended that in Clause 47 the provisions for dispute settlement should be set out more fully in the Bill. The approach to drafting here is in line with existing precedent under the Banking Act 2009 and reflects the approach taken for similar powers, such as enforcement powers. We think it is appropriate to provide for dispute settlement on a case-by-case basis through regulations.
Noble Lords have tabled a number of amendments relating to parliamentary scrutiny of and procedure on the transfer regulations. In particular, the noble Lords, Lord Sharpe and Lord Hunt, have tabled amendments which would change the parliamentary procedure for the principal share and property transfer powers, continuity obligations and enforcement powers from negative to affirmative. I understand the concern expressed by the noble Lords. From the outset, I reassure all noble Lords that the Government take parliamentary scrutiny extremely seriously. For that reason, we have ensured that a number of substantial powers in the Bill, such as the compensation and tax powers, are subject to the affirmative procedure. However, the Government consider that changes to the procedure for transferring powers would adversely affect the Government’s ability to effect a smooth transfer where necessary in the public interest.
Steel is fundamental to the UK’s industrial base and our national resilience, making it critical to secure supply. Any delays, especially in a non-consensual transfer, would prevent the transfer from taking place, particularly if the transferer was unco-operative. I draw noble Lords’ attention to the recently published report from the Delegated Powers and Regulatory Reform Committee, which did not raise any cause for concern about these powers, including the level of parliamentary scrutiny attached.
To set out the necessity for the negative procedure for these powers, I will discuss them in turn. I will address Amendments 13 and 14 together as they seek to amend the procedures for the share and property transfer powers respectively. It is important that the principal transfer powers can be exercised with speed and operational and legal certainty. The Government expect that, if these powers were exercised, it would be in a fast-moving, commercially sensitive situation. The affirmative procedure would introduce a substantial delay, creating a vacuum in ownership. Such uncertainty would significantly affect the business, particularly the supply chains and third-party contracts.
Amendment 15 seeks to amend the procedure for continuity obligations. The continuity obligations in the Bill are essential to ensure that the company continues to operate as normal following the transfer, minimising disruption and maintaining operations at the steel undertaking. This is achieved by imposing obligations on residual steel undertakings and their group companies to ensure that all services and facilities required by the transferred business continue to operate as normal. Any changes to the procedure would affect the effectiveness of the transfer. The Government’s primary objective with this provision is to ensure a smooth transfer of ownership. As I have set out, it is imperative that there be no delay to any transfer of a steel undertaking into public ownership.
Amendment 18, in the name of the noble Lord, Lord Sharpe, aims to amend the procedure for enforcement regulation. Clause 45 gives the Secretary of State the power to make provision in regulations for the enforcement of obligations under the share and property transfer regulations. As with the other amendments, if the Government consider it necessary to enforce obligations, they must do so at pace. Any delay in using these powers risks interrupting the transfer process and reducing its effectiveness.
For those reasons, the Government do not consider these amendments necessary. However, I have reflected on the argument made by the noble Lord, Lord Hunt. While it is critical that the Government are able to preserve their ability to enforce as necessary, there is a reasonable rationale for further parliamentary scrutiny. I cannot accept this amendment but I will consider this issue further, ahead of Report.
The noble Lords, Lord Sharpe and Lord Hunt, have given notice indicating their intention to oppose Clause 50 standing part of the Bill. That would remove the modification power in Clause 50. This power is not taken lightly, but it is a necessary measure to ensure that the transfer powers under the Bill can be used effectively. The clause has precedent because the same power was used in the Banking Act 2009 to resolve complex companies in the financial sector. Given that the transfer powers would be used only in circumstances where a public interest test was met, it is crucial that the Government have the necessary tools to ensure that any such transfers can be implemented effectively to deliver the intended outcome.
The powers in Part 1 of the Bill interact with commercial, company and insolvency law. This is the law that normally governs the consensual acquisition of companies or of their businesses. The legislative environment is therefore varied and complex and, because general legislation was not designed with compulsory transfers in mind, as the Bill envisages, there will be some tension between applying the Bill’s powers to a steel undertaking and the highly complex private law that it will inevitably cut across. The clause therefore provides a necessary power to modify other laws that may ordinarily interact with a transaction of this nature in order to integrate the Bill’s powers into the existing legislative and commercial landscape.
The use of the modification power is limited to the purpose of enabling the transfer powers to be used effectively. It is not a general power to amend legislation; it is targeted and limited. It cannot be used in isolation from the use of powers in respect of a particular steel undertaking to amend or disapply laws, and it cannot be used to amend the Bill—or Act—itself. In the absence of these powers, there is a real and significant risk that the Secretary of State could not fully and effectively implement a transfer. This could result in an ineffective or incomplete transfer to public ownership, affecting a company’s ability to continue operation. If a smooth transfer is not achieved, the public interest aims could be undermined.
I turn to the potential retrospective effect of the power. The Bill permits it to be applied retrospectively but does not require it. Preserving the possibility of applying this power retrospectively anticipates circumstances in which the transfer powers may need to be exercised at pace and in which there may be limits on the ability to conduct the level of due diligence necessary to support acquisition. Similarly, it may not be possible to identify all legislative interactions in the transfer scenario before making a transfer. This may mean that any secondary legislation made under the transfer powers may not fully affect the transfer that was intended. In such circumstances, it would be necessary to address this through the modification power, with the modification backdated to the time of transfer. The use of the power will be subject to the affirmative procedure unless there are particular circumstances that justify the Secretary of State proceeding on an affirmative basis, likely due to time pressures.
I hope that I have provided some clarity on the need to include the provision, and its retrospective effect. For these reasons, I respectfully ask that the amendment be withdrawn.
Lord Fox (LD)
On a number of occasions, the Minister has painted a picture of a breathless process, where all the organs of government have to operate at breakneck speed. Taking the Government at face value, we are talking largely about a particular asset that we have been talking about for around 15 months, since the discussion at Easter last year. At some point, perhaps not at the Dispatch Box but when we are having our meetings, the Minister will explain why there is this predisposition to putting everything in place to have things moving at the speed of light when, in reality, they have been moving relatively slowly.
Lord Leong (Lab)
I am happy to give that commitment in our further conversations.
Lord Hunt of Wirral (Con)
My Lords, I am grateful to the noble Lord, Lord Fox, not only for his generous praise, which I felt was completely undeserved, but for his support. At some stage, this great Chamber of ours will consider better ways to deal with secondary legislation. He will know that I gave quite a lot of support, when I chaired the Secondary Legislation Scrutiny Committee, to one of his noble friends who moved that there should be a new Bill—the Statutory Instruments (Amendment) Bill. But that is for another occasion. In the meantime, I thank the noble Lord for his strong support.
There is clearly much now for the Government to consider, in particular in view of the commitments made by the Minister. How do we achieve the right balance between acting swiftly where necessary and, at the same time, ensuring that Parliament has a meaningful role in scrutinising powers, particularly where they affect property rights, liabilities and commercial arrangements? I am sure these issues will merit further discussion as the Bill progresses. For the present, I beg leave to withdraw the amendment.
Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026
(1 day, 4 hours ago)
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Lord Whitehead
That the draft Regulations laid before the House on 14 April be approved.
Relevant document: 58th Report from the Secondary Legislation Scrutiny Committee, Session 2024–26
The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)
My Lords, I thank the House for its consideration. The draft Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026 were laid before the House on 14 April.
This instrument makes the necessary regulations under the Climate Change Act to include emissions from the UK share of international aviation and shipping in the sixth carbon budget, all subsequent carbon budgets and the 2050 net-zero target. It formalises the Government’s long-standing planning assumption that the sixth carbon budget, starting in 2033, will be the first to include emissions from the UK share of international aviation and shipping. This has been the position of successive Governments. In 2021, the previous Government set the sixth carbon budget, factoring in the UK’s share of international aviation and international shipping. It also reflects the advice of the independent Climate Change Committee.
This debate is not about whether we take action in these sectors—we already are. The Government are committed to ensuring that long-term growth in the aviation and shipping sectors is compatible with our climate obligations. We have been working multilaterally to reduce aviation and shipping emissions within the International Civil Aviation Organization and the International Maritime Organization. We are now formally reflecting this effort in our domestic legal framework.
For earlier carbon budget periods, international aviation and shipping were not formally included in our legally binding targets. Instead, we left headroom, setting tighter limits for other sectors in order to deal with the assumptions of being in those targets in general. We are now revising this approach by legislating to formally include these emissions in the overall emissions limit from the sixth carbon budget onwards.
Accounting for international aviation and shipping emissions within the formal framework is clearer and more flexible than accounting for them outside the framework. It allows the Government to choose the best overall pathway to meeting our targets. For example, if progress in reducing aviation emissions is faster than expected, it will make it easier to meet our targets overall. Equally, faster progress in other sectors could allow more flexibility for international aviation and shipping.
Although aviation is a hard to decarbonise sector, we are already taking great strides towards greener aviation. This includes implementing the sustainable aviation fuel mandate last year, providing a further £219 million to scale up SAF production through to 2030, and up to £2.3 billion over 10 years for the Aerospace Technology Institute to support the development of more efficient and zero-emission aircraft technologies. We are also driving cost-effective decarbonisation through carbon pricing mechanisms, including the UK emissions trading scheme, or UK ETS, and the global offsetting scheme, CORSIA.
We are also committed to decarbonising shipping through the UK maritime decarbonisation strategy, investment in clean maritime technologies and support for low-carbon fuels. The UK is proud of our leadership at the International Maritime Organization, ensuring the sector contributes fully to our net-zero ambitions while maintaining the UK’s competitiveness as a global maritime nation.
To note, this statutory instrument does not alter the stringency of the UK’s climate targets, introduce new sector-specific limits or set new policy requirements for the aviation or shipping industry, and nor does it alter the climate considerations in the draft Heathrow expansion national policy statement. What it does provide is legal clarity—something colleagues in the Environmental Audit Committee and the Transport Select Committee have called for repeatedly. Successive Governments have pledged to legislate for this change as soon as parliamentary time allows; now we are keeping our word.
I recognise the amendment tabled by the noble Lord, Lord Moynihan, for discussion today. The noble Lord raises two points of concern, which I shall address in turn. First, the noble Lord regrets that the draft legislation does not define a methodology for accounting for the UK’s share of international aviation and shipping emissions for the purposes of carbon budgets. That omission is for good reason. Not prescribing a specific methodology now allows for continued methodological development in the period before the sixth carbon budget period commences—that is, in 2033. That will be in line with developments in international carbon reporting practice, in which the UK participates in ongoing discussions. That has to be an international discussion with the international agencies responsible for getting that right on an international scale. I am sure that the noble Lord would not wish to tie the Government to an outdated methodology, out of sync with wider international practice. It is not that there is no methodology; it is a question of making sure that the final methodology is fit for purpose when the sixth carbon budget comes in.
That final methodology will be determined separately by the Secretary of State before laying the first annual statement of UK emissions for the sixth carbon budget period. In the meantime, I refer the noble Lord to the technical annex of the Government’s carbon budget and growth delivery plan, which sets out the Government’s working assumption on defining a UK share of international aviation and international shipping emissions when setting and making policies for future carbon budgets. If the noble Lord wants to cut to the chase early, I suggest that he refers to paragraphs 125 and 126 of the technical annex to do just that.
Secondly, the noble Lord suggests that the regulations will place additional costs on industry. As I noted earlier, this is an accounting change that clarifies how emissions are counted within UK targets; it does not set new policies for international aviation and shipping. The Government will continue developing policies to reduce emissions in international aviation and international shipping, and these will be subject to their own assessments.
Notwithstanding that, I emphasise that the Government are acutely aware of the importance of international aviation and international shipping to UK economic growth. We are committed to pursuing solutions that do not risk displacing emissions to elsewhere in the world or damaging UK competitiveness, working closely with industry to ensure that our high climate ambition is deliverable and affordable for them and passengers. Indeed, schemes such as the sustainable aviation fuel mandate are carefully designed to protect against excessive cost increases. At the same time, measures such as the Sustainable Aviation Fuel Act and grant funding will tackle barriers to investment and support UK manufacturers to gain a share of the growing global advanced fuels industry, with all the economic benefits that entails.
I urge noble Lords to consider these points when and if they consider voting in favour of the amendment tabled by the noble Lord. The measures formalise an approach supported by successive Governments and reinforce the credibility of the Government’s strategy for aviation and shipping decarbonisation, both domestically and internationally. I beg to move.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank the Minister for introducing today’s regulations. I know my noble friend Lord Moynihan is disappointed not to be here for this debate—the second one in a week on an instrument that we all believe will be deeply damaging to the economy. He offers his apology as he has to attend a long-standing political appointment to which he is committed. I declare my interest as the unremunerated chair of Eq.flight, working towards the development of nuclear-derived sustainable aviation fuel.
This House voted to regret last week’s instrument due to the nationwide effects that it will have on our economy and our way of life. Although this week’s is not quite so wide-ranging, we regret that the Secretary of State is taking his economic wrecking ball to two specific industries.
Before I speak to the economic impact that this statutory instrument and other associated measures the Government are taking will have, I first note that the implementation of the instrument raises concerns. The Explanatory Memorandum states:
“The exact methodology for determining the UK’s share of IAIS emissions for the purposes of measuring and reporting emissions from CB6 onwards will be determined separately by the Secretary of State, and before laying the first annual statement of UK emissions for the CB6 period”.
The Government are putting the cart before the horse.
International aviation and shipping will be expected to comply with regulations to help the Government reach their net-zero target without being told how and even when their emissions will be measured. But I note the Minister’s explanation of the methodology of the calculation of emissions for carbon budget 6 period.
This is becoming a worrying trend within the department. Two weeks ago, my noble friend Lord Moynihan rightly pointed out that the legislation brought forward to implement the RO to Exchequer policy in Northern Ireland was done without a comparable offer having been agreed with the Northern Ireland Assembly. Now, entire industries are to be expected to comply with net-zero policies without being told how to do so. Regardless of the policy’s aim, that is not how to instil business confidence in the Government’s plans. I hope that the Minister can today outline when we can expect to see the accounting methodology and more generally reassure the House that the department takes the practical implementation of policy as seriously as it does the principles behind it.
On the economic impact, this instrument is merely a formalisation of the Government’s recent drive to ensure aviation and shipping compliance with net zero. It will set into statute the adverse effects that government policy is already having. By carbon budget 7, shipping emissions are projected to have been reduced by more than 60%, at a net cost of more than £1 billion annually. This is to be done primarily through fuel switching. To incentivise this transition away from carbon-intensive fuel, the Government have extended the UK ETS scheme to the sector, at an up-front cost of more than £0.25 billion. That is despite the fact that alternative fuels still cost four times more than conventional fuel, while there are only two shore power facilities in the country.
The industry has said that these shortfalls would be manageable if the Government set out a clear revenue recycling plan to reinvest ETS proceeds into maritime transition, but they have yet to do so. The result is that the ETS scheme will operate as a tax rather than as a decarbonisation incentive for the industry that moves 95% of the UK’s goods. I hope that the Minister can outline how net zero-derived revenue will be recycled back into these industries in his response.
Similarly, the aviation industry will be forced to transition not through economic incentives but through state-mandated demand management. CB7 states that the supposed cost savings that net zero will bring the sector will come almost entirely through a reduction in demand operating capabilities. This will not happen naturally, but through “demand management” that will
“increase ticket prices, either directly through taxes or indirectly through technology costs”.
That is a highly unnatural market distortion. The industry will be forced to invest in net-zero technology, and if that fails in reducing emissions to the Government’s desired extent, they will simply raise taxes. This too is expected to cost over £1 billion annually by CB6.
These regulations incorporating these sectors into carbon budget accounting will now present an incentive for future regulations upon them. My worry is that aviation and shipping will now be seen as fair game to be sacrificed for the Government’s rushed drive to net zero. Given that the impacts of current regulations have already been highly damaging, I hope that the Minister will be able to reassure us that the regulations are entirely formal and that these sectors will not be subjected to future punitive measures.
Lord Teverson (LD)
My Lords, though it has been far from perfect, I would like to start by congratulating the Prime Minister on what has happened over climate policy over the last two years. Unfortunately, he seemed to forget it in his speech in Downing Street, but perhaps we could put on the record that the last coal-fired station was closed; onshore wind has started again; we have carbon budget 7 agreed; the future homes standard at last has been published; solar capacity has gone up substantially; and we had a very successful AR7 round in comparison with AR6. I was disappointed that the Prime Minister failed to mention these matters when he talked about his resignation in Downing Street last week.
What strikes me, remembering the Climate Change Act itself back in 2008, pretty well everybody around the House regretted at that time that it was pretty well impossible—for all sorts of technical reasons and where we were in terms of the start of this process—to include international air transport and international shipping. It was seen as a hole in the system that needed to be repaired as time went on. So, there we were, back in 2021, when the carbon budget 6 was agreed under the previous Government and they took that step on the Carbon Budget Order 2021 to put this into practice at last. Hallelujah from all of us who had been waiting since 2008 for that to happen. I congratulate the last Government on achieving that.
It is a shame that there seems to be this regression in terms of appetite to make sure that the climate for our children and grandchildren is on the mend rather than degrading from here. Let us be clear: we are kidding ourselves if we believe that this sector can be left out of our equations. It accounts for something like 10% of carbon emissions in terms of our own emissions, or part of them, and globally—much more for airlines than for shipping, but both are important and both are growing, which is the important thing. As we know, if you do not measure it, you cannot manage it, and if you do not manage it, it will not happen—and it needs to happen. These are important sectors.
To the Front Bench of the Opposition, I say that this is one of the occasions when we are liberated from the European Union. This is a Brexit win: in terms of airlines, the European Union still relies on the Coursier scheme, mentioned by the Minister, which is the offsetting system that the EU has been part of. We welcomed it as well, apparently, but it is a system that is far from perfect: much better that we include it within these systems ourselves.
I agree entirely that we have big challenges in terms of sustainable aviation fuels. There is a lot to do there and we certainly cannot grow crops to get us out of that problem.
Baroness Hayman (CB)
My Lords, it is a pleasure to follow the noble Lord, Lord Teverson. I agree very much with the final point that he made. I find many things depressing at the moment in reactions to issues of climate change, but one of them is the lack of enthusiasm about British innovation. We can grow the green economy; we can tackle climate change; we can tackle emissions; and we have the intellectual firepower and the companies and the individuals who are interested in doing that. Yet here we are tonight with a perfectly reasonable proposition being put to us by the Minister to approve these regulations. I will not be insulting and say it is a bit of process-ology, but it is part of a process, and it is a process that has been going on for a long time.
It is certainly not new news. It was announced in April 2021, nearly four Prime Ministers ago, by the then Conservative Government when the noble Lord, Lord Sharma, was our COP 26 president-designate, and when the atmosphere and the cross-party consensus on the need to change and to make progress was very much accepted. So what we are debating here tonight in terms of the regret amendment is something that has been agreed for many years—decades, actually—that has been accounted for in our forthcoming carbon budgets, and that industry has known about for many years. As I say, it is not new news.
I know that the noble Lord, Lord Turner, who I think could not be here this evening, would be telling us that he discussed this issue when he was chair of the CCC over 15 years ago. I look forward to hearing from the noble Lord, Lord Deben, as a more recent chair.
I understand that the methodology is not yet perfect, but the Minister clearly explained why it is sensible to allow ourselves some room to develop it and, I hope, for it to be widely adopted by others. However, it makes no sense whatever for aviation and shipping to be left out of our carbon budgeting. They are important areas; progress is being made and we should be leading in what they are doing, not cavilling. At the moment, the rest of the UK economy is captured under our carbon budgets. Although there have been many arguments about the benefits and disbenefits and the pace of transition, I have never heard it said that the simple act of having carbon budgets has imposed cost on any industry. What they will do is place a legal requirement on the Government to ensure that these industries, alongside all the others, reduce their emissions. We have already legislated in the Sustainable Aviation Fuel Act to get started here. Enshrining this in law will create the legal certainty that businesses need, especially after the political upheaval of recent years, to invest and innovate.
I am tempted to say, “Nothing to see here”. I see the Whip would like me to sit down, so I end by saying that, if we do need to have a vote, which I consider unnecessary, I would certainly support the Government.
Baroness Jones of Moulsecoomb (GP)
I am very annoyed that the Government and the Opposition keep talking about sustainable aviation fuel. That is a nonsense; it does not exist and it never will. However, I will direct most of my remarks at the regret amendment, which is ludicrous. I cannot even believe we are debating something like this. It is climate-denying nonsense. It is time that everybody understood and read up on the science. We have just had record temperatures for June and could easily be into the hottest year ever recorded. We cannot sit and talk about the economy being more important than the human ecosystem that the economy is destroying. We have to make the economy different.
Here is a better suggestion for debate. We could start naming those heat domes that sit over Europe in the way that we name hurricanes and storms. We could call them “Exxon”, “Texaco”, “BP”, or after any other highly polluting fossil fuel company that created them. We talk about the economy—what do you think will happen when we have the consequences of flooding, heatwaves and droughts? Do you seriously think that will benefit the economy? It absolutely will not. Insurance companies will be hit hard, food supplies will devastated and I will still be calling you clods.
Today, we heard a really anodyne, supercilious answer from Defra about the dangers to our food supply and food security—“No, it’s fine; it’s all sorted out. You don’t have to worry your pretty little heads about it”. That is absolute nonsense. Our food supplies are threatened. If we do not do something about it, we will be very hard hit. The Government are not warning the public about food supplies and food security; they are not moving fast enough. I spoke today to Tim Lang, a professor of food policy who wrote a report for the National Preparedness Commission that has still not been implemented. I suggest that the Government get on it very fast, as well as the Opposition so that they can attack the Government when they do not move fast enough.
I despair that, next year, climate deniers will be saying exactly what this regret amendment says and I will be standing here saying the same thing I am saying now. We will not have moved forward. We will not have made ourselves safer. We will have an economy that is slowly disintegrating because of the impacts of climate change. If we do vote on this ridiculous amendment, can we please all vote against it?
Lord Deben (Con)
My Lords, I remind the House of my declared interests and the fact that I was for 11 years chairman of the Climate Change Committee, appointed, reappointed and extended by Conservative-led Governments.
What is being proposed today was presented by the Conservative Government. My noble friend who spoke here supported that with me. I heard nothing explaining what has suddenly changed. This is just like last week. The Opposition are constantly putting forward these things without explaining why they have changed their view from what was the concerted view of every Conservative Government going back to the speeches that I used to write with Lady Thatcher.
Let us realise that this was a Conservative proposition and that the Climate Change Committee proposed it because it is a necessary way of explaining what will happen once we get the methodology right. Of course, we have to get the methodology right with the IMO and the international aviation authority. That is a perfectly reasonable way to do this. Had a Conservative Government been doing this a few years ago, they would have done exactly the same thing. There is no need for us to argue about it.
This is 10% of our emissions. It is not acceptable to come to this House objecting to what the Government are doing without an alternative. If you are not going to do this, you have to say that you will do something else. I exclude the noble Lord, Lord Moynihan of Chelsea, from this, because he has never believed that climate change is something that you need to fight. That is his position. He is entirely wrong, although we will listen to him, but he is not blameworthy. I think the Opposition are blameworthy, as they are coming forward without an alternative for what we need to do.
The reality is that this could become the largest-emitting sector if it is left out. It is stupid to leave it out. You need to have it in and help the industry get through and make its proper contribution. You cannot ask agriculture or manufacturing to make their contribution if you are not asking the aviation and shipping industries to do so. Only last week, the noble Lord, Lord Moynihan, was complaining that he thought we were sending emissions abroad and shipping them here. This is one of the things we have to get right to meet the proper complaint that he made.
I have to say to my noble friend that, if this is an economic wrecking ball, it was one created by the Conservative Party. This is what we did—and thank goodness we did, because it is not an economic wrecking ball. It is a means of enabling this country to play its proper part in ensuring that our children and grandchildren have an economic system of any kind. This general comment about how difficult things are ignores the fact that we are facing an existential danger. Thank goodness that the voices who speak out on that side, including the Pope with Laudato Si’, and all those who really bother about the future of our society and our children, are making it very clear that we have to make these changes.
This is a very modest thing for the Minister to have brought forward. I have real complaints about the Government not moving quickly enough, but I am very pleased that they have moved as quickly as they have. It is not acceptable to argue about these issues unless you have an alternative, particularly when what is being proposed is something you yourself put forward.
The Lord Bishop of Manchester
My Lords, it is a privilege to follow the noble Lord, Lord Deben, on matters of climate change. The way he spoke with such passion and wisdom is an example of this House at its best.
Climate change presents the greatest collective action problem of our age. Every nation would prefer others to act first, which is why strong climate leadership matters. I found myself challenging the Government for not doing enough earlier this afternoon in Committee of the Financial Services and Markets Bill, so I want to commend these regulations tonight.
Emissions from aviation and shipping have grown rapidly over the past 20 years. According to the Climate Change Committee, as the noble Lord, Lord Deben, has just said, aviation emissions are projected to become the largest sector by 2040. Legislating specifically to incorporate these industries into carbon budgets is, therefore, the fair and proportionate thing to do. These regulations are not introducing new sector limits or altering targets. As the Government have already said, they are fulfilling prior commitments set out in carbon budget 6, which has already been legislated for, and carbon budget 7.
Embedding these commitments in legislation empowers the Government to hold these industries to account for their emissions. It sets a clear example to other nations of our commitment to international climate goals. Omitting aviation and shipping from carbon budgets would weaken the credibility of our climate framework and damage our position when it comes to international climate diplomacy, which is so important.
Earlier today, in Grand Committee, one noble Lord sought to persuade us—if I understood the argument—that, because there are other nations with a worse record than ours on combating climate change, it would be detrimental to our competitiveness, and therefore a mistake, for us to take carbon emissions seriously. Britain’s role in the world should never be to seek to win some unsavoury race to the bottom.
Turning to theology, if I may, most serious modern Christian theologians—including the Pope, as the noble Lord, Lord Deben, has just referred to—have long discarded the old argument of dominion. At its least pernicious, this assumed humans could disregard our impact on the environment because God had given it to us to exploit. At its worst, often among ultra-conservatives in the USA, it positively encouraged exhausting the planet’s resources in the belief that destroying our environment would hasten the return of Jesus Christ. Those views may be less often publicly stated now than 20 years ago, but I fear their malevolent presence still lurks behind some of the most vehement opposition to limiting carbon emissions. We are not the planet’s despotic overlords; we are a part of creation. We have a responsibility, as others have said, to pass on to future generations a world as beautiful as the one we inherited.
We are already witnessing, as the noble Baroness, Lady Jones of Moulsecoomb, has reminded us, the effects of climate change through fluctuating weather patterns, pressures on food production and more extreme climate events. As time goes on, it will be the most vulnerable, those experiencing poverty and the generations after us who will feel the effects most strongly. This lunchtime, I was at the Trussell Trust food bank in Hammersmith and Fulham for the launch of a much-needed inquiry into the need for food banks, for which I am a member of the panel.
The rapid increase in prices of basic foodstuffs over recent times, so impacting on our poorest sisters and brothers, is a direct consequence of the increasingly extreme weather climate change we are already experiencing and which, last week, we lived through. If noble Lords had been trying to take a service wearing fancy robes on Sunday in Manchester Cathedral, they would be very much on my side.
The window of opportunity for action is quickly closing, but these regulations present an important step towards ensuring that every sector fairly plays its part in meeting our climate commitments. I commend them.
Lord Hunt of Kings Heath (Lab)
My Lords, it is a pleasure to follow the right reverend Prelate. Like the noble Lord, Lord Teverson, I very much welcome the regulations themselves; they have been a long time coming, but it is good that we are now including aviation and maritime within the sixth carbon budget. It is going to be challenging, and I certainly understand the need for flexibility in methodology. The Committee on Climate Change has set out some of the challenges we are going to face, but that we should do it I am absolutely convinced.
This debate follows last week’s rather dispiriting debate, when the Conservative Opposition essentially turned their back on net zero and on any concern about climate change. In criticising the Government last week, the noble Baroness and the noble Lord, Lord Moynihan, said nothing about the impact of climate change and nothing about what they would do in relation to net zero.
The Commons debated last week’s and this week’s SIs together, and I read the debate. The shadow Energy Secretary, Claire Coutinho, made not one mention of what the Conservatives would do to mitigate or adapt to climate change. Instead, her sole response was to get rid of carbon tax and repeal the Climate Change Act—as noble Lords here will know, we were the first country to establish a long-term, legally binding framework. Are the Conservatives really serious about wanting to axe this landmark piece of legislation? In 2019, they beefed it up with commitments on net zero under the noble Baroness, Lady May, and the last Conservative Prime Minister stated that energy transition and net zero were among the greatest opportunities facing this country.
We come back to the issue of economic growth. I thought that the noble Baroness, Lady Jones, was absolutely right: the real catastrophe to prosperity and economic growth is climate change, not the actions we are taking to try to mitigate and adapt to them. Noble Lords will have read the CBI report that came out a couple of weeks ago, looking at the green economy. It is massive. It is one of the only sectors which is really growing in this country, and we can add aviation and maritime to that. We now have a £105 billion net zero sector and 1.1 million full-time equivalent jobs—and they are good-quality jobs as well.
The issue of other countries taking advantage of the UK taking leadership is absolute nonsense. There is huge advantage to the UK in being a key player in a net-zero economy. We know from the work of the International Energy Agency that actually, despite what some leaders say, many countries are speeding on with a transition to net zero. We need to be part of that, and aviation and maritime need to be part of that. So I very much support the statutory instrument. Tonight, we are seeing that, around the House, there is a strong consensus in favour of dealing with climate change and moving to net zero as fast as we can.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I declare my interest as chair of InterTrade UK, which is beginning a piece of research on ports and connectivity between Northern Ireland and Great Britain. We believe this is an important piece of work, given what has happened in terms of the Windsor Framework.
I will concentrate my remarks on the shipping industry and the lack of methodology, which has been referred to by most of the speakers. That is not a criticism; it is just that I think there are things that need to be put on the record when it comes to adopting a methodology to deal with shipping, particularly in relation to Northern Ireland. As further carbon and climate policies are introduced, it is important that His Majesty’s Government recognise Northern Ireland’s specific circumstances and ensure that the cumulative impact does not disproportionately disadvantage businesses and consumers that rely on maritime services. Around three quarters of goods entering or leaving Northern Ireland do so by sea, meaning that additional costs imposed on shipping are borne ultimately by the exporters, importers and, of course, consumers. Does the Minister and the Government recognise that Northern Ireland has particular geographic and economic circumstances which should be taken into account when the methodology is adopted in relation to shipping?
The existing UK ETS recognises this. It has a 50% concession for Northern Ireland-Great Britain ferry routes. Of course, there is a zero concession for the Highlands and Islands, which we would say should apply to Northern Ireland as well. The existing UK ETS comes into effect this week, on Wednesday 1 July. Maintaining that concession for the industry is a priority and, despite the concession that the UK ETS implementation gives to Northern Ireland traffic, it will add £9 million annually in additional costs to the shipping industry.
It is important that the Government continue to monitor the real-world economic consequences. I hear voices saying that we should not be worried about them. Well, frankly, I am worried about economic consequences for Northern Ireland. There is no stand-alone economic impact assessment of this SI, but given Northern Ireland’s reliance on maritime services, its geography and economic circumstances, it would be very helpful to all if the Government would undertake a dedicated economic impact assessment for Northern Ireland, perhaps in conjunction with the Northern Ireland Assembly, because decarbonisation must be of course environmentally sustainable but also economically sustainable. As the Government pass decarbonisation into law, we must ensure that climate policy does not inadvertently undermine our economic competitiveness across the UK, including, in this instance, in relation to Northern Ireland.
I note from the Secondary Legislation Scrutiny Committee that both the Scottish and Welsh Governments have laid legislation to include international aviation and shipping in their carbon budgets. Can the Minister say what has happened in relation to the Northern Ireland Assembly?
Lastly, in his opening remarks, the Minister said that there will be flexibility between the different sectors impacted by this. Will there also be flexibility within the sectors—in other words, within international aviation and shipping—given our unique position in the United Kingdom? I welcome the debate on this issue and look forward to the Minister’s response.
Lord Moynihan of Chelsea (Con)
My Lords, I have three brief points to make and three questions for the Minister, and I hope in speaking to avoid the hysteria noticeable in some speeches this evening.
My first point is that this whole ETS approach is yet another failed attempt at “We know best”. I could give many examples, but perhaps the most interesting recent one is that with the recent collapse of scenario RCP 8.5—on which much of the climate catastrophists’ claims have been based in the past couple of decades—and with the complete collapse as being agreed as no longer plausible, those catastrophist claims can now be seen as disinformation. That is a good reason for the noble Lord, Lord Deben, to understand why change is needed. By 2050, despite the “net zero” words, 50% of aviation fuel will still be fossil fuel. Again, so-called clean fuels, as the noble Baroness, Lady Jones, so eloquently said, are not at all carbon zero. Does the Minister agree that the whole ETS is built on shaky foundations and is better off abandoned?
My second point is that the ETS market itself is a confected artefact. The intent was to create a free market in carbon. In fact, it is all government controlled and that is the direct opposite of a free market. In the end, and at the moment, 100% goes to government, so it is just another tax. It does not reduce carbon generation; it just transfers it to another country. Economic activity here is lower; economic activity elsewhere is higher. Does the Minister accept that the ETS is, in essence, another way of generating tax to “pay for more benefits”, in the words of one of his own MPs?
My third point is that it ends up as yet another hit to economic activity in the UK. Net zero has already hollowed out the economy. Adding ETS for aviation and shipping just worsens it. The ETS carbon price has gone from £34 to £70—so there is a cost, despite what the Minister claimed. Refineries have spent some £175 million on ETS and aircraft operators have spent over £200 million. There is a cost to all this. Our economy suffers, while not a dent is made in global carbon emissions. In India they recently increased their number from 74 to 164 airports, and they are adding another 50—there is no ETS there. Will the Minister agree that charging the ETS on aviation and shipping further damages our four remaining refineries, the only manufacturing entities that incur this in the UK, further accelerating the deindustrialisation of our nation?
Earl Russell (LD)
My Lords, I thank the Minister for introducing these regulations and all those who have spoken.
Extreme heat records and regret amendments appear to be competing with one another for frequency at the present time. Last week, the UK broke the record for the hottest June day three days in a row, reaching 37.3 degrees Celsius on Friday. Six NHS trusts declared critical incidents, and the London Ambulance Service recorded its busiest day in its entire history, with demand higher than even at the peak of the Covid pandemic. Europe is the fastest-warming continent on earth, and forecasters are warning that future heat events are likely very soon. I find it genuinely difficult to hear arguments that we are doing too much, too fast on climate change.
I will say something about the politics before turning to a couple of comments for the Minister. I want to return to the cross-party consensus on these issues, but I will first challenge the unravelling of our climate policy. When I hear calls from some to repeal the Act, abolish carbon taxes and cut renewable subsidies, with no credible alternative offered in their place, it becomes very hard to sustain the view that opposition to every government climate measure is made in good faith. If the Conservatives challenge settled climate policy, they should expect a response.
The challenge put today, and in our last debate, by both the noble Lords, Lord Hunt and Lord Deben, was: if not this then what? The policy assumption underlying these regulations was not made by this Government. It was made, as others have said, in April 2021, by the then Conservative Government, announced personally by Prime Minister Boris Johnson, who declared that the UK would set what he called the most ambitious targets to cut emissions in the world. That Government confirmed explicitly that the sixth carbon budget would incorporate the UK’s share of international aviation and shipping emissions as an important part of their decarbonisation efforts. These regulations do no more than formalise that commitment in statute. The Conservative Party supported this policy in government; the question before this House is simply whether to honour it.
I want to be clear about what this instrument does and does not do. It introduces no sector-specific limits, no levies, no charges and no cuts to aviation or shipping. It is an accounting measure. It formulates a framework already assumed in policy since 2021, and we are pleased to see it. If we exclude aviation and shipping from our accounting, we do not make those emissions disappear; we simply allow them to consume a disproportionate share of the UK’s available carbon removals and offsets, at the direct expense of agriculture and heavy industry.
I have two comments for the Minister. First, on methodology, I really appreciate the way the Minister set that out. I recognise the need for international negotiations and that those are also complicated at the moment. I simply seek a reassurance that we will continue to work internationally on these issues, and that the Government will continue to engage with the aviation and shipping industries to give them a formal role in that process. On economic impact, I similarly call on the Government to continue to monitor the impact of this and to continue to work with industry to make sure that this system and these processes are as streamlined as possible.
The honest answer to the noble Lord’s concern, introduced by the noble Baroness, is this: a clear framework actually helps these industries by giving investors the certainty and legal clarity needed, as the Minister said, to back sustainable aviation fuels and green maritime technologies. Uncertainty is the enemy of investment; these regulations reduce it. They fulfil a commitment made by a Conservative Prime Minister, have passed the Commons already and align with our Climate Change Committee’s advice. I support them and I urge the House not to support this regret amendment.
Lord Whitehead (Lab)
My Lords, I thank all noble Lords for their valuable contributions to the debate. I am greatly buoyed up by the tremendous speeches in support of this measure. It has restored my faith that this House is facing the right way on climate change and is behind measures to tackle climate change and get us to net zero. That is great.
In that respect, I recognise that I was gently chided by the noble Baroness, Lady Hayman, for being rather proceduralist in my first comments. I would like to put that right now by saying hurrah! We now have this on the statute book. It is something that the noble Lords, Lord Teverson and Lord Deben, and many others—including me—have been banging on about for many years. It always seemed that it was a terrible gap in our armoury to fight climate change that we were apparently allowing international aviation and international shipping to have a free pass as far as climate change contributions were concerned. In those days, it was partly because people could not think of how to do it easily.
The noble Baroness, Lady Bloomfield, underlined the point that we are not discussing methodology because we cannot think of what to do but because there is a still emerging and developing consensus across the world in the negotiations with the international aviation authority and the International Maritime Organization on exactly how this can best be done—not that it cannot be done, but to get it right.
As far as aviation is concerned, it is a question of getting a point-to-point arrangement, where your contributions are relevant for the outward flight and someone else’s contributions are available for the flight back. How to establish the point-to-point arrangement internationally and make it work within each country that agrees it is part of the discussion that is going on with the international aviation authority.
As far as shipping is concerned—and this is relevant to the contribution made by the noble Baroness, Lady Foster—we are now talking about international shipping coming into climate change arrangements. Obviously, domestic shipping has been in there for a while. The noble Baroness and I were engaged in an interesting discussion just recently about exactly how Northern Ireland gets treated as far as domestic shipping is concerned and the particular circumstances for Northern Ireland. As the noble Baroness said, they have led to a half-price arrangement for Northern Ireland shipping so that it is not disadvantaged compared with Republic of Ireland shipping.
There are things already that can be put into place in terms of taking account of particular circumstances. But the particular thing that has to be taken account of as far as international shipping is concerned is the fact that ships do not go to one place and then back to another place; they go to multiple places around the world. So how do you get a fair arrangement for what international shipping is paying in? You go through international bunkering arrangements and things such as that, but there is still some work to do in getting that absolutely right.
It is right that we do not put something down now on a statutory instrument and that we make sure, along with our international partners, that we have got this right on an international basis. This has to be done on an international basis to make sure that people do not escape or get out of their obligations and that it is fair to people all round. That demonstrates that this is clearly not a wrecking ball to UK industry. Indeed, as the noble Lord, Lord Deben, mentioned, if it was a wrecking ball, it would have been a wrecking ball firmly in the middle of the last Conservative Government’s arrangements for the economy, because that is what they did at the time.
It is not a wrecking ball because it will be fair to everybody. This will be the basis on which international aviation and international shipping will continue. There will not be people who get a free ride on the back of it. It will be fair shares for everybody. That is why it is important that we get the methodology right.
I do not think I need to go on a great deal about the rest of this SI, because noble Lords have made such a good case for it this evening and I do not need to add to it. If I have missed anything out in my contributions, I will write to the relevant noble Lords.
I do not agree that ETS is a method of tax raising. It is in the form of a tax, but it works with the market rather than against it to distribute properly how those contributions can be raised. It makes the cost of high-carbon activities higher than that of low-carbon activities—that is one of its purposes. However, it is not unfair taxation for particular groups of people or economies; it is a fair, market-based method of ensuring that the move towards a low-carbon economy is distributed among all people.
This measure should be passed by consensus among everybody in this Chamber. It is so important that that consensus is maintained. It was embedded in the Climate Change Act originally and has provided stability, certainty and credibility to our framework. These regulations do not raise our ambition or weaken it but ensure that it is applied consistently. I therefore urge noble Lords to support these regulations and, in doing so, uphold the United Kingdom’s status as a global leader in tackling climate change. Should this matter be put to a vote, I would urge that this Chamber vote solidly against the idea that there should be a regret amendment attached to it.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank all noble Lords for their contributions to this important debate and genuinely take note of their comments.
It is the speed of the rush to net zero that is harming our industry. I accept the entirely correct focus of the noble Lord, Lord Hunt, on the 1.5 million jobs and the contribution to the economy of the burgeoning green economy. However, these Benches are united on the focus needing to be on cutting energy bills. Our grandchildren will equally never forgive us if we destroy our economy with high energy prices. That must be a concern for us all. We currently have electricity prices which are four times higher than those of the US. That is the issue that we need to address.
Let us not ignore warnings from Tony Blair, who said that the net-zero policies being pushed forward are “unaffordable, ineffective” and “politically toxic”, or Gary Smith of the GMB, who recently said that the policies being pursued by the Government are “economic madness”. Even Unite the Union said:
“No ban without a plan”.
These points are worthy of consideration because the North Sea issue is very important. While everyone was distracted by Makerfield, an important referendum was, in effect, being undertaken in Aberdeen South. It was an overwhelming rejection of both measures in these climate change carbon budget regulations and the Government’s currently policy on the North Sea, which is referred to.
Having said all the above, I beg leave to withdraw the amendment standing in the name of my noble friend Lord Moynihan.