Westminster Hall

Wednesday 2nd September 2026 Westminster Hall

Wednesday 2 September 2026

[Dawn Butler in the Chair]

EU Membership Referendum: Impact on the UK

Wednesday 2nd September 2026 Westminster Hall

09:30

[Pete Wishart (Perth and Kinross-shire) (SNP)]

I beg to move,

That this House has considered the impact of the 2016 EU membership referendum on the UK.

It is a pleasure to serve under your chairship this morning, Ms Butler. May I also congratulate myself on securing this debate? It came as a bit of a surprise to me. I thought that there would be an overwhelming clamour to secure a debate to celebrate the 10 years since the Brexit referendum. I thought people would be tripping over themselves to ensure that they could tell us about all the wonderful things that have happened. It would have been an opportunity to go wandering through the sunlit uplands to celebrate the dynamic economic growth and political stability that had been secured, the fact that immigration was under control, and all the wonders of our new-found freedoms.

Do you remember, Ms Butler? We were going to have our cake and eat it, we were going to secure the easiest trade deal in history, and of course we were going to take back control. From the lofty heights up there in the sunlit uplands, we could have peered down and admired all the shiny new hospitals that we had managed to build because of the £350 million we had saved weekly from the evil and wicked EU. Perhaps, in a more reflective moment, we could have thought back and wondered why we ever put up with those bendy bananas, the vacuum cleaners that lacked that extra Brexit suction, or EU lightbulbs that would not even light, and about how, thank goodness, the existential threat to the great British sausage had been removed and Brexit had saved us from all the barmy Brussels bureaucrats.

There are some anniversaries that we look forward to, such as birthdays and weddings, and some that invite solemn reflection, such as the end of wars, the passing of great men and women, and great historical events. Then, of course, there is the Brexit referendum anniversary, which somehow feels so different from all the other things that we mark. Brexit is a rather extraordinary anniversary to celebrate.

[Andrew Rosindell (Romford) (Reform)]

Will the hon. Gentleman give way?

[Pete Wishart]

I will just finish this point. It is 10 years since we embarked on what has turned out to be one of the most self-defeating exercises in political and economic self-harm inflicted in modern political history—a bizarre, destructive and economically illiterate political project that has made everybody in this country so much worse off. On that note, I give way to the hon. Gentleman.

[Andrew Rosindell]

I am very confused. The hon. Gentleman seems passionate about independence for Scotland, so why does he not believe in independence for the whole United Kingdom?

[Pete Wishart]

I can assure the hon. Gentleman within a second that I am all for independence—but not for the bizarre notion that keeps on coming up that membership of the European Union means automatically losing independence. Tell that to the French, the Germans, the Italians or any of the other members of the European Union, who as far as I am concerned pretty much enjoy their own independence. That is what we want to do in Scotland.

In the 10 years since the Brexit referendum, we have had seven Prime Ministers. Even a new Labour Government with a majority of 172 have not been immune from the instability of the Brexit era, barely making it to the two-year mark before they had to replace their first Prime Minister.

Let us turn first to the economy. I am grateful, as always, to the House of Commons Library, which produced an excellent briefing for this debate. I really encourage colleagues to have a look at it. It is remarkably clear about the broad economic evidence. There is now substantial and significant consensus that the UK economy is smaller than it would have been had we remained in the European Union.

[Llinos Medi (Ynys Môn) (PC)]

My constituency has one of the busiest roll-on roll-off ports, in Holyhead. There has been an announcement regarding passport requirements for travel between the UK and the Republic of Ireland. Teithiau Elfyn, a local tour company, has warned me of the serious economic impact of such short-notice announcements. Does the hon. Member agree that the Brexit agreement has not worked for the people of Ynys Môn or Wales, and has had a negative impact on the economy?

[Pete Wishart]

This hon. Member more than agrees with the hon. Lady and thoroughly endorses what she says. It is not just Ynys Môn or Wales; every part of this United Kingdom has been impacted and hurt by this crazy project.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

My hon. Friend is making a humorous speech about bananas and sausages that is making me hungry. Yesterday, the new Prime Minister spoke of wrong turns going back as far as the 1980s. There is a wrong turn he could do something about, because the EU reset that the previous Prime Minister promised was a disaster. He gave away 12 years’ access to our waters in Scotland in return for very little. In fact, when the coastal and fishing growth fund was disbursed, there was a pittance for Scotland. Does my hon. Friend agree that, if the Prime Minister is serious about undoing wrong turns, he should have the courage to do something about Brexit?

[Pete Wishart]

I am grateful to my hon. Friend because he brings us right up to date in the debate about Brexit. I listened carefully to the Prime Minister yesterday and what he had to say about European Union membership. I want to come on to that because we are at an important juncture. We have new opportunities to go forward, and I hope that this new Labour UK Government make the right choice. I will come to that, so I ask my hon. Friend for his patience, which I know he will be able to supply me with.

I want to get back to the economics. It is now estimated that GDP is anything between 2% and 8% lower than if we had remained in the European Union. The Office for Budget Responsibility suggests a 4% reduction in productivity, and Goldman Sachs estimates that the UK economy is around 6% smaller than it would otherwise have been. I want to be clear: that does not mean that Britain suddenly became 8% poorer on the morning of 24 June 2016. Of course, Britain continued to grow, and we have experienced some economic growth. The argument is that the UK has grown less than it otherwise would have done. Brexit was never going to be a spectacular economic crash. If anything, it is more insidious than that. Brexit is more akin to a slow puncture. The economy keeps growing, the car keeps moving forward, but the driving gets tougher as we negotiate in a harsher environment.

[Mr Gregory Campbell (East Londonderry) (DUP)]

On the economy, does the hon. Gentleman remember, as I do, the weeks before the referendum, when we were told amid all the scaremongering that if we voted to leave, house prices would decline by 28%? They did not. We were also told that unemployment would rise, but it did not. Does he recall those scaremongering headlines?

[Pete Wishart]

Indeed I do. They were almost as ridiculous as the extraordinary claims that were made about what would happen if we left the European Union, from the £350 million saved per week to the claims about bendy bananas and sausages. They were absurd, and the hon. Gentleman is right that it was a poor debate, but he cannot disagree with the evidence from the House of Commons Library and all the major financial institutions that Brexit has been an economic disaster. I do not think anybody could possibly disagree with that basic statement.

I will come on to trade, because that is equally important. The OBR assumes that Brexit will ultimately reduce UK imports and exports by around 15% relative to the scenario had we remained in the European Union. Again, that does not mean that our exports have literally fallen by 15%, but the additional barriers created by Brexit mean we trade less than we otherwise would have done.

That matters because the European Union is still by far our largest trading partner. In 2025, the EU accounted for 41% of our exports of goods and services and around half of our imports. So much for the idea that we would effortlessly turn our back on Europe and replace all that trade with new deals around the world. Yes, of course, there have been useful, good trade deals with the likes of New Zealand, Australia and India. They have benefits, but they barely touch the sides of the trade relationship we already had with the European Union.

[Cat Eccles (Stourbridge) (Lab)]

In Stourbridge, Brierley Hill and Netherton we have been negatively impacted by the effects of the steel strategy and by measures brought in by the EU such as tariffs and quotas. Does the hon. Member agree that if we had a closer trading relationship with the EU, constituencies like mine and likely his would be far better off?

[Pete Wishart]

Most definitely. I thoroughly agree with the hon. Lady. It is hard to think of any sector that has not suffered as a result of our leaving the European Union. She is right to reference the steel sector, although it could be any sector. I am pretty certain that today we will hear quite a lot about how leaving the EU has disastrously impacted so many sectors throughout the United Kingdom.

I want to get on to immigration. How do we start to deal with the subject of immigration? It is perhaps the saddest but funniest part of the whole saga. Immigration was supposed to be the one thing that Brexit would fix. That seemed to be the whole point of it: it was about taking back control and stopping uncontrolled immigration. But what did we find? Immigration skyrocketed and reached the extraordinarily high level of 1.47 million in the year to March 2023.

Without a doubt, leaving the EU closed the door to EU immigration. Net migration from the EU has been negative since June 2022. The conveyor belt of talent that had been coming to the UK for the best part of the past two decades was stopped. After closing off Europe, we quickly discovered that we actually quite liked having EU people working in all our different sectors, from hospitals to farms, hotels, restaurants, universities, care services, businesses, the City and our creative sector. We all found that we actually needed people from the EU and people quite liked employing them.

[Phil Brickell (Bolton West) (Lab)]

As secretary of the all-party parliamentary group on Germany I spend a lot of time meeting German businesses that want to invest in this country. One issue that comes up time and again is exactly the point that the hon. Gentleman has made about business mobility and persuading German boards to invest in British companies to grow the economy, and one constraint on that is the ability of German professionals to come here. Does he recognise that point, and will he join me in paying tribute to Ulrich Hoppe, the director general at the German-British Chamber of Industry and Commerce, who does formidable work trying to resolve some of these issues to support the British economy?

[Pete Wishart]

I join the hon. Gentleman overwhelmingly and enthusiastically. He is absolutely right. It is hard to think of a sector that has remained untouched by the fact that we cannot access European talent. It is a problem for hospitality and restaurant businesses in constituencies like mine, and in the City, where many dynamic figures helped build some of the success stories that we see just a few miles from where we are today.

Before Brexit, there was barely a small boat sighted in the channel, and now we are told that that is perhaps the single biggest issue that confronts this country. Various Prime Ministers and Home Secretaries have come up with a variety of different wheezes to try to stop those small boats coming to the UK, but all have been hampered because we left the one international agreement that might have dealt with returning some of those people to the European Union. When we left the European Union, we also left the Dublin III regulation—the one thing that might have achieved some of the ambition that people had about stopping small boats.

Then there is the irony that Brexit did not just make it harder for Europeans to come here; it made it harder for us to move around Europe, too. British citizens are now third country nationals in their own continent. We can still travel across Europe, of course, but there is now a 90-day limit in a rolling 180-day period. For ordinary holidaymakers who have been away enjoying the sun, that might mean nothing more than the huge queues that we have seen in some airports across Europe—a minor inconvenience, perhaps—but for businesses it means more red tape, more restrictions and more unnecessary difficulties.

For those in my former profession—musicians, performers and other creative professionals—it can mean a bewildering collection of different rules about work permits, visas, carnets and documentation. Brexit has been such a destructive and invidious political project that it has even managed to stop the music moving freely. This Labour Government gave a commitment that they would fix that. We are talking about ambitions, so come on, Minister: stop the Brexit imposition on music. Let the music move freely again. Let the current generation of musicians enjoy the opportunities that I had as a musician. Who knows, we might even have the Prime Minister on a European tour if he manages to get it fixed!

[James Naish (Rushcliffe) (Lab)]

Over the summer I was with a constituent who, while celebrating the UK Government’s recent music strategy, recognised the hon. Gentleman’s point about the significant challenge of getting into Europe. Fifty-nine per cent of UK musicians say that touring in Europe has become unviable. Does the hon. Gentleman agree that it is unacceptable that British musicians and other touring artists face barriers that did not exist pre Brexit? Would he encourage the Minister to look seriously at accelerating improvement in this area?

[Pete Wishart]

Absolutely. We have had this issue for seven or eight years. I remember securing the first urgent question when it was recognised as a problem. We have had a long time to fix it. I see that the Minister is taking notes; one thing he could reassure the House on is that the music will move. Get it moving, because there is no reason why it should be stuck behind the English channel.

We are told that all this is happening—and I am afraid to say that we are going to hear it again today—because it is the wrong type of Brexit. Who knew? Apparently, it was the wrong deal. Variously, it was the wrong Government—the wrong everything—but the hard Brexiteers got everything they wanted. They got everything they asked for and more: no customs union, no freedom of movement, no single market, no European court jurisdiction, no EU institutions and no going back. What we have now is not an accidental form of Brexit that just happened to emerge out of the ashes. It was everything that they fought for decades to achieve. The conclusion is that there is no magic Brexit. There is no Brexit where we get all the benefits of membership without the obligations. There is no Brexit where we have frictionless trade without accepting that the rules are necessary for frictionless trade. There is no cake and eating it.

Lastly, there is the extraordinary position of this Labour Government. They know that Brexit is an absolute and utter disaster. There is no getting away from it. The evidence is right in front of them. I listened to the Prime Minister yesterday, and he was absolutely right to reference Brexit as one of the biggest issues that has damaged this country in the last 10 years. They know that our relationship with our largest trading partner is fundamentally broken, but they have tied themselves up in knots with these unnecessary and useless red lines. Instead of actually fixing the problem, they continue to tinker around the edges. There is a little veterinary agreement here, a little customs improvement there, a bit of mutual recognition, a bit of youth mobility, a bit of this, a bit of that—a bit of a big fat nothing, because that is what it is.

The Government have their reset plans, which I am pretty certain is what the Minister will almost exclusively tell us about, but they are nothing more than the same old tinkering.

[Andrew Rosindell]

Will the hon. Gentleman give way?

[Pete Wishart]

I have given way to the hon. Gentleman already. Sorry, but lots of people wish to speak.

None of the Government’s plans solves the real problem, which is getting back into the EU. The British public are so far ahead of them on this, it is almost unbelievable. Rejoining the EU is by far the most popular option when presented to the British public. According to Ipsos, 58% of voters would back rejoining the bloc, with almost half supporting a new referendum after the next general election. Only 33% think that the UK should stay out. If only the Government had that in their manifesto, they would be an absolute shoo-in to continue in government maybe not just for the next Parliament, but for the one after that.

Not everything that has gone wrong in the UK in the last 10 years is down to Brexit—of course not. We have had covid, the war in Ukraine, the energy crisis, inflation and 14 years of the chaotic Tories to help make matters much worse. But Brexit is a slow puncture rather than a spectacular crash, and since 2016 we have had to navigate the increasingly difficult terrain of all these international difficulties with a flat Brexit tyre.

Brexit was sold as a moment when we would open our doors and regain our freedom, but all we have done is secure more paperwork. We were told that we would take back control, but immigration has skyrocketed to record levels. We were told that Brexit would free us from Brussels bureaucracy, but we have only created our own UK bureaucracy to deal with leaving the Brussels bureaucracy.

Perhaps the best thing that we can do today is remember what was promised and what was achieved. We in Scotland most definitely remember. We remember back in another referendum—the referendum on Scottish independence—being told that the only way to secure Scotland’s EU future was to vote to stay within the UK Union. What happened to that? Brexit has been an utter disaster. It is a shameless project that has made everybody worse off. Let us reflect on that again, and hopefully in 10 years’ time we will be back in the European Union enjoying the prosperity that we deserve.

[Several hon. Members rose—]

[Dawn Butler (in the Chair)]

Order. I remind Members that they need to stand if they would like to participate in the debate. I will impose a hard three-minute time limit. Please be mindful of your comrades if you take interventions.

09:51

[Brian Leishman (Alloa and Grangemouth) (Lab)]

It is a pleasure to serve with you in the Chair, Ms Butler. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate.

The behaviour of the right-wing media outlets that peddled the views of their billionaire owners about the Brexit referendum was a perfect example of the wealthy and powerful influencing our politics and, ultimately, striving to maintain the existing class structure of our country. Much of the multimillionaire and billionaire class saw the Brexit referendum as a business opportunity and, through the media, they latched on to and exploited the despair that many working-class communities felt.

It is incredibly frustrating that politicians refuse to accept why millions of working-class people voted for Brexit, but it really should not take too much analysis. Communities felt demoralised and desperate, and people needed something to change—so much so that they grasped on to the notion that leaving the European Union was the answer to improve their lives. I do not blame them, because places have been asset-stripped and abandoned. MPs arrogantly preaching to people that they were wrong to vote for Brexit will not cut through in marginalised communities. That only drives people into the political extremes of the right.

[Seamus Logan]

The hon. Gentleman seems to be suggesting that the public were misled by the information provided to them about Brexit. Does he agree with that?

[Brian Leishman]

That is a reasonable, candid and honest assessment, and I agree with it.

It is up to us, now that we are in government, to raise living standards and give people faith and hope. If we do that, the spivs and speculators of Reform and Restore will be rejected. So I say to the Minister: can we properly analyse why right-wing parties are convincing people that they are the ones who will turn people’s lives around? They are conning people again, even after the lies that they told about Brexit.

Referendums have a vital place in our democracy, but let us acknowledge that they can create uneasy bedfellows and awkward alliances. The impact of that is clear when I look at the fortunes of my Scottish Labour party. I am afraid that Scotland is still dominated by the constitutional question. Painting everyone as either nationalist or Unionist has distracted Scots from the real political issue that affects us: whether you are from Alloa or Aldershot, Stenhousemuir or Stoke, politics is always about class. Class must be put back on the political agenda. Many people back home do not know what we in Scottish Labour now stand for or who we stand with. We must appreciate that campaigning alongside Tories, who did so much damage to Scotland, was seen as a betrayal of our class.

If we ever want a Scottish Labour Government in Holyrood again, we must appeal to what was once a large chunk of our Scottish Labour vote, which has found its political home in the Scottish National party. Do we not see that competing for just a small, diminishing Unionist vote is swimming in shallow, crowded waters and will never lead to us being in government again? I am not saying that we should back independence, but we should lay out the democratic route to having another referendum. If we do that, we will be speaking to a huge number of Scots who left us. Who knows? They might even listen to us again.

Scotland needs to break the constitutional deadlock and Scottish Labour needs to shift from a position of dogged inflexibility, otherwise we are heading for the irrelevance of perpetual opposition. That would mean we would never be able to put Labour values into a Government that Scotland so desperately needs.

09:55

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Ms Butler. I thank the hon. Gentleman for Perth and Kinross-shire (Pete Wishart) for securing this debate. He and I know that we will not agree on this subject, but we are good friends and Gaelic cousins. I appreciate his point of view; my point of view will be very different.

Ten years ago, the people of the United Kingdom made a historic sovereign decision to leave the European Union. They voted to take back control of our laws, borders and cash, but as a proud Unionist and staunch Brexiteer, I stand here to declare that the impact of the referendum is uncertain because the job is not yet finished. There is still work to be done.

I will outline some of the issues in Northern Ireland. The Windsor framework does not fix the problem; it institutionalises it. It leaves a border in the Irish sea, dividing us from our biggest market and tearing at the economic and constitutional fabric of our country. How can we say we have fully left the EU when Northern Ireland is still subject to laws that it has no say in making and that are judged by a foreign court? How can we say that we have taken back control when our hard-working farmers face losing half their vital veterinary medicines simply because Brussels dictates what can and cannot cross the Irish sea? That is a fundamental denial of democracy.

How can we talk about the result of the vote when it is a constitutional outrage that our own Government’s ability to support British businesses in Northern Ireland is legally handcuffed by European competition courts through a ban on state aid? How can we talk about the vote and the UK when every time a consumer in my Strangford constituency picks up a pint of milk stamped with “Not for the EU” they are looking at a badge of foreign interference in our internal UK market?

True Brexit means Brexit for the whole of the United Kingdom, not just for the mainland of Great Britain. We have been trapped in a dynamic alignment. If the mainland innovates and cuts red tape, Northern Ireland is legally forbidden from joining them because we are chained to the EU customs code. That is not the best of both worlds; it is economic partition.

[Mr Gregory Campbell]

Does my hon. Friend agree that a classic example of that, which we had some time ago, was when companies selling plants and seeds in Great Britain could not supply them to Northern Ireland, but people could buy them here and take them over on a plane? That was all down to the Windsor framework and the subsequent hash that Governments have made of the Brexit vote.

[Jim Shannon]

I absolutely agree. I was going to come on to that issue, but he has done it for me so I will leave it at that.

The hon. Member for Perth and Kinross-shire is a friend of mine, but we fundamentally cannot agree on this issue. I believe in accepting a democratic vote, not ignoring it. When we believe that we know better than the people, it is no longer a democracy; it is a dictatorship. Hon. Members are allowed to hate that result, but they are not allowed to overrule it without due process. We need to finish the job that the people voted for in 2016. That means removing the Windsor framework, stripping away the remaining vestiges of EU interference and fully restoring the internal market of the United Kingdom.

We must solidify our precious Union. We are undeniably stronger together; I am sure my friends in the SNP and Plaid Cymru will take note of that. Our economic, cultural and political bonds are what makes this nation great. Our focus must be on strengthening the ties between Belfast, Edinburgh, Cardiff and London, not managing an artificial barrier forced on us by Brussels. Let us stand firm, deliver on the full promise of 2016 and secure a truly United Kingdom of Great Britain and Northern Ireland for generations to come. We are always better together.

09:59

[Joe Morris (Hexham) (Lab)]

It is a pleasure to serve under your chairship, Ms Butler. Before I start, I echo the comments of my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) on the media’s conduct in the referendum.

I will touch briefly on the issue of music. I was speaking recently to an orchestra member who is active in my local party over the weekend about the issues that he has experienced with touring, and to a local venue operator who used to welcome musicians from Europe to Northumberland. It supported our tourism sector and supported the exchange of ideas. It enhanced opportunities for young people to see the world beyond the north-east. It is a crying shame that we have lost not just the ability for our musicians to go abroad, but the ability to welcome people into our areas to play in some of the iconic venues of the north-east.

Given the time allowed, I will focus my remarks on trade deals and the way that the agricultural community has been treated in those trade deals—in particular, the impact of leaving the EU and the now complete absence of scrutiny of those deals. We no longer have any appropriate democratic input into how those terms of reference are agreed and how civil society can properly feed into them. When we were a member of the European Parliament, we at least had a methodology, however imperfect, for agreeing those terms of reference, bringing them forward and making sure that farmers had a seat at the table when those trade deals were being agreed. Given how the Australian and New Zealand trade deals disadvantaged sheep farmers in my constituency, had there been a meaningful vote or meaningful parliamentary consultation, there is no way that the former MP for my constituency could have voted for that deal with a clean conscience. It is to his shame that he never raised his voice in opposition to it.

I also want to touch on the issue of trade movements, referred to in the introductory speech by the hon. Member for Perth and Kinross-shire (Pete Wishart). I thank him for securing the debate and apologise for forgetting to do so earlier. When the EU brings in bans on products, there is a real risk that those goods are then immediately diverted into the UK because we do not have consistency of policy. I have heard that from manufacturers in my constituency who make furniture: they see lower-quality wood products from China coming in that were originally destined for the EU but, because of a policy shift from the EU, have then been redirected en route into the UK market, with the consistent risk of decimating jobs. Constituency MPs then have to run to Ministers and ask for exemptions and for us to catch up to Europe. We must ensure that we have consistency of approach, not just to safeguard jobs, but to grow economies and give business the impetus and confidence to invest in the long term.

This is a shorter speech than I intended to give, but I would be grateful if the Minister could come back on those two points about scrutiny and consistency of application of trade protection measures.

10:02

[Andrew Rosindell (Romford) (Reform)]

I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for allowing us to debate this issue, 10 years on from the sovereign decision of the people of the United Kingdom to leave a political union—that is the important message that seems to evade most people in this Chamber today. We were not part of a simple trading arrangement: under the Maastricht treaty, which the Conservative Government of John Major signed us up to without a referendum, our sovereignty was handed away to a political union. When my parents voted to join a common market, or to stay in a common market, in the 1970s, that was about free trade; it was about co-operation and working together as neighbours. But over the years it became a political union, and our laws—the laws that we are elected to make—were overridden by a massive unelected bureaucracy in Brussels.

Our trade has to be global—

[Rachel Gilmour (Tiverton and Minehead) (LD)]

It is elected—it is a Parliament.

[Andrew Rosindell]

A Parliament that had no real power, as the hon. Member knows.

Our democracy and our historic constitutional rights and liberties were gradually being eroded. I want this country to be prosperous. The real prosperity in the world today does not come with a diminishing market in the continent. The global market is there for us to grab if we take that opportunity. Unfortunately, the political establishment of this country has failed in the last 10 years to grab the opportunities that being independent has given us.

Those in the civil service, those in government under Theresa May and the establishment in this country did everything they possibly could to derail Brexit. Under Theresa May’s agreement, we would have been half in and half out of the European Union. That would have been a disaster. Fortunately, the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), myself and others voted against that deal, and gave us a Brexit that actually meant something.

The opportunities are there for Britain to take if we choose to do so. The alternative is to go back into a political union and be subjected to rules, laws, regulations, the euro—all the things that come with being in the European Union—and free movement. If the people of Iceland had the good sense to say no, then we should have the good sense to think of the long-term future of our country, retain our independence, never go back to the European Union, but maintain good relations and trade co-operation with our neighbours.

10:05

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

It is an honour to serve under your chairship, Ms Butler. I will talk about the impact of the EU referendum on my part of the UK. In ’99, Cornwall and the Isles of Scilly was recognised as a region in the EU in its own right and granted objective 1 status, reflecting the fact that we were one of the poorest areas not just in the UK but in western Europe. We received over €1 billion in EU funding between 2014 and 2020. Our economy would not have grown as much as it did over the 20 years of objective 1 status without EU money, but the impact went far beyond economic growth.

To give some examples: on trains, we had a passing loop and points put into our train service, which made it much quicker and better; on buses, we set up park and ride; on cars, we had the dualling of the A30. We had an airport funded, which is now floundering. On renewables, United Downs meant our first geothermal power plant was established, while on culture, we had the Hall for Cornwall. In healthcare we had dental and medical schools; we have a combined university campus in Cornwall for the first time. The impacts were huge, and we lost a great deal because of the referendum. Almost everywhere people go in Cornwall, they can see a distinctive—but far too small—blue sign signifying that a building or something else was funded by the EU. That was transformational for us.

In 2016, the leave campaign promised that Cornwall and the UK as a whole would not be worse off. That promise has fallen short. We did get shared prosperity funding from the Government afterwards and, along with the other Cornish Labour MPs, I helped to secure the Kernow industrial growth fund for economic growth, but there is a gap: because of that funding, other Government support dwindled. We are now looking forward to a devolution deal, as the Prime Minister mentioned yesterday, to make sure that some of that capacity and growth is restored.

The impact on our rural communities has been significant, as my hon. Friend the Member for Hexham (Joe Morris) pointed out: particularly on our fishers, who were sold out by the leave campaign, and on our farmers, who had a rocky and uncertain road out of the common agricultural policy and the unhelpful trade deals that we had to deal with. Fortunately, we now have a new land use strategy and the environmental land management deal, and we are working our way out of that. On exports, this Government are looking at a new EU trade and veterinary deal as well.

[James Naish]

I think we need to be really explicit about the impact on farmers. It costs £200 for health certificates on each consignment with physical checks on dairy, fish and red meat. My hon. Friend does a huge amount of work on behalf of her constituents who are farmers, but does she agree that that £200 figure should not be forgotten in debates like this? It is a significant burden on our farmers.

[Jayne Kirkham]

My hon. Friend makes a good point, which I was rushing through due to lack of time. The impact on farmers has been huge in so many ways, particularly with exports and imports. It is really important that the sanitary and phytosanitary agreement takes that into account. We are lucky in that we are hoping for a fast outcome on that agreement, to try to mend some of the terrible damage that has been done to our food sector.

To conclude, perhaps the most pernicious aspect—maybe even more than the financial trauma—was the way that the Brexit vote split us as a society and hardened and coarsened our discourse. Families fell out. We are still polarised, quick to anger and less tolerant. Politicians and the media—all of us, really—had a part to play in that, and that is taking even longer to fix.

[Several hon. Members rose—]

[Dawn Butler (in the Chair)]

Order. To try to fit everybody in, we are going to have to drop the time limit to two and a half minutes. I call Clive Jones.

10:09

[Clive Jones (Wokingham) (LD)]

It is a pleasure to serve under your chairship, Ms Butler. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate.

The Conservatives’ botched Brexit deal, backed by the hon. Member for Clacton (Nigel Farage), continues to burden the UK economy. Back in 2016 he, Boris Johnson and others told us that Brexit would lead to a stronger and more prosperous economy. Today, we are confronting the reality that those promises were misleading, with no substance behind them.

The botched Brexit deal has cost the Treasury billions of pounds in revenue, held back British business and left our young people without the opportunities they need to begin their working lives and careers. As the hon. Member for Perth and Kinross-shire said, Britain’s GDP is 6% smaller as a result of Brexit—a disaster for families across the country.

In my Wokingham constituency, I have heard from businesses that once exported successfully to the EU but, since Brexit, have seen their profits reduced. It is small and medium-sized businesses that have suffered as a result of Brexit. The botched Brexit deal has created almost 2 billion extra pieces of paperwork for British businesses since we left the EU, enough to wrap around the Earth nearly 15 times. That is certainly not the freedom from bureaucracy that the hon. Member for Clacton, Boris Johnson and others promised.

I know from speaking to businesses in Wokingham that they are eager to grow again and to rebuild partnerships with European businesses. That is why the Government should listen to the Liberal Democrats’ call for a growth and defence partnership with Europe. Such a partnership would cut trade barriers, reduce red tape and help businesses to grow. It would boost jobs and incomes while giving the Government more money to tackle the costs of living, strengthen the armed forces, and invest in our NHS workforce and hospitals. It might even help to fund a new Royal Berkshire hospital to serve my constituency.

Beyond the economic benefits, a new partnership with the EU would bring much-needed stability and security. Trump has proved himself to be an unreliable and erratic partner on the global stage, while Putin has shown no signs of halting his expansion plans in Europe. Now is the time for the Government to show ambition and to rebuild security ties with our dependable European allies.

10:11

[Andrew Lewin (Welwyn Hatfield) (Lab)]

It is good to see you in the Chair, Ms Butler, in the first week of a new term. I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing this debate.

Brexit has been an unmitigated failure: our economy is smaller, thousands of UK businesses have stopped exporting to the EU altogether and our position in the world has been diminished. I put on the record my thanks to the former Prime Minister and Chancellor for all the work that they did on a repair job in the first two years of this Government, but, in the brief time that I have today, I will focus on what comes next.

I am pleased to see the Minister in Westminster Hall today and I welcome him to his role. I will talk specifically today about the importance of a youth mobility deal, because a visa-based scheme for 18 to 30-year-olds to allow them to travel freely between the United Kingdom and the European Union is something I have advocated for since my first few weeks in this place, and publicly since April 2025. The Government are in active negotiations with the EU about a youth mobility scheme as we speak. The prospect of such a deal has proven popular with the public; every poll on the subject consistently shows that there is broad support for a youth mobility deal.

However, this is a moment to be courageous and ambitious, because we read in the media that there is a live debate about the number of people who will be subject to a youth mobility scheme—100,000, or slightly more than 100,000. In a context where net migration to the United Kingdom has fallen from a record high of over 800,000 to less than 200,000, I hope and believe that that should give Ministers the space and the confidence to agree an ambitious youth mobility deal.

This negotiation is also a test of our Government’s ability to secure an agreement. Lots of pro-Europeans engaging with this subject and watching this debate want to see our Government engage in something that meaningfully moves our relationship with Europe forward. Achieving a youth mobility deal can be a test of that.

I admire the Prime Minister’s courage in saying that he is going to walk towards difficult issues. With respect to the European Union and the opportunity for a youth mobility deal, I think that he and the Minister can walk towards an opportunity and I hope that they can secure it this year.

10:14

[Dr Ellie Chowns (North Herefordshire) (Green)]

It is a pleasure, Ms Butler, to serve under your chairship.

Clearly, Brexit has been a disaster for Britain—the sooner we acknowledge that, the better our conversations will be, because we will then be able to move forward. It has been economically disastrous. As the hon. Member for Perth and Kinross-shire (Pete Wishart) said, it has been a slow puncture; in fact, it has been a huge slow puncture, taking 4%, 6% or 8% off our GDP, which costs every household in the country enormously in real terms. It makes us all much worse off.

In North Herefordshire, business owners have spoken about the additional barriers they face when trading with Europe and the admin created by the supposed reduction in bureaucracy. Brexit has been an economic disaster, but it is not just economic: environmentally, we are diverging from Europe, and in 28 areas of law, we now have weaker protection for our natural environment. Socially, politically and culturally, Brexit has been poisonous. It has catalysed and reinforced a toxic political debate, leading to polarisation, the proliferation of disinformation, political short-termism, and a discounting of the rights, opportunities and needs of young people in particular. The UK is now poorer, weaker and more isolated in a context in which we have a completely unreliable and unstable partner in the US President, and we have war on the eastern border of Europe with Russia’s illegal invasion of Ukraine.

[Rachel Gilmour]

Will the hon. Lady give way?

[Dr Chowns]

I am sorry, but because of time I will not.

We are also facing the climate crisis barrelling down towards us. All of these issues require stronger co-operation with our closest neighbours. In that context, more than 10 years on from this disastrous wrong turn in British politics—this monumental act of self-harm—it is time to change course. I welcome the noises that the Government have made about resetting. That is certainly a start, but we need to be honest about what we have lost. We need to recognise the importance of co-operation and working together politically as well as economically. We need to recognise that the majority of the British people think that we would be better off back in the European Union, and that is why I believe we need to set out a path to rejoin. The best future for the UK lies within Europe. With the summit coming up, I hope that the Minister will be genuinely ambitious and deep in setting out the path forward.

10:16

[Perran Moon (Camborne and Redruth) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Butler. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate.

There can simply be no argument: Brexit has been one of the most disastrous decisions that the UK has made in modern times. This extraordinary moment of self-harm has irreparably damaged the British economy and society, and for what? There are longer queues at airports, bureaucracy at the ports and hundreds of thousands of boats crossing the channel every year. Let us never forget that there were no small boats before Brexit.

Ten years on, Brexit has perhaps had the greatest impact on Cornwall, as my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) mentioned. Thanks to the tireless campaigning of the late Member for Falmouth and Camborne, Candy Atherton, Cornwall secured objective 1 status from the EU, which greatly supported our economic development according to all metrics. As was mentioned, Cornwall received over £100 million a year, which included support for the Eden Project, Newquay airport, our combined universities, superfast broadband and improvements to the A30. It was a transformational programme.

The Vote Leave campaign promised that not a penny of that funding would be lost. It said that the money we sent to Brussels would be reinvested back into Cornwall, but that promise never materialised, and we are now looking to the Government to reinstate our economic development funding in the devolution deal that the Prime Minister alluded to at the Dispatch Box yesterday.

We have lost not only our objective 1 funding, but the common-sense free trade we once had with our closest neighbours and allies. All told, Brexit has been an unmitigated disaster, and the time has come to rethink and renegotiate a relationship with our nearest trading partners, our allies and friends in the European Union.

10:19

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

As a rather lone voice in this debate, I do not complain that it is not going to be a balanced debate, but somebody has to make the case.

[Jim Shannon]

There are four of us.

[Sir Bernard Jenkin]

Indeed, there are a few of us, but what we are hearing is a group of aggrieved remain supporters who have never come to terms with their grief and remain ideologically committed to rejoining. To anybody who wants to have another referendum, I do not say, “Bring it on,” because that is the last thing the public want, but I say that we would win again. When it comes down to the crunch, the British public do not want to hand back control of our laws to the European Union, and all the polls show that. If we ask them in a poll, “Do you want Westminster or Brussels to control farming policy?”, or whatever policy it is, people always vote for Westminster to maintain control.

[Rachel Gilmour]

The hon. Gentleman will no doubt recall the pleasant experience we had in Odesa recently, with Russian drones almost falling on our heads. Reports from Germany suggest that the recent drone attack on Leipzig airport was indeed coming from Moscow. Does he not agree that dealing with and having a good relationship with our nearest allies is the safest route to our national security?

[Sir Bernard Jenkin]

I totally agree. Defence is a reserved matter for member states in the European Union. The European Union does not have any troops. NATO is the forum through which we operate, and it is NATO to which we should be committed, rather than setting up a rival defence organisation in the European Union.

I will also point out the contributions. According to a table from the House of Commons Library, we were making a gross contribution of £16 billion or £17 billion a year, but, with the rebate, the net contribution was £9.4 billion in the last year of membership. Our latest contribution was £103 million. To all those people who advocate for rejoining or for the reset, where will the money come from? Will it come out of defence or welfare, or will there be more taxation to generate the extra revenue needed once we start making increased contributions to the European Union?

There is also the myth-making. There is a myth that there were no small boats until Brexit—what rubbish. The small boats started in 2018, before we left, and by 2020 there were more than 8,500 crossings. That is not due to Brexit. The Dublin regulation was useless. It was in place during those years and it was never enforced.

I will finish on the question of forecasts, which are all conjectural. They are all based on what the British economy might look like compared with a basket of other economies, including the United States, which has had a huge fiscal stimulus and an AI boom, and has more free enterprise policies. The fact is that since we left the European Union, Wolfgang Münchau, who somewhat reluctantly voted remain, has made it clear that leaving was an economic non-event. We were growing at about the same rate of France and Germany, and we still are. There has been no smashing disaster in the economy. There is a disaster in Scotland, where the SNP is campaigning against reopening the North sea and supports the high energy costs imposed by the ridiculous dash to net zero—the Government are doing that too—but the fact is that we are better off outside the EU in the long term.

10:23

[Ben Goldsborough (South Norfolk) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Butler. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate.

The impact of the 2016 EU referendum is felt particularly sharply in our fields, glasshouses and farming communities. For agriculture and horticulture, leaving the EU has fundamentally changed access to labour. The end of free movement has effectively ended the dependable flow of workers from the EU, on which many growers rely to plant, tend and harvest their crops. The result has been greater complexity and cost, and many farmers and growers cannot afford that cost.

We have replaced the common agricultural policy with the environmental land management scheme and sustainable farming incentive. I strongly support paying farmers to look after the countryside, but we must be honest about the consequences of an all-or-nothing approach. Global shocks have driven up the cost of energy, fertiliser, feed and other inputs. As a result, there are crops that are simply no longer profitable to grow. What happens then? Either farms are amalgamated into larger operations, potentially owned by distant multinational corporations, or crops simply stop being grown in the UK. Neither outcome is good for our food security. I believe that we need a mixed system that rewards farmers for producing the food we need while also supporting them to protect and improve our land.

Brexit has brought new trade barriers. Tariffs, paperwork and non-tariff barriers have disrupted what were once smooth trading relationships with our nearest market, while new trade deals bring both opportunities and uncertainties.

[Sir Bernard Jenkin]

Which goods does the EU charge tariffs on? The hon. Member said that it charges tariffs; which goods are they on?

[Ben Goldsborough]

We have to look at non-trade barriers as well.

[Sir Bernard Jenkin]

There are no tariffs.

[Ben Goldsborough]

I say to the hon. Gentleman that, as he was a member of the Government who signed up to the dodgy trade deal with Australia and New Zealand that sold our farmers down the river, he has single-handedly undermined the sheep and cattle industry in the UK—something he can be very proud of.

That is why I welcome the Government’s efforts to reset relations with the EU and pursue an SPS agreement, but I have one further warning to the Minister: in seeking closer alignment, we cannot lose Britain’s first-mover advantage on precision breeding. In South Norfolk, our scientists and growers are leading the way. Precision breeding is already showing enormous promise, including with sugar beet and other crops. Climate change, pests, diseases, drought and flooding are already threatening our food security. If we are serious about producing more food at home, we must allow our farmers to use every tool in the chest. We must learn from the impact of Brexit, address its consequences honestly, and build a system that backs British farmers and growers to give us the food security we need.

On a wider issue, Brexit has been an unmitigated disaster for many of my constituents in South Norfolk. It has led to divided families, businesses not being able to thrive as much as they want to and a tidal wave of red tape that has harmed the UK economy. I urge the Minister to explain in his wind-up remarks how Labour will push forward to remove that red tape and those barriers so that we can have a faster and more productive economy for all.

10:26

[Cat Eccles (Stourbridge) (Lab)]

It is a pleasure to serve under your chairship, Ms Butler. I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for introducing this important debate.

We were told that Brexit means Brexit, but what does that mean? We have heard a lot about sausages this morning; perhaps Brexit means breakfast—that certainly makes a lot more sense than that three-word slogan. A decade on from the EU membership referendum, we face higher costs, lower growth and less influence. Brexit has made the UK poorer, more isolated and less competitive.

The promised trade deal with the US has failed to materialise; instead, Trump has threatened the UK with crippling tariffs. The post-Brexit trade agreements with Australia and New Zealand negotiated by the previous Conservative Government delivered only marginal economic benefits, while the deal with Singapore merely rolled over the arrangements that we enjoyed prior to Brexit. As for Canada, after years of negotiations, the UK has still been unable to secure an enhanced agreement. Rather than unlocking a new era of prosperity, those deals have largely fallen short of the promises.

Since Brexit, trade with our largest market has become slower, costlier and more bureaucratic. British exporters now face customs checks and regulatory barriers that did not exist before, and goods exports to the EU remain below their pre-Brexit levels. The OBR estimates that UK trade will ultimately be around 15% lower than it would have been had we remained in the EU.

Brexit’s worst effects can and must be reduced, and that is why this Government’s efforts to rebuild our relationship with the EU matter. By pursuing closer co-operation and greater regulatory alignment where it serves our national interest, the Government are helping to make trade easier, but we need to go much further. Europe remains our biggest trading partner, and a pragmatic relationship with our closest neighbours is not an ideological choice but an economic necessity. We cannot erase the damage and costs of Brexit overnight, but we can reduce them to help British business and industry thrive.

10:29

[Rachael Maskell (York Central) (Lab/Co-op)]

Thank you for chairing the debate, Ms Butler, and I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing it.

If you ask the wrong questions, do not be surprised by the consequences. Brexit was about the politics of the time in the Conservative party, not about the economic future of our country. Let us remember the history and the poor deal that Lord Cameron tried to secure ahead of going to the country with this referendum.

Our country is now poorer and more fractious. Trade is more challenged, and we see queues at the border, horizons closing to our young people and increased migration levels. We have to ask the value of the deal that was struck after 2016. As a country, we are now significantly weaker on the global stage in a more unstable world where we should be taking the lead as we did in Europe. Locally, we know that the consequences are significant. Our constituents are £3,000 poorer as a result, and they are now faced with the cost of living challenge. We have to dig deep on where we go next and ask the questions that should have been asked in 2016. How can we have a stronger and safer economy? How do we have good trade? How do we best control migration, collaborate on a destabilised planet and ensure that our interactions abroad bring people here at home better job security, financial security and, of course, hope for the future?

As we move forward, yes, we need pragmatism, but we need boldness too. As the Minister enters the fray of negotiations, I ask him to look at rebuilding an economic union with Europe that will be of value to our constituents by ensuring that trade brings good-quality jobs and powers the research that drives our economy forward. On immigration, I ask him to consider the asylum and migration management strategy that Europe has adopted and look at a risk-sharing approach so that we can rebuild balance in our system to ensure that we are supporting vulnerable people in the right way instead of pointing the finger at them. That will help our communities and our country. And ultimately, our leadership will help our world.

10:31

[Lisa Smart (Hazel Grove) (LD)]

It is a pleasure to serve with you in the Chair, Ms Butler. I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing the debate and on the vim and vigour with which he introduced it. Ten years on, we can now see the devastating impact that the referendum had on this country—not just on our economy, but on the integrity of our democracy and political debate. Since June 2016, we have had seven Prime Ministers in a decade. We have had a Parliament that could not resolve the question in front of it, a Government who prorogued this House unlawfully to get round it and a public who have watched the whole spectacle and drawn the obvious conclusion that our political system is broken.

The Conservatives put a question to the country that they had not thought through. They lost control of the answer and then spent years arguing among themselves about what it meant while the rest of the country paid for it. Into that vacuum walked the people who benefit from it. The hon. Member for Clacton (Nigel Farage) has built an entire career on a promise he never had to deliver and now takes no responsibility for. He and others like him told the public that leaving would let us take back control of our borders. Since then, over 200,000 people have crossed the channel in small boats. Before the referendum, there were no small boat crossings. They created the conditions, and they now travel to Dover to be photographed pointing at the result.

[Sir Bernard Jenkin]

Will the hon. Member give way?

[Lisa Smart]

I will willingly give way on whether 2016 was before 2018.

[Sir Bernard Jenkin]

The referendum was in 2016, but all the legalities of membership of the European Union, including the Dublin convention, applied until 2021. The small boat crossings were rocketing before Brexit. They have nothing to do with it.

[Lisa Smart]

My point is that there were no small boat crossings before the 2016 referendum. I think the hon. Gentleman is agreeing with me on that.

British GDP is between 6% and 8% smaller than it would otherwise have been. Investment has been reduced by between 12% and 18%. Employment and productivity are each down by 3% to 4%. Estimates from the House of Commons Library, those well-known doughty remain campaigners, put the cost to the Exchequer somewhere in the region of £90 billion a year in tax revenue that is simply not there. Every Minister who stands at the Dispatch Box and says that money is not available is describing a hole that has been enlarged as a result of Brexit. That is £90 billion a year that could be used for projects across the country to support our constituents. It could be used to fund renovations to my Stepping Hill hospital, the rail services my constituents wait for every morning or cleaning up our waterways so that sewage stops being pumped into the Goyt or the Mersey.

My hon. Friend the Member for Wokingham (Clive Jones) mentioned the nearly 2 billion extra pieces of paperwork that now sit on British firms—enough to wrap around the world 15 times. Tighter border restrictions with our European neighbours devastated our hauliers, with more than double the number of insolvencies seen between 2021 and 2025 than in the previous five years. In our food and farming sector, exports to the EU have fallen by 22% since 2018, which is close to £4 billion in lost trade.

The question for the House is, “What do we do now?” Ministers know that the relationship with Europe is the biggest lever available to them. Their response so far has been to make small adjustments around the edges of a bad deal. They have ruled out the single market and a customs union, drawing red lines around two things that would make a material difference.

On fisheries, the Government have made things worse. The EU came asking for a five-year extension to the arrangements in the 2020 trade and co-operation agreement, and this Government agreed to 12 years. That is a loss worth around £6 billion over the period at today’s prices, down not only to the previous Government but to this Labour Government. Being timid is a political choice, and it has political consequences. When mainstream parties refuse to name the cause of a problem, the field is left to those who offer easy answers and no substantive solutions.

The Lib Dems are offering something different. We want a growth and defence partnership with Europe. That would mean joining the single market and a UK-EU customs union, so that our businesses can trade again without drowning in red tape. It would mean a proper UK-EU defence pact. We currently sit outside EU decision making and outside funding streams such as the European Defence Fund and the Security Action for Europe loan programme, at the precise moment when Vladimir Putin is testing this continent’s resolve and the White House is reneging on international commitments. We want a new European security council, British participation in SAFE and a European rearmament bank to support collective rearmament. Our security does not stop at Dover, and it never has.

We are also calling for the UK to join the EU’s migration and asylum pact, so that we can return people who arrive by small boat to the first EU country they entered, and so that we can see the biometric data that tells us whether someone has already been refused asylum elsewhere. That is how we actually take back control of our borders, rather than shouting about it on a beach.

Finally, we should fix the politics that produced this. A system that hands total power to a party with a minority of the vote and then dares it to govern for everyone will keep generating exactly this kind of instability. The Liberal Democrats want proportional representation through the single transferable vote at local and general elections. We want a second Chamber with a democratic mandate. We want the big money taken out of politics. We want the Electoral Commission protected from ministerial direction and serious measures against foreign interference in our elections and referendums.

From the cost of living to our broken public services, the result of the 2016 EU referendum stands in the way of making things better, and we have to fix it. Ten years on, it is clear that it has negatively impacted the UK, and I would be really grateful if the Minister could tell us today just what it would take for this Government to move their red lines.

10:38

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

It is a pleasure to serve under your chairship, Ms Butler, and to respond on behalf of His Majesty’s official Opposition. I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing this debate, but I am sure it will come as no surprise to him or other hon. Members that we see the legacy of the 2016 referendum, and indeed the path forward for our country, through a very different lens.

Listening to the hon. Gentleman, one might almost assume that the United Kingdom was a sunlit, frictionless economic Shangri-La until a single ballot paper cast us into eternal ruin. He told us, echoed by other hon. Members, that leaving the European Union uniquely crippled our economy and that our only salvation lies in surrendering sovereignty through the Government’s grandly titled EU reset, or perhaps going further.

That entire narrative collapses under the weight of hard economic reality. First, let us examine the great myth of the EU single market as an automatic engine of export growth. Ministers speak of the single market as if it were a place where magic happens, but if there was magic, the UK was firmly in the audience wondering when the rabbit would emerge from the hat. As former Trade and Industry Secretary Lord Lilley demonstrated in his Policy Exchange paper earlier this year, during our entire 28-year membership of the single market, from 1992, UK goods exports to our EU partners grew by less than 1% per year, but over that exact same period our goods exports to the 111 countries with which we traded on standard World Trade Organisation terms grew by 87%. In fact, according to the European Commission’s own single market scoreboard, the UK was the member state that benefited least from the goods single market. Rejoining that regulatory straitjacket in pursuit of export growth is the pure triumph of hope over experience.

Secondly, we must address the sheer statistical alchemy deployed by advocates of rejoining. Several speakers have brandished a non-peer-reviewed National Bureau of Economic Research working paper that claims that Brexit cost the UK up to 8% of GDP, but let us look at how the model has constructed that parallel universe. It created a statistical doppelganger proxy that was dominated by the United States and Estonia, which between them provide almost three quarters of the entire weighting for the alternative proxies—apparently—for where the UK could have been without Brexit. It assumed that, had we remained in the EU, the UK would have miraculously mirrored the American economic performance.

To attribute that divergence to Brexit requires an extraordinary leap of imagination. It requires one to pretend that there was no US artificial intelligence boom, no massive American fiscal stimulus—which was possible because the dollar is the world’s reserve currency—no transatlantic shale gas price advantage, no differing pandemic shock, and no North sea oil rundown. In fact, Germany fell 8% behind the same arbitrary index under that model, so unless German departure from the EU has passed us by unnoticed, blaming that divergence on Brexit is simply economic nonsense.

When we examine the actual data, rather than econometric fairy tales, the evidence is clear. Between 2016 and 2025, the UK economy grew by 12.2%, and by 5.3% since we formally left, outpacing the European G7 average. Since Brexit, British economic growth has averaged 1.1% per annum, compared with just 0.1% for Germany. As hon. Members have mentioned, the Office for Budget Responsibility previously assumed an implausible 15% collapse in total UK global trade openness, but as its own November 2025 briefing conceded, UK trade intensity has remained stable at around 65% of GDP and has continued to track peer economies such as France.

The single market was overwhelmingly designed for goods, but more than 80% of the UK economy is based on services. Our services exports continue to boom globally. Even the dire predictions of a mass exodus from the City of London proved dramatically overblown. Institutions such as JP Morgan, which had threatened to move thousands of jobs abroad, have instead been transferring staff back from Paris to London.

Although business investment was undeniably delayed during the post-2016 political paralysis, dragged out by those trying to overturn the referendum, fixed investment to GDP rebounded, reaching 19.6% by the end of last year.

[Pete Wishart]

I have been listening very carefully and patiently to the hon. Gentleman, and he refuses to accept the reality. The House of Commons Library did us a great favour by bringing together all the evidence, which clearly suggests that there has been a fall in GDP and in the performance of the UK economy since we left the European Union. Is he credibly standing there and telling this House that there have been no impacts whatsoever of our leaving the EU?

[Mike Wood]

If we chart it over the last two decades, particularly against German performance, on almost any economic chart we look at, it would be almost impossible to pick out the point at which the UK left the European Union. It is impossible to say from looking at those charts that our economy has grown more slowly than Germany’s, because it has not; it has grown more quickly. Our trade has not been disrupted more than Germany’s—[Interruption.] It really has not; they track almost identically across that chart.

Thirdly, where Britain is succeeding, we are doing so precisely because of our post-Brexit freedoms. The UK digital and tech flat white economy now represents about 15% of GDP—larger than the entire domestic goods sector. As the Growth Commission highlighted, our tech sector is flourishing and leading Europe in artificial intelligence, precisely because it is unburdened by Brussels’ heavy-handed Digital Markets Act, Digital Services Act and restrictive AI Act.

Instead of backing British enterprise, the Government are proposing to pursue unilateral dynamic alignment, shackling the 92% of British firms that do not trade with the EU to Brussels’s rulebook, surrendering our precision breeding advantages and hiking domestic carbon costs by linking our emissions trading scheme, which threaten to add up to £100 per tonne to fertiliser prices at a time when they are already crippling British farmers, while paying administrative fees to Brussels for the privilege.

That is an astonishingly one-sided bargain, a masterclass in the art of the bad deal. The lesson of the past 10 years is that national prosperity is built by businesses working across the UK, not subcontracted to the EU. The economic catastrophe prophesied in 2016 simply did not occur.

[Andrew Rosindell]

rose—

[Mike Wood]

I will give way briefly, as I am drawing to a close.

[Andrew Rosindell]

The hon. Gentleman is making a powerful and correct speech, offering the facts. Does he not regret that, in all those years of Conservative Government after we had left the EU, we did not seize the opportunities to be more radical, to ensure that the benefits of Brexit were properly realised? Does he also repudiate John Major’s Government for bringing in the Maastricht treaty, which created political union in the first place?

[Mike Wood]

It is one thing to look back over the past 10 years, but I hope the hon. Gentleman will excuse me if I plead that I was taking GCSEs in 1992 rather than paying attention to what John Major was doing. The next Conservative Government should certainly look at how to take better advantage of the freedoms available outside the European Union, because there are many opportunities. His Majesty’s Opposition will continue to champion our regulatory freedom, to back British innovation and resist any attempt to drag this country back into the EU’s regulatory orbit.

10:47

[The Minister for Intergovernmental Relations and European Relations (Mr Hamish Falconer)]

It is an honour to serve under your chairmanship, Ms Butler. I extend gratitude to the hon. Member for Perth and Kinross-shire (Pete Wishart) for providing a rich opportunity on our second day back. Much history has been discussed: two referendums and what should have been in our manifesto. I was disappointed to see colleagues from the right unwilling to enter into greater detail of the debate about Maastricht and John Major. I must confess that I suspect our constituents are slightly less interested in going through the entrails of the history. It is important to focus on the future.

I will quickly say three things about my overall position regarding the negotiations to come. I will also try to answer some of the specifics raised. Some hon. Members may wish to intervene, which they are welcome to do, but I will try to cover a little ground initially. First, I want to pay an enormous tribute to my predecessor, who did incredibly important work in resetting our relationship with the European Union. In the spirit of unity, I will resist the temptation to respond to the accusation from the hon. Member for Kingswinford and South Staffordshire (Mike Wood) that I am providing “a masterclass in the art of the bad deal.” My predecessor faced a true masterclass of a bad deal left to him by the previous Government, and he did incredible work on a reset.

I want to be clear on three points. First, I want to go even further and faster than my predecessor. There is great urgency to address the shortcomings in our arrangements. Secondly, there are challenges facing Europe of security, defence and the economy. I discussed those challenges with my European counterparts in Austria this week. Thirdly, Britain is part of Europe. We are Europeans. European security is British security. We must be a close partner with our European friends in dealing with shared challenges.

[Jim Shannon]

First of all I thank the Minister, who always tries to answer our questions. In my contribution, which was specific to Northern Ireland, I asked him whether he had had an opportunity to consider the issues and the impact of the Windsor framework on Northern Ireland and how it affects our trading with the United Kingdom and Europe. Also, I thank him for coming back from his honeymoon to his new position.

[Mr Falconer]

I am glad that someone is grateful for my coming back, and I am grateful for the hon. Gentleman’s courteous tone. Of course, the Windsor framework is important. As he and many people across this House know, it is an incredibly complex arrangement that seeks to preserve the delicate balance in Northern Ireland. I have heard comments from all sides of the debate. I look forward to visiting Northern Ireland soon. It is vital that the people of Northern Ireland get the benefits of both. I understand the criticisms that he made during his remarks, but at the moment it is the one part of the UK that benefits from both, and I want to see that benefit maximised to the absolute fullest.

I was saying a little about European challenges. As the Prime Minister was clear yesterday, there are challenges for our economy, as there are for other European economies—I discussed that during my time in Austria, and the Foreign Secretary will discuss it with his counterparts. There are of course real conversations to be had with our European friends on the whole range of issues that have been discussed.

I want to confirm a few things. First, to colleagues who spoke up for their farmers, I understand the pressures on British farmers. I understand the support that I have heard this morning for concluding an SPS deal. I intend to do so with British farmers’ interests at its very heart. I heard some of the specifics, including the barriers and costs that have accrued when seeking to export. I do not like to disagree with my hon. Friend the Member for Stourbridge (Cat Eccles), but there was a suggestion that sausages were not the most important thing. As a Lincolnshire MP, I would like to say that they are, and their easy export is a priority for me and would benefit not just Lincolnshire and Europe, but the whole of the UK.

I also heard the other important points that were made. I will again try to strike a brief moment of unity with the Opposition: we have great strengths in services. Many European firms look to the UK for those strengths. It is a shame that those arrangements and services remain as immature as they are. That was a frustration before 2016 and it remains a frustration afterwards. It is in the whole of Europe’s interest to free up the services trade within Europe. I discussed that with my counterparts just this week.

[Sir Bernard Jenkin]

The question of scrutiny was raised by the Minister’s colleagues. In the absence of a European Scrutiny Committee, how is this stuff going to be scrutinised if he brings in direct applicability and direct effect of European laws?

[Mr Falconer]

The hon. Gentleman will understand that I cannot provide much comment on the structures of parliamentary scrutiny, which are obviously not a question for me, but I can confirm that if we are able to conclude the ambitious deal that I hope we will be able to in the months ahead, I will of course return to Parliament and there would be a full scrutiny process. He refers to changes in the law. That happens in this place, and I would expect proper scrutiny processes of any legislation that was required to enact the Bills in question.

I was talking about services, and I pay tribute to the musical talents in this place. It is not just the Prime Minister who knows how to play a guitar. It is a great shame for Europe and Britain that touring is not easier for British bands in Europe. I discussed those issues this week. It is a source of frustration to me that it has not been possible to make faster progress. I heard the Liberal Democrat advice to change our manifesto commitments, but I would question the political wisdom of doing so. It is a manifesto commitment for us to make progress on this issue, and we will continue to do so. There are a range of complex issues being raised by the European Union about securing the changes that we want to see. I am sure it is a sentiment shared right across the House that music should flow freely, and that the UK and Europe benefit from the closeness of those relationships.

Some questions were raised about the timing of the summit and the negotiations. Obviously, we will need to agree timing with our friends in Europe and announce it in the usual way, but I want to be clear to the House that I am ambitious to move quickly and I would like to see progress within the coming months.

There was much else upon which I could touch. I will leave the debate about the statistical doppelganger proxy method for checking whether the British economy could have grown more or less quickly than other European economies to the Opposition spokesperson, the hon. Member for Kingswinford and South Staffordshire. All I will say is that our relationship with Europe is absolutely vital for our economy. In our constituencies, we will all have experienced businesses that are finding exports and recruitment harder; a whole range of issues have been made more difficult by the poor deal that we were left with. I would like to reassure the House that it is my intention during my time in this role to make it easier for the whole of the UK.

10:56

[Pete Wishart]

I am grateful to have a couple of minutes to sum up what has been an excellent debate with some fantastic contributions.

I secured this debate because I could not believe that in June this year, no one made any attempt to even recognise the fact that we had left the European Union 10 years ago. There was no carrying of the hon. Member for Clacton (Nigel Farage) down the Mall in ticker-tape processions. There was nothing in the way of celebration or even to mark the event. I found that a bit unusual, which is why I secured the debate. I am pleased that I did, because we have heard some pretty scary things today. There were two words that came out loud and clear from practically every contribution: unmitigated disaster. That is the conclusion that any sane and rational person would have to make when they look at what has happened in the 10 years since we left the European Union.

I listened carefully to my Conservative colleagues talk about the history of all this. They do not seem to be able to accept the forecasts that are clearly laid out in the House of Commons Library briefing. Maybe we have the wrong type of Brexit, the wrong type of Government, the wrong type of deal or the wrong type of House of Commons Library. I do not know what their real issue is, but they fail to accept and recognise that there has not been even a mixed response. It was quite alarming that the hon. Member for Kingswinford and South Staffordshire (Mike Wood), who spoke for the official Opposition, could not even acknowledge that there have been difficulties over the past 10 years.

My last word to the Government is that, yes, they can make progress, and we are all keen to support them in trying to improve the relationship with the European Union, but unless they are prepared to consider rejoining the European Union, which is what the vast majority of the people of this country want, I am afraid they will not be able to make much progress. It will just be more tinkering and making slight progress at the very edges of a very clear and distinct problem.

I urge the Government to have a look at the benefits of rejoining the EU, even through some sort of examination or inquiry about what it could do. It is not good enough to just blithely say that we are not looking at it and we are sticking to our red lines, and it is not what the people of the country want. They want to be back in the European Union—a sensible place to be—and to end the unmitigated disaster that we have experienced in the last 10 years.

Question put and agreed to.

Resolved,

That this House has considered the impact of the 2016 EU membership referendum on the UK.

Disability Living Allowance: Qualifying Period for Children

Wednesday 2nd September 2026 Westminster Hall

11:00

[Dawn Butler (in the Chair)]

I will call Michelle Welsh to move the motion; I will then call the Minister to respond. I remind other hon. Members that they may make a speech only with prior permission from the Member in charge of the debate and from the Minister. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Michelle Welsh (Sherwood Forest) (Lab)]

I beg to move,

That this House has considered the potential merits of removing the qualifying period for Disability Living Allowance for children.

It is a pleasure to serve under your chairmanship, Ms Butler. It is right and fitting that I start this debate where it all began for me, with dear Mabel—a brave, kind, clever, funny four-year-old girl who lives in my constituency—and her tenacious mum Rachael. When I was first elected to Parliament, I met with Rachael, my constituent, and she shared her experience with her daughter Mabel, who sadly had been diagnosed with cancer.

Aged four, Mabel was diagnosed with Wilms’, a form of kidney cancer. After a horrifying six months, including two major operations and a tough course of chemotherapy, the family received the news that Mabel was free of cancer. Now, aged six, Mabel attends her local school, where I was fortunate enough to meet her, and is enjoying her life as a young child should. I know that the House will join me in wishing Mabel well.

Following Mabel’s diagnosis, Rachael made an application for disability living allowance, which required completing a 40-page questionnaire that asks questions such as whether the four-year-old needs help monitoring their blood oxygen levels. Disability living allowance is supposed to support families of children with disabilities and serious conditions such as cancer. It can provide a lifeline of financial support at the time when it is most needed, yet the current system requires families to wait three months for the qualifying period. Let me be clear: the financial impact of cancer does not begin after three months. It is instant.

Rachael shared with me that Mabel being diagnosed with cancer was the toughest time of her family’s lives. Despite that, she felt that they were in a more fortunate position than many of the other families on the ward. Rachael’s employer gave her six months off work as sick leave and her partner was able to work flexibly so that they could both spend time with their daughter at hospital. That time allowed Mabel to have support and care from her loved ones, and it allowed support from their family. I cannot even begin to imagine the anguish that families face with such a diagnosis—all the more when it is their child. Unfortunately, not every employer is able or willing to offer that support. That disparity should leave us asking: if we cannot be there when a child is diagnosed with cancer, what are we doing?

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on securing the debate. It is debates such as this that remind us of our job as MPs. Does she agree that when a family receive a devastating diagnosis, whether that is of a terminal illness, a severe disability or an aggressive childhood cancer, the financial shock and caring responsibilities are felt immediately? In the three-month qualifying period, families can sometimes accumulate up to £5,000 in additional debt during the most agonising months of their lives, while—I say this respectfully—the Government drag their heels. Will the hon. Lady join me in pressing the Minister, in her compassionate and understanding way, to get Government to recognise that a child’s suffering does not wait 90 days to become real, and to ensure that crucial financial support is delivered from the very point of diagnosis?

[Michelle Welsh]

I absolutely agree. Too often, the financial impacts of a cancer diagnosis are forgotten. People think about the hospital visits, the sickness and the endless tablets, but a disability or serious condition such as cancer has an impact on every single part of someone’s life. Following a diagnosis, families immediately have to deal with the financial impact. It is a sad fact of life that bills do not care whether a child has cancer; they will still be due.

But we can care. Cross-party, we can care. We can unite and do the right thing. Families with children with a disability or serious condition have to wait seven months on average before receiving a single disability living allowance payment. That is months and months of rent, mortgage payments, electricity bills and council tax, and it is weeks and weeks of food shopping. It is compounded by the fact that household income drops by an average of £6,000 per year. For one in three, that can reach over £10,000. Sadly, it gets even worse: the delay in receiving DLA means that a parent’s ability to claim any carer’s allowance as an additional or an alternative has a further impact on the financial strain. It is also important to note that parents in work are unable to apply for universal credit, and that that cuts out other potential streams of support.

All this leaves parents with an impossible choice, a cruel choice that no parent should have to make: do they leave their child alone in hospital to face this battle by themselves, or do they not go to work? Do they skip bills? Do they run the risk of losing their home? Do they not eat? Do they turn the heating off? This is the reality. These are decisions that families should never have to make, yet they happen daily for families up and down this country.

During my meeting with Rachael, she told me about a young boy of just six years old who was also on the ward. His parents were left with no option but to carry on working. As the nurses were unable to provide round-the-clock care, Rachael helped him to use the toilet, helped to dress him and helped him to eat. It is heartbreaking to think of the many children who have no one beside them—not just for the children, but for the mothers and fathers being left with no choice. I missed my son’s first day back at school today and have cried about it, but that is nothing in comparison with having to leave a child who is suffering from cancer in a hospital bed. Let me be clear: DLA is not designed to act as a source of income. It is there to help with the extra costs of looking after a child with a health condition.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to my hon. Friend for her incredibly powerful speech. She is right that this is not a necessity; it can be addressed. Does she agree that the Department for Work and Pensions needs to ensure that parents get support from day one so that they can address the increased financial costs that they face from the beginning of a diagnosis, and the real need for parents to be present to support their child?

[Michelle Welsh]

I absolutely agree. Cancer is actually one of the clearest diagnoses that someone can get from day one.

Cancer does not wait, yet families have to. The three-month qualifying period does not reflect the realities that families face. In Mabel’s case, the family were informed that they would not qualify for any support, as Mabel’s condition had not lasted for more than six months. In other words, she had not had cancer for long enough. That is despite her having undergone multiple operations and chemotherapy; to this day, she must still attend regular hospital appointments. It is my understanding that the qualifying period is meant to establish that a health condition is long-standing in nature, but with a diagnosis of cancer surely support should be given from the outset.

[Alex Easton (North Down) (Ind)]

I congratulate the hon. Member on securing this debate. Does she agree that there is a strong case for greater flexibility in rapidly diagnosed cases where a clinician has already identified a severe, serious and long-lasting condition, and that in such cases a qualifying period can be unnecessary, bureaucratic and indeed insensitive?

[Michelle Welsh]

Absolutely. The bureaucratic system is failing families, but these issues could easily be resolved if medical evidence could be used instead of the qualifying period. I urge the Minister to look at ways in which medical evidence and research can be used in DLA to make the system better for those who rely on it. There are already provisions that allow the use of medical evidence to bypass the qualifying period, such as the special rules cases where someone is approaching the end of life. The qualifying period is outdated and does not reflect the complexities of lifelong conditions. I am aware that the Government do not know the cost of removing the qualifying period, but I do not think that any cost is worth more than parents’ ability to be there for their child when they have cancer.

As it stands, we cannot cure childhood cancer. We cannot spare families the fear, the sleepless nights or the heartbreak of watching a child undergo surgery and chemotherapy. But we can ensure that when the worst happens, the Government stand beside them rather than placing further barriers in their way. Families should not have to prove their desperation for three months before receiving support. They should not have to navigate mountains of paperwork while sitting beside a hospital bed. They should never be forced to choose between earning a wage and being there for their child.

Mabel’s story is one of hope. Today, she is back at school, enjoying the childhood that every parent wishes for their son or daughter. But her family’s experience has exposed a system that is failing too many in this country. The question before us is a simple one: when a child is diagnosed with cancer or another serious condition, do we respond with bureaucracy or with compassion? I believe we should choose compassion. I therefore urge the Minister to work with families, clinicians and charities to remove the three-month qualifying period and replace it with a system that recognises medical evidence at the outset. Let us ensure that no parent is forced to leave a child alone on a hospital ward because they cannot afford to be there. Let us build a system worthy of the families who rely on it—and let us act now, because cancer does not wait.

11:10

[The Parliamentary Under-Secretary of State for Work and Pensions (Lilian Greenwood)]

I am delighted to serve under your chairship, Ms Butler. I congratulate my hon. Friend the Member for Sherwood Forest (Michelle Welsh) on securing this important debate. She has made a particularly valuable, thoughtful and passionate contribution this morning, and I join her in wishing Mabel, her mum Rachael and their whole family well.

My hon. Friend called this debate to discuss the qualifying period for disability living allowance for children. As we have heard, DLA contributes to the extra costs that may arise as a result of a disability or health condition. For some, it can provide a total of just over £10,000 a year. It is usually paid to the child’s parent or guardian; it can help with the overall family finances and can be used as they see fit to meet their needs. It continues to be paid in full to children and young people under the age of 18 when they are in hospital.

DLA is available if a child’s condition or illness is both of a long-term nature and one that gives rise to care or mobility needs. Payment begins once the three-month qualifying period has been satisfied. That helps to establish that the disability and resulting needs are of the long-standing nature for which this benefit is designed to offer support. The qualifying period provides a sensible division between short and long-term disability, but, importantly, it does not begin with the date of the claim; it starts with the beginning of the need for care and/or mobility that makes the child eligible for DLA. That period can start before the date of claim. The question as to when the need started will be taken into account by decision makers, meaning that consideration will always be given to whether the qualifying period has already been partly or fully completed prior to the date of claim.

[Jim Shannon]

If I have correctly understood what the Minister is saying, if a consultant, GP or other doctor sent a letter confirming that the condition started way before the application was made, that would be the qualifying period, and that would be done by a medical person. Am I reading it right?

[Lilian Greenwood]

It starts with the issue of need. The point at which the child became eligible for disability living allowance marks the start of the qualifying period, even if that precedes the point at which parents make a claim. Understandably, when parents are in very difficult circumstances, their first thought is probably not about applying for disability living allowance. For children who are severely disabled at birth, the qualifying period can start at birth.

The date of claim is usually the date the request for a claim pack is received. Provided that the customer returns the claim form within six weeks, the date of claim will be treated as the date that the claim form was requested. The Secretary of State also has the discretion to extend that period beyond six weeks if the delay is considered reasonable. In the sort of circumstances that my hon. Friend the Member for Sherwood Forest has described, we can understand how those issues can arise.

If a child sadly has an end-of-life diagnosis, special rules are rightly in place. Those claims are always fast-tracked and the three-month qualifying period does not apply. The highest rate of the DLA care component will be paid from the date of the claim. My officials are currently exploring options to enhance bereavement support for parents through the social security system, and we will continue to engage with stakeholders as that work develops.

Given that this debate stems from concerns about how quickly families get the support they need, it is worth highlighting that we have recently made significant improvements to waiting times for new child DLA claims. People are not waiting nearly as long as they did for their claim to be processed. My hon. Friend rightly highlighted the need to address long waits.

[Rachael Maskell]

In the light of the fact that we are moving into a new era of a can-do Government, will the Minister look, together with clinicians, at the opportunity and benefit of delivering DLA from day one, and then bring the evidence back to the House?

[Lilian Greenwood]

I will perhaps come later in my speech to what the Government are planning to do.

I am pleased to tell colleagues that between October 2024 and March 2025, the Department recruited and redeployed in excess of 100 case managers to improve clearance times for child DLA new claims. Between 1 August 2025 and 31 March this year, the Department cleared around 185,900 child DLA new claims, of which 68.3% were cleared within 45 working days. In that time, the percentage of claims cleared within these planned timescales rose from 4.7% to 90.7%. I hope that colleagues will recognise that that is a significant and necessary improvement.

The social security system exists to provide opportunity and security. It is there to help people to navigate the difficult circumstances that any of us can find ourselves in. There can, of course, be few circumstances more exceptionally difficult than those faced by seriously ill children and their parents. Along with the emotional strain, parents can understandably experience a significant impact upon work and household income, as well as facing extra costs, as my hon. Friend the Member for Sherwood Forest very ably set out. It is understandable that many parents in this situation are likely to need additional support through the social security system.

It is worth reiterating that beyond the support that DLA provides in and of itself, it can also passport to a range of additional support. That includes premiums in income-related benefits, carer’s allowance, the Motability scheme and exemption from the benefit cap. That is providing comprehensive help for families. For those who qualify, financial support is available through universal credit, including for those who are in work but on lower incomes. If needed, that support can be available on day one through an advance. Alongside the universal credit standard allowance, additional amounts such as child element, disabled child addition, carer element or housing costs are added as appropriate. Although universal credit is means tested and therefore not available to households that are better off financially, it is there as a safety net should those financial circumstances change.

The social security system will always be a cornerstone of our support for unpaid carers and parents of disabled children, but it is not the only way we can help. Rightly, this is something that we have been thinking about across Government. Indeed, the Government have recognised precisely the issues that have been raised by both my hon. Friend the Member for Sherwood Forest and my hon. Friend the Member for York Central (Rachael Maskell). As I am sure they are aware, only yesterday the Department for Business, Innovation, Science and Trade closed its “Make Work Pay” consultation on employment rights for unpaid carers and parents of seriously ill children. That included seeking views on a possible new statutory entitlement to leave and pay for parents of seriously ill children, which is often referred to as Hugh’s law. That is in recognition of the campaigning undertaken by the family of Hugh Menai-Davis, who very sadly died aged six from cancer in 2021 but left this important legacy. I know that my colleagues will look carefully at the submissions to that consultation and will respond to it in the coming months, and I am sure that my hon. Friends present will look to colleagues in the Department and the work that they do.

My hon. Friend the Member for Sherwood Forest rightly highlighted the importance of parents being able to support their children at these incredibly distressing times. In April last year, the Government introduced a new element of up to 12 weeks of neonatal care leave and pay for parents of babies in neonatal care to ensure that they have appropriate support during that time. The national cancer plan for England was published in February and was warmly received, not least for its introduction of a children and young people’s travel fund, backed by £10 million, and its recognition of the specialist approach that is needed for cancer in children and young people. Of course, our goal across Government remains to relentlessly work towards improving outcomes and experiences for children and young people with serious illnesses and supporting their families. I give that commitment to my colleagues today.

Caring for a child who is seriously ill must be one of the most worrying and stressful situations that a parent can experience, which is why I am so glad that we have had the opportunity to discuss this issue today. Although there are no current plans to remove the three-month qualifying period from disability living allowance for children, my Department is already doing a significant amount of work and offering significant support. I assure my hon. Friend that we will continue to search for the right levers across Government to further strengthen support for parents in these terrible circumstances, and that we will always approach these issues with compassion. Once again, I thank my hon. Friend for securing this debate on an important and sensitive subject and all Members who have contributed.

Question put and agreed to.

11:21

Sitting suspended.

Rural Upper-tier Local Authorities

Wednesday 2nd September 2026 Westminster Hall

[Paula Barker in the Chair]

14:30

[Helen Morgan (North Shropshire) (LD) [R]]

I beg to move,

That this House has considered Government support for rural upper tier local authorities.

I am a vice-president of the Local Government Association, and I am extremely worried about the widening gap in opportunity, social mobility and economic growth between rural and urban areas. Rural areas are being held back and the futures of rural children are being limited by public services that are underfunded and overstretched, lamentably slow digital connectivity, the lack of public transport, and urban-centric perceptions based on misunderstandings about the nature of rural life.

The last local government finance settlement laid bare that neglect in financial terms. It was a stark admission from this Government that their plan is to strip funding from rural areas to improve services in urban ones. The Rural Services Network has calculated that urban councils will receive 32% more funding per head than rural councils next year. Meanwhile, rural residents pay on average 17% more council tax per head than urban residents, out of lower than average wages, to plug the gap, yet the cost of delivery means that they receive a poorer public service.

For Shropshire council, the funding situation is particularly grave, following 16 years of catastrophic management by Shropshire’s Conservatives. When the Lib Dem administration took over in May 2025, Shropshire was in the most difficult financial position of any council in England. The recent Chartered Institute of Public Finance and Accountancy report on the huge challenge in Shropshire reveals the details of the Conservatives’ poor management: unrealistic budgets and constant overspends that burned through all the remaining reserves; an obsession with unaffordable vanity projects, such as the purchase of Shrewsbury’s shopping centres and millions spent on an unaffordable road; a sloppy workforce restructure in 2024-25, which drove out the talented managers needed to transform the financial situation; and the “legacy impact” of five years of consecutive council tax freezes. All that was left as a parting gift for the new administration to pick up. The report describes the direction of the council under its recently appointed new chief executive and four-to-five-year improvement plan as a “positive step”, and a peer review by the LGA praised the “significant strides” made so far, but the financial position remains perilous and the challenge to restructure the council is huge.

Eighty per cent of Shropshire council’s budget is spent on social care, an issue on which the Liberal Democrats have long called for urgent action. The cost of delivering social care in a rural area with the demographics of North Shropshire, where 25% of the population is aged over 65, means that the pressure is only set to rise. Adult social care spending has already been rising by about 5.8% a year, more than could have been generated by council tax increases, because people are living longer, needs are becoming more complex, and workforce costs are rising, with care providers consequently charging more.

Demand for education, health and care plans has risen even faster. Shropshire now has 3,016 active EHCPs, a 21% increase in one year compared with national growth of 11%. The number of school-aged children with EHCPs has increased by 78% since before the pandemic. That puts more pressure on specialist education, school transport and family support. Last year, the council put up council tax by 8.99%. Although that brought in a massive £21 million a year, it covered only about a third of the extra cost from demand and inflation alone.

Amid that financial turmoil, the Government have cut funding per head in Shropshire. It is projected to fall well below 90% of 2024 funding by 2028, while the national average is set to rise to around 118%. The exceptional financial support provided to balance the books bears interest and must be paid back; it worsens prospects for the future, and for a considerable time. Under the Government’s new devolution plans, there is a risk that the gap between mayoral and non-mayoral authorities could increase further.

During the Prime Minister’s statement yesterday, I asked him about the importance of power and resourcing being made available to all authorities, not just those that have formed a combined authority or have a mayor. His answer was in some ways encouraging, but in other ways it bothered me. He said that when Shropshire council could

“stand on its own two feet”—[Official Report, 1 September 2026; Vol. 790, c. 49.]

it would be able to access devolution, but the Government’s own three-year financial settlement is forcing austerity on rural areas, making the achievement of self-sufficiency far less likely.

[Noah Law (St Austell and Newquay) (Lab)]

I am sure that the issues in Shropshire that the hon. Lady mentions are the same as those that we in Cornwall have experienced. Does she agree that the move to a mayoral share of income tax is not a detriment to non-mayoral areas like ours but an opportunity to reset the model? We have seen integrated settlements and money being thrown at mayoral regions, but this is an opportunity to turn the taps off for those regions and turn them back on for areas like ours that have not proceeded with a mayor.

[Helen Morgan]

The hon. Gentleman makes a good point. I would need to see the detail of that proposal and what it would mean. Shropshire is already a unitary authority and is essentially at the bottom of the list for a devolution plan, so that seems too far off. There seems to be no prospect of stabilising the financial situation until there is a firm plan to ensure that the powers needed to turn the area around, and the resources to go with them, are firmly in place. We urgently need clarity on that.

The hardship and austerity in rural areas has come about largely as a result of the removal of remoteness as a factor when calculating what it costs for a rural authority to deliver services across a vast area. The County Councils Network estimates that that has removed £300 million from its members’ budgets—an amount that the Government expect to be made up by increased council tax.

Shropshire council has been squeezed at both ends—first by years of Conservative maladministration, and then by Labour cutting its funding, despite the obvious need —and it is far from alone. Rather than tackling the problem head on, the Government have underfunded rural councils, which has perpetuated rural deprivation. That is particularly acute where people lack access to services, and it is hidden, unlike urban deprivation.

While door-knocking in my constituency, I met a delightful elderly gentleman living in a small cottage, and I was astonished to also meet his grandson, who was apparently living in his shed in the garden because he was unable to find anywhere else to live. Such cases go unnoticed in homelessness statistics, because families and communities find their own solutions to wrap around those individuals, but no one thinks a shed is appropriate accommodation for that young man. He should not have been allowed to fall through the net.

A lack of funds for local transport perpetuates isolation and leads to a vicious cycle, stunting economic growth and creating further challenges for the council’s provision of services such as social care. When members of the Casey commission came to Shropshire to talk about the challenges of delivering social care in a rural area, they were astonished by the notion that carers must have a car because there is no transport in the evening or on a Sunday.

Yesterday, the Prime Minister spoke of the importance of local transport and publicly provided services. We all agree with him, but Shropshire’s bus allocation has been cut despite the fact that it has lost more bus miles than anywhere else. Revenue funding is due to drop £175,000 in 2027-28. The Secretary of State for Transport, in an answer to me about step-free access at Whitchurch station, implied that the funds will be spent where the people are, not where the need is. She said:

“When we are investing in the accessibility of stations in the future, we need to get maximum benefit for the travelling public.”—[Official Report, 16 July 2026; Vol. 789, c. 1059.]

Previously, that has meant that the funds go to the most densely populated areas, not to those where there are no real alternative forms of transport.

The patchy public transport network across North Shropshire means that it is almost impossible for most residents to manage without a car, and that brings further associated costs. Those who cannot access a car, whether they are young or old, become isolated and unable to access opportunities, education and services.

Similar patterns of deprivation are reinforced through Government funding for education in rural areas, even though they often already struggle with teacher recruitment and retention. Schools in North Shropshire received an average of £6,460 a head last year, compared with a national average of about £7,910, but outcomes at GCSE and key stage 4 are consistently lower than the national average, and indeed the west midlands average. How can the Government justify lower funding when the outcomes are already lower? Surely every child deserves the opportunities provided by a properly funded education.

That applies to capital spending in education too. One shocking example in my constituency is a primary school in one of the most rural parishes that still has outside toilets, in their original Victorian red-brick building. A lady told me during my summer tour this year that her granddaughter was too afraid to use the toilets because they are full of spiders and had an accident at school as a result. That is unacceptable. That is the kind of thing that people remember when they are 50 if it happened to them when they were seven at school.

Young people in rural areas are having their horizons limited as a direct result of Government policy. That needs to change, urgently. In what way are the Government tackling inequality if rural and coastal areas are persistently underfunded, despite their worse outcomes? My constituents rightly perceive an entirely broken system in which every year they pay more and receive less. That is obviously unfair and is opening the door wide to populists and extremists who exploit the situation with divisive messages to divide our community and simple but unworkable solutions.

The new Prime Minister has given us all hope by promising growth in every postcode. He will fail in rural areas if he does not address the obvious unfairness that Government policy combined with the pressures of ever-increasing demand for social care are delivering. Proper devolution will help rural councils tailor public services to the areas that they serve, but there must be acknowledgement of the need for a fair allocation of resources to go with those theoretical powers. I hope the Minister can provide details in his response.

14:41

[Terry Jermy (South West Norfolk) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Barker. I thank the hon. Member for North Shropshire (Helen Morgan) for securing this important debate. Like her, I am passionate about local government. I find myself in Cornwall corner here today, but I am proud to be a Member from Norfolk. I stood for Norfolk county council way back in 2009 and lost in a bad year for my party. I stood again in 2013 and lost by a single vote, though I was delighted to be elected in a by-election six weeks later. I served on the county council for 13 years and only resigned when I was elected as an MP. It gave me a real understanding of the complexity and difficulty involved in delivering services across a wide geographical area such as Norfolk.

The London borough of Islington is the smallest upper-tier authority in the country, with statistics not dissimilar to other urban upper-tier councils. It has a population of about 223,000 people, covers less than 6 square miles and has a population density of 15,000 people per square kilometre. By contrast, Norfolk, where my constituency is located, is home to 940,000 people—nearly four times as many—but covers more than 2,000 square miles and has a population density of 175 people per square kilometre.

On top of that, the median age in Islington is 33, while in Norfolk it is 10 years higher. That is because—I am slightly in danger here—Norfolk is of course the most beautiful county in the country and many people rightly choose to retire there. However, that puts an additional strain on public services, and it means that the proportion of the population who are of working age and contributing tax is lower. When that is combined with years of underfunding by the previous Conservative Government, as the hon. Member for North Shropshire mentioned, rural residents inevitably pay more for services out of lower than average wages. As is the case for several rural upper-tier authorities, Norfolk faces higher costs to provide services across its dispersed population.

This disparity causes many challenges and weakens our potential for economic growth, and that is the key point I want to get across to the Minister. Rural upper-tier authorities often do not have the funds available to invest in the services that would drive economic growth. There is limited investment available, for example, for rural infrastructure, transport, housing, skills and broadband.

If the Government want to see rural communities contribute more to national economic growth in every postcode, as I believe they do, they need to recognise that funding local councils would be a good place to start. I therefore ask the Minister to consider three particular measures. First, future local government settlements need to include much stronger and more transparent rural sparsity components, taking account of not just population but road mileage, travel times, population age and the number of communities a council has to serve.

[Richard Foord (Honiton and Sidmouth) (LD)]

The hon. Gentleman is making an excellent speech, and he is absolutely right about road mileage. Devon has to maintain over 8,000 miles of road, which is the most of any upper-tier authority in the country. Does the hon. Gentleman agree that partitioning Exeter off from the rest of Devon—from the rural Devon hinterland—will strip away the tax base from Devon county council, meaning it will be unable to provide alternative services that would otherwise power growth?

[Terry Jermy]

I understand the Devon road network, which is similar to Norfolk’s—Norfolk and Devon’s councils were paired—and there are obvious challenges with it. I am sure the Minister heard the hon. Gentleman’s point about local government reorganisation, but I will not comment on it. I can barely understand Norfolk’s proposals, let alone Devon’s.

As I was saying, road mileage, travel times, population age and the number of communities that a council serves are all crucial. There are 72 villages and three market towns in my constituency; they are all different, with unique challenges but also unique opportunities.

Secondly, the Government need to do more around the special educational needs and disabilities crisis. I appreciate that SEND is somewhat outside the Minister’s brief, but it is a crucial issue for councils like Norfolk’s that are trying to meet the growing cost of SEND while delivering other services.

Thirdly—this is more Norfolk-specific—there needs to be sufficient funding for the reorganisation of Norfolk’s local government structures. The objective should be to ensure that the money spent on creating new authorities does not come at the expense of the services that existing authorities currently provide. I am a huge supporter of devolution and local government reorganisation in Norfolk, but it is expensive and time-consuming and, frankly, councils already have enough to worry about at the moment.

14:46

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairship again, Mrs Barker, after a bit of a break since the last time.

I thank my hon. Friend the Member for North Shropshire (Helen Morgan) for setting out so well the funding challenges facing upper-tier councils. She quite correctly articulated the challenges in relation to special educational needs provision, to which I could add home-to-school transport and, in the case of Oxfordshire, a population that is not just ageing but growing. Social care accounted for 52% of Oxfordshire county council’s budget in 2024-25.

I want to focus my remarks on perhaps the most visible public service that councils provide, which is highways. For the current financial year, Oxfordshire’s Government allocation for highway maintenance is £33.5 million. This funding must maintain all highway assets in Oxfordshire, including 3,009 miles of carriageway, nearly 2,000 miles of footways and cycleways, 3,500 bridges and public right-of-way structures, 168,000 drainage assets and 124,000 electrical assets, such as street lighting, traffic signals and safety infrastructure.

Oxfordshire county council was graded “Green” in the spend category of the Department for Transport’s recent exercise in respect of the Government’s local road maintenance ratings. That means the council invests “significantly” in maintaining its roads and goes beyond what the Government funds. Independent modelling shows that in Oxfordshire around £50 million per year is needed simply to maintain the network in its current condition, which means the Government funding falls short by around £16 million per year. Ideally, the county council would want to go even further and improve the condition of the roads rather than just maintaining them in a steady state; the amount of funds needed would then be even higher, at £60 million per year.

Oxfordshire consistently spends significantly more than it receives from the Government for highway maintenance, but it is still a long way off the amount required. The council estimates that there is a maintenance funding backlog of over £700 million across the county’s highway network, part of which is to do with the previous Conservative administration and its stated policy of managed decline. The situation will only worsen with prolonged underfunding from central Government.

This is a national issue. There are Members present from throughout the country, as we see whenever we discuss the subject of road surfaces. Without sustained funding, local authorities remain locked into a reactive cycle, whereby potholes re-emerge faster than they can be eliminated. Despite such challenges, Oxfordshire county council is trying to do things differently and get on to a proactive and preventive footing in relation to highways maintenance. It has significantly improved its programme of gully clearance and delivered the largest programme of surface dressing in at least 20 years, investing £14.5 million and treating around 2 million square metres of carriageway to prevent potholes from forming in the first place.

In the past year alone, the council repaired more than 57,000 defects, including 37,000 potholes. It is spending £8 million this calendar year on a new surface dressing programme to tackle long-term road maintenance issues and prevent the formation of potholes. Between April and June, 87 roads across the county were treated, covering more than 1 million square metres of carriageway across 62 towns and villages in Oxfordshire.

Amid these challenges, the changes to Government funding formulae will mean a cut to Oxfordshire county council’s budget of £24.1 million over three years, further undermining its ability to do more preventive work. If the Government continue to make unwise decisions, the council is, like so many others, at risk of seeing a vicious spiral of cuts and deterioration to highways and wider services.

It is important that we do not pit different parts of the country with different geographies and demographics against one another. Every part of the country has a need in one form or another. Of course, our new Prime Minister has said so himself with the idea of

“good growth in every postcode.”—[Official Report, 1 September 2026; Vol. 790, c. 27.]

The Government have certainly talked about that a lot in respect of Oxfordshire, with the Oxford-to-Cambridge growth corridor being so pivotal to scientific research and to accommodating housing targets.

A new funding formula is needed that clearly cannot be based on the number of people alone. There are different challenges in urban and rural areas and, indeed, in those that fall between the two, as much of my constituency does. There remains a question of how we can work together to properly design, build and proactively maintain our roads and highways. Individual councils acting alone cannot hope to solve that problem by doing their own thing in isolation.

Oxfordshire county council will soon cease to exist, thanks to the local government reorganisation. The question remains: what of the future? I conclude by emphasising that the Oxford-to-Cambridge growth corridor aspirations will certainly not be achieved if our councils are starved of funding and our highways further deteriorate.

14:51

[Perran Moon (Camborne and Redruth) (Lab)]

Meur ras —it is an honour to serve under your chairship, Mrs Barker. I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this important debate.

I want to focus on SEND and home-to-school transport. On SEND, Cornwall is the 11th lowest funded of 151 local authorities, receiving less than half the per pupil funding of Kensington and Chelsea. Over the last eight years, the number of our pupils with an EHCP has almost doubled, but the delays in issuing EHCPs are far longer than average. In Cornwall, two thirds of those waiting for an EHCP wait for more than 20 weeks, compared with about 50% in England, meaning more stress and uncertainty for Cornish children and their parents.

In a very large, long and remote coastal region, the additional costs of transport show up persistently in every aspect of Cornish life. Cornwall council’s expenditure on home-to-school transport has increased by nearly 300% over the past seven years—a far steeper rise than for our urban counterparts. When it comes to funding more broadly, being a coastal community with some of the UK’s finest beaches is actually a double-edged sword; in fact, it could be argued that we are damned by our natural beauty. Significant in-migration by wealthy English retirees not only places additional pressures on healthcare and our housing market but masks the true extent of deprivation in Treasury funding models.

In my constituency, the average weekly wages in Camborne, Redruth and Hayle are nearly £100 less than the national average, and child poverty is currently at 35%. We were very thankful that the costs of being remote and coastal were recognised in the local government funding settlement for adult social care, but the cost pressures for home-to-school transport were not reflected. I respectfully say to the Minister that a principle cannot be half applied.

[Helen Morgan]

The hon. Gentleman is making an important and fundamental point: everything costs more when it is spread out. For example, bin collections cost a huge amount more for unitary authorities. Home-to-school transport is not just for children with SEND but for children who cannot catch the bus to school because there is no bus. Everything costs a vastly significant amount more than when people just live down the road. Does the hon. Gentleman agree that it is really important that that is reflected in Government funding formulae, because it is crippling our councils?

[Perran Moon]

I do agree with the hon. Lady. I cannot believe that in the 21st century it is beyond the wit of man or woman to calculate the major costs that affect our rural and remote coastal areas compared with the costs for our urban counterparts. We are not trying to deprive the services available in urban areas; it is about raising the level of services for remote coastal and rural communities to the same standard.

That brings me back to my central point. Despite the rising costs and demands, Cornwall is being asked to do far more with far less, which is why we need a comprehensive, non-mayoral, Cornwall-only devolution deal that allows us to overcome some of the challenges of life in the Duchy.

14:56

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Mrs Barker. I thank the hon. Member for North Shropshire (Helen Morgan) for setting the scene incredibly well. It is good to see another supreme example of her fighting for her constituents, as she always does.

As the Member of Parliament for Strangford, a largely rural constituency, I am acutely aware of the challenges that face those in our rural communities. I know the Minister is not responsible for that, but I am here to support the hon. Lady as she puts forward the case on behalf of her constituents, and I look forward to the Minister’s response. It is nice to see him back in his position again—he was a Minister before and then an active Back Bencher, and he is back again as a Minister. Well done to him for all his efforts.

There are growing concerns about the level of support being provided to upper-tier rural authorities in England. England’s largest councils are expected to receive just 2p in Government funding for every £1 of their rising costs over the next three years. This comes as funding is increasingly being directed towards urban areas, leaving local rural authorities facing an estimated £11 billion funding gap. The consequences could be significant, with rural councils in particular likely to have to reduce and make cuts to everyday services such as libraries and community social care. Other hon. Members have spoken about those issues, as will others after me.

Analysis by the County Councils Network shows that county and large rural councils will face an additional £7 billion a year in service costs by 2029. This follows its warning at the beginning of last year that Government cuts are being severely felt in rural areas, with around four in five rural local authorities stating that they felt they were in a worse position following the autumn Budget and the local government finance settlement. The network has called for a reinstatement of “remoteness” in the local government funding formula. There is perhaps a case to be made—as the hon. Member for North Shropshire did exceptionally well—that remoteness must be a priority and part of the scoring card when it comes to funding, to properly recognise that the delivery of services across sparsely populated areas costs considerably more, and the impact on rural communities.

As always, I give a Northern Ireland perspective, not because the Minister has any answering to do for it, because he does not, but to give examples of where some of what the hon. Lady and others have said relates to the situation back home in Northern Ireland. While Northern Ireland does not have a two-tier local government system—our 11 councils are single-tier authorities—our rural councils face many of the same challenges. One is that our councils play a much wider role than simply delivering standard local services. That is why it is of great concern that local community initiatives in rural areas are increasingly vulnerable to having their funding withdrawn.

Some of the things that affect us in Northern Ireland also affect the hon. Lady’s constituency here on the mainland. In March, concerns were raised about the potential closure of a youth forum in the Londonderry area due to funding difficulties. The forum highlighted that rural isolation and social exclusion are precisely the types of issues that these services are trying to address—the very things that the hon. Lady and others have specifically requested.

I was elected as MP for my constituency of Strangford in 2010, and in 2015 the Ards and North Down rural partnership was established to act as the administrative and financial lead for the Northern Ireland rural development programme, an excellent programme that did great work in my constituency and indeed across the whole of Northern Ireland. The programme was completed in 2022, but that work must not be allowed to stop there. We must build on that success with sustained investment.

The Ards and North Down rural partnership is still working and doing good things, and the Government back home have recognised that rural isolation and rural needs are specific. The Ards and North Down rural partnership demonstrates the difference that targeted investment can make in our rural communities, from improving the local play parks, green spaces and the harbour areas, to supporting community centres.

Does the Minister agree that equality does not always mean treating every area the same, and that rural areas should receive funding that recognises the additional cost of delivering services across the countryside and in rural communities? In the Prime Minister’s statement yesterday—which we all welcome, by the way; it would be churlish for anyone not to welcome it—he set a positive scene and laid out his vision for the United Kingdom. He mentioned hope, which was one of the words that I took from his statement—I was there for his statement but not for all the answers to Members, because there were other things to do. We must ensure that policies are rural-proofed. My real fear is that we are not doing so and that the losers are the most vulnerable and isolated communities. Economies of scale and isolation issues must be weighted when balancing the books.

I look forward very much to the Minister’s response to address this issue for each rural area, and thank him for his response to the debate. How will the Government deliver support for upper-tier local authorities? That is the question the hon. Lady put forward, and it is the one I am asking as well.

15:02

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

It is an honour to serve under your chairship, Mrs Barker. I thank the hon. Member for North Shropshire (Helen Morgan) for securing this debate, which is important and relevant to me.

I will probably shorten my speech a little, as the Minister is getting a double dose of Cornwall this afternoon—I apologise for that. We underwent major local government consolidation early in Cornwall. We became a unitary, from a county council and six districts, in 2009. We are now the third largest unitary in the country by population and the fourth largest by area, but the 12th least densely populated of the 62. That creates quite unique opportunities, but also challenges.

I want to talk a bit about third-tier councils, because the establishment of our large unitary coincided with austerity. The council withdrew from quite a lot of services—all but the most statutory, really. That meant that the third-tier town and parish councils stepped up and took the reins, preventing the sell-off and closure of all sorts of things, such as green spaces, toilets, libraries and leisure centres—so much of the infrastructure that made our town special. It is great having services run by the people who live there and use them, but there are issues that need sorting out.

When third-tier councillors’ councils grow, they still get no pay or expenses. We also have conduct issues clogging up the desks of upper-tier council monitoring officers, who do not have the teeth to sort them out. Precepts in towns have grown significantly larger than in rural parishes. People on one side of a road might be paying £30 for their precept, while those on the other side are paying for everything in the town, so their precept could be £400-plus a year, and obviously those parish residents will still rely on those services.

Although third-tier councils are now big in Cornwall and have big budgets—£5 million or £6 million—they are still not recognised or trusted to get external funding. Everything has to come through the unitary, which can lead to a parent-child relationship. In the previous White Paper, we had the support of the previous—and now current—Secretary of State for sorting some of those issues out, as well as things like remote voting and meetings for third-tier councillors. I really hope the Department will pick that up again for third-tier councils.

On devolution, obviously the Prime Minister made a statement yesterday, which was very welcome. The focus on further devolution and growth in every postcode is very welcome to those of us in places like Cornwall. We did have a devolution deal back in 2015. It was the first non-metropolitan devo deal. We got a level 2 deal in 2023. There have been a number of situations in which we have benefited quite a lot. On public transport, for example, we got the power to franchise buses and make enhanced partnerships back in 2015.

So far, we have gone into enhanced partnerships, but we are now running a pilot to see how franchising could work in rural areas, where it is much more difficult to make it work. We picked it up and ran with it. We were the first rural area to introduce smart ticketing, for example. It will be interesting for us and North Yorkshire to see how franchising could be possible in a rural place.

Devolution could also be really important for housing. We are working towards a memorandum of understanding with Homes England, but a full strategic place partnership would also be helpful and important to us. Turning to economic growth, we lost all our EU funding in 2020, which led to a real slowdown in our growth. We did have the shared prosperity fund, but that is now finished. We had access to the Kernow industrial growth fund, which was fantastic, but we continue to need economic growth support in emerging areas, which chimes and aligns very well with the Government’s industrial strategy.

The Prime Minister has been talking a lot about the devolution of post-16 skills. In Cornwall, we know our businesses—so does the council, and the further education providers. That could work really well for us, so I am really excited to talk about a future devolution deal with the Prime Minister, as well as making the epic trip to Manchester and going to No. 10 North.

Although devolution is an exciting example of progress, it cannot overcome the financial pressures facing our more rural councils. We have heard some examples of things that cost more. Cornwall’s core spending power fell between 2010 and 2018 because of austerity and that Conservative Government, but funding has improved since then and the Government have made efforts to create a fairer funding settlement. Nevertheless, we are still below others in real terms. We have also used the second homes council tax premium, which brought in around £23 million, but even with that we remain in that position.

Rurality and peripherality make things cost more. We have heard some examples already, but I want to mention temporary accommodation, as a room in a Travelodge costs £50 in the winter and £100 in the summer. Meanwhile, home-to-school transport is crazy expensive. We cannot use buses and end up using taxis, and there are long distances involved, which makes it difficult. Furthermore, contracts for emergency accommodation also go through the roof in the summer. In children’s social care, there are very few providers and contracts get very few bidders. It is very difficult and we end up having people placed out of Cornwall, which is a very long way to go and is not good for the population.

There is also a population increase in the summer; we get about 4 million visitors. That is fantastic and it is good for our economy, but it increases demand on vital services, particularly on things such as environmental health, waste collection and emergency services, as well as public amenities. Something like an overnight visitor levy could be used for that, and we are quite excited about the potential for that to be devolved.

In conclusion, Cornwall highlights the opportunities and the challenges of rural upper-tier authorities. We are further down the line than a lot of other authorities—we have had a unitary authority for a long time—and we have seen where that takes us, particularly having lost services that are then picked up by the third tiers. Devolution will be good for us because it will mean that those decisions are taken locally, but for rural authorities to really thrive, that funding needs to reflect the additional costs and pressures of where we are in those sparsely populated areas and the fact that transport in particular is so difficult for us.

15:09

[Edward Morello (West Dorset) (LD)]

It is an honour to serve with you in the Chair, Mrs Barker. I congratulate my hon. Friend the Member for North Shropshire (Helen Morgan) on securing this important debate. My very good friend, my hon. Friend the Member for Didcot and Wantage (Olly Glover), warned earlier against pitting different parts of the UK against each other. At the risk of flying in the face of that advice and angering the hon. Member for South West Norfolk (Terry Jermy), I will just say that West Dorset is the most beautiful place to live.

My rural community shares a lot of the same difficulties as everyone else here. My constituents are spread across small towns and villages, so distances are longer, there are fewer service providers and councils have fewer opportunities to achieve economies of scale. Almost half of Dorset’s residents live in areas that are among the 20% most deprived nationally in access to services. Whether it is GPs, dentists, post offices, shops, primary schools, access is much more difficult than in urban areas. As has also been highlighted, waste collection is difficult, vehicles have to travel further, highways teams have to cover more miles, social care workers have to spend more time travelling with patients, and a child with special educational needs has to travel a larger distance to reach the right school.

At the same time, Dorset has one of the oldest populations in the country: 31% of residents are aged 65 or over. Although I have repeated it many a time, and it may well not be true, my favourite fact about West Dorset is that if we were a country, we would have the oldest population in the world—we would be older than Japan. That matters because an ageing population creates additional demand for adult social care and other council services.

The Government have increased funding for local government, which is welcome, but our councils are still dealing with years of financial pressures and cuts alongside inflation, demographic change, the national living wage and increased national insurance costs. That was compounded by the change in the fair funding review 2.0 to remove rurality from all grant formulas bar adult social care.

The cost of providing home-to-school transport for children with special educational needs has risen 33% since 2016-17. Dorset has the seventh highest weekly cost for children with SEND of any authority in England. Children can live a long way from the specialist provision they need, with fewer available capable specialist providers, and transport costs more. The same applies to adult social care. There are fewer providers willing to operate across rural areas because travelling between clients takes longer. Those providers that do operate in rural areas can charge more to cover the additional time and transport costs. The council has more roads to maintain, more miles to travel and more dispersed communities to serve. A funding formula that treats rural and urban areas the same does not produce a fair outcome, as has been highlighted.

In West Dorset, bus frequency has fallen by an astonishing 62% since 2010, and 10 of Dorset’s 14 towns have been identified as transport deserts or at serious risk of becoming one. Just over one in five people in large parts of rural Dorset cannot reach a town centre within 30 minutes by public transport, yet Dorset received just £3.8 million in the bus services improvement plan funding, compared with the £11.6 million allocated to our neighbours in Devon. The funding formula needs to recognise rurality, population age, visitor number increases and accessibility needs.

We also need to look at the future of Dorset and the wider Wessex region. Since 2025, Dorset council has been working with Bournemouth, Christchurch and Poole council, Somerset council and Wiltshire council through the Wessex Partnership. Wessex has a population of almost 2 million people, and it already works together across areas including defence, clean energy, digital and life sciences. The partnership has developed a shared regional vision and is preparing to take on greater devolved responsibility.

The Government’s current devolution framework will create different levels of opportunity depending on which model an area achieves. It is estimated that mayoral strategic authority status could provide around £460 million in additional funding each year across the Wessex region, which is about £245 per resident, as well as an estimated £16 billion of additional economic output over 30 years. If other parts of the country receive powers, greater flexibility and greater funding, Wessex needs to be able to compete on a level playing field. I would ask that the Minister agrees to meet the Wessex Partnership to discuss devolution for Wessex.

If the Government want economic growth in every postcode, funding formulas need to recognise the real costs of rurality, ageing populations and providing services across large geographical areas. Rural communities should not receive less because delivering services simply costs them more.

15:14

[John Milne (Horsham) (LD)]

It is a pleasure to serve under your chairship, Mrs Barker. I congratulate my hon. Friend the Member for North Shropshire (Helen Morgan), and I declare an interest as chair of the all-party parliamentary group for rural business and the rural powerhouse.

This Government have rebuilt the local government funding formula and launched an ambitious devolution agenda, both in the name of fairness and moving power closer to the people. I question how that is working. Ministers say that the new funding formula matches money to need, and that by the end of the settlement, the most deprived places will receive 45% more funding per head than the least deprived. Nobody disputes that deprivation matters, but measuring deprivation in rural areas is not straightforward. According to the County Councils Network, county authorities will receive only £345 per head in grant funding against a national average of £526, and will therefore have to find more than 90% of any budget increase from council tax alone. That means they will receive roughly 2p of any additional Government money for every £1 of new cost pressure, while metropolitan boroughs will receive 42p. That is an enormous difference.

Although individual councils vary, the Rural Services Network shows that rural residents already pay 70% more council tax per head than urban residents, despite lower wages on average. That gap is projected to widen every year of this settlement. As others have pointed out, the Government removed the remoteness indicator from every part of the funding formula except adult social care. How does a remote child cost less to reach than a remote adult? Part of the current recovery grant is also still allocated using 2019 deprivation figures, even though updated 2025 data already exists and is used elsewhere in the very same formula. That makes no sense and perhaps the Minister can explain.

There is an unspoken assumption that needs correcting: rural does not necessarily mean rich. Research into so-called pretty poverty in Cornwall shows real deprivation hidden behind a scenic view. Measures built to track deprivation in cities simply fail to spot it. The Government’s new devolution programme has the same design fault. Evidence that I have heard this year from rural bodies and local leaders is consistent. Combined authority structures, funding pools and business rates growth incentives were all built around city region economics first and do not necessarily work in the same way in rural areas.

One flagship funding tool, full retention of business rates growth, was piloted in Greater Manchester. Will the Minister say whether that model has been tested where the business rates base is small and slow growing, as it typically is in rural England? Again, in honour of my Cornish colleagues, Cornwall tried a version of full retention in 2018, and it had to give up its rural services grant as the price of entry. I would not want rural authorities steered towards a tool that rewards growth but lacks the tax base to successfully generate it.

If the Government are serious about devolution, it has to mean something for parish and town councils, not just mayors and unitary authorities. There is no proper funding settlement and no training offer for the clerks and officers who will be increasingly asked to take on responsibilities that have been devolved down from a disappearing district tier, as in my area of Horsham. With the best will in the world, they are not properly equipped for that.

The fundamental assumption of the fair funding formula is that more deprived, mainly urban authorities have had a raw deal compared with rural shire counties, but the clear fact is that every type of council has been struggling over a long period. My county council of West Sussex is carrying almost £200 million in debt under its dedicated schools grant for special educational needs. Even with the proposed 90% reduction in SEND debts, which is welcome, that still leaves £20 million to be stripped out of a general budget that is frankly already buckling under the strain. The Government’s policy risks forcing yet more cuts on services that have already been cut too far. Two thirds of spending in West Sussex is ringfenced, which means portfolios such as highways or buses—transport—have to bear the whole burden of any savings.

The new funding formula risks condemning councils across the country to failure, but they are mostly not Labour councils and it is hard not to see a political angle. Does a pothole cost more to fix in a deprived area than in a wealthier one? No, it does not. The cost of many council services is not related at all to deprivation, so it is wrong to build an entire funding formula around that one criterion. Local councils are not the main cause of deprivation, and neither can they be the main fix. This Government promised to help working people and to devolve power. Rural authorities are still waiting. I hope the Minister will commit to using 2025 data consistently, to reinstating remoteness across the whole formula, and to properly funding and training parish and town councils so that devolution reaches the communities it is meant to serve.

15:20

[Caroline Voaden (South Devon) (LD)]

It is a pleasure to serve with you in the Chair, Ms Barker. I thank my hon. Friend the Member for North Shropshire (Helen Morgan) for securing this important debate.

Before moving to rural South Devon in 2007, I had spent all my life living in and around major cities: Edinburgh, Sheffield and then London. After nearly 20 years living in the rural south-west, I can honestly say that I had previously not understood rural life because I had not lived it. I have since come to realise that the rural-urban divide is possibly one of the deepest divides in our country and one that is too often overlooked, especially by Governments made up of city and urban MPs who simply do not understand the reality of rural communities and fail to see the deprivation that lurks behind the hedgerows.

Those communities are often forgotten when spending decisions are taken despite a set of circumstances that mean we desperately need the Government’s financial backing. Incomes are lower due to the older average age, jobs are often seasonal and low-waged, people in rural areas travel almost twice as far as those in urban areas, and there is often no public transport. Healthcare is a challenge because community services have been cut, hospitals are miles away and hospital transport has all but disappeared. High-speed internet is crucial when services are scarce, yet broadband connectivity lags far behind urban areas. Banks, pubs and post offices are closing, hollowing out communities and increasing rural isolation. As the hon. Members for Camborne and Redruth (Perran Moon), for St Austell and Newquay (Noah Law) and for Truro and Falmouth (Jayne Kirkham)—all of them from Cornwall—have said, the high number of second homes, high house prices and low wages massively exacerbates the housing affordability crisis. In Devon, the full-time salary to house price ratio is 10.6:1—well above England’s average of 8.7:1.

Despite all that, funding is persistently driven into urban areas while rural communities are left behind. The previous Conservative Government forced councils to do more with less. Their policy to force local authorities to use their reserves to subsidise their revenue expenditure was deeply wrong and, as a result, six rural upper-tier local authorities are on the brink of issuing section 114 notices, which would effectively declare them bankrupt.

The current Government have committed to providing multi-year funding settlements for local authorities, which we welcome, but for rural communities the 2026-27 to 2028-29 settlement falls well short. The withdrawal of the rural services delivery grant was a huge blow to councils in Devon, costing about £14 million, and no rural councils benefited from the replacement funding or recovery grant.

The new formulas mean that local authorities in cities will have higher spending power than in previous years while rural shire districts will have less to spend. Under the local government finance settlement for this year, urban councils will receive 32% more per head in Government-funded spending than rural councils. Devon county council will receive £1,056 in core spending power per head compared to Hackney council’s £1,645 or Liverpool city council’s £1,598. It does not cost 50% more to provide services in Hackney or Liverpool than in Devon. In fact, I would argue it potentially costs less because of the rurality.

Furthermore, the Government’s 2026-29 local government finance settlement does not include any explicit support for rural upper-tier authorities. The new formula has included remoteness only as an uplift in the formula for adult social care. As my hon. Friend the Member for Horsham (John Milne) said, a rural child is not easier to service than a rural adult. It is utterly shocking that the Government do not believe that remoteness is relevant to the delivery of any other service, such as school transport or waste collection.

It goes way beyond the additional time it takes to travel. Rural councils have several other considerations that urban councils simply do not have to contend with, including requiring more service centres due to the spread-out population and more professionals to cover visits across a huge rural area. They receive fewer responses to contract tenders, perhaps only getting one from the incumbent provider, which leads to a market with increased prices for services.

There are physical constraints such as needing smaller refuse vehicles, especially on the narrow lanes near where I live in Devon. Those vehicles have to return to base to be emptied more often, and rural areas also need multiple depots for equipment and vehicles. Thus, they need more equipment to service the streets and more drivers.

Pockets of deprivation, often hidden by prettiness, are particularly hard hit. Social mobility for young people living in deprived rural areas is one of the lowest in the country. None of this is considered in the new funding formula outside of adult social care. I urge the Minister to review that.

Quite simply, the new system of allocation does not recognise that the sparse and isolated nature of rural areas drives higher costs for the delivery of essential services, creates challenges in recruitment of staff for key services and requires local authorities to provide a greater public subsidy for the provision of public transport. This is very much in keeping with a Labour Government that have persistently failed to acknowledge that every service is harder to deliver across rural areas.

Let me use Devon to illustrate why this service delivery is so tough. Rural Devon is a drive of over 100 miles from north to south. It would take me 10 hours to walk across just my constituency, which is a fraction of the county, and nowhere near the biggest. I am not sure how Manchesterism will translate to rural areas, but we cannot apply the same principles to a city of 3 million people and villages with just 10 houses and expect to see the same results.

The trajectory for rural councils over the next three years is deeply concerning. The very limited increase in Government funding will require service reductions or significant increases in council tax or business rate income to maintain core spending power. As has been said, rural residents will pay 17% more in council tax per head compared to urban residents this year, yet Government funding will be directed towards urban authorities.

The Government are relying on a regressive council tax to fund services in rural areas that it was never meant to. As a result of this funding settlement, by 2028-29 urban councils will have seen a 20% increase in Government-funded spending power, compared to only 2% for rural councils. How can that be fair? These are not just numbers on a spreadsheet; we are talking about people’s lives. From the growing number of children with SEND who cannot access the support they need to the closing of vital community spaces like libraries and leisure centres, this lack of funding has a real impact on people.

We are concerned by the Government’s decision to allocate additional funding within the local government finance settlement on a need and demand basis. It will jeopardise the sustainability of rural local councils. The Liberal Democrats oppose the three-year local government finance settlement, which does not go far enough in providing a truly fair funding settlement to all local authorities across the board. We urge the Government to provide rural councils with a funding settlement that reflects the true impact of rurality and sparsity of the areas they serve through the application of the fair funding formula.

The ability to provide services to people in my constituency and across rural Devon will only be made worse by the proposal for four unitary authorities recently chosen by the Government for the local government reorganisation in Devon. I urge the Minister to bear with me on this. That proposal from Labour-run Plymouth and Exeter will see those two cities massively expanded, to the great delight of their Labour MPs, and a new urban growth area based around Torbay, leaving a fourth authority—the bits that were left behind when the urban areas were gouged out—stretching 70 miles from Ilfracombe in the north to Salcombe in the south, but 100 miles by road. That authority will have to maintain a road network not dissimilar to the whole of Luxembourg’s with no major town to offer opportunities for growth and regeneration and the most deprived area of Devon to support.

[Helen Morgan]

The point of combined authorities is to derive economies of scale from placing urban and rural areas together. Some of those economies of scale can be driven by the density in the urban area. Does my hon. Friend agree that it makes no sense to split up the urban and rural areas in the way she describes?

[Caroline Voaden]

I absolutely agree. It makes no sense to any of us in Devon. I have spent the entire summer listening to constituents who are deeply distressed about what has happened, which leaves them in a rump rural local authority with no option for economic growth or regeneration.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

As a part-Devon Member of Parliament—the other part of my constituency is in Somerset—I entirely agree with what my hon. Friend is saying. The part of my constituency in Devon is 800 square miles and will form just part of an enormous rural authority. Does she agree that that authority does not have the fiscal power to sustain itself?

[Caroline Voaden]

I absolutely agree. The Government ignored local voices and went with the proposal that came fourth out of five in a public consultation, but was backed by Labour council leaders and Labour MPs who had the ear of Ministers and wanted to expand their cities. None of my constituents want it. I have spent the whole summer listening to distressed residents, as has my neighbour, the hon. Member for South West Devon (Rebecca Smith). The chosen proposal was a blatant prioritisation of economic growth for the cities of Plymouth and Exeter at the expense of the economic and social cohesion of rural Devon.

How do the Government expect this council to be financially viable when they deem remoteness irrelevant to the delivery of every service except adult social care, and when no one can even work out where the authority could be based? How can rural Devon expect growth in every postcode when there is clearly no consideration of the economic growth potential for rural Devon in the chosen proposal?

The Prime Minister talked yesterday about supporting rural areas and not creating a two-tier country, but the Government have created a two-tier Devon. I urge the Minister to listen to the many Devon MPs and the local people, go back to the drawing board on the reorganisation in Devon, look at the alternative options that were on the table, and pick one that will not leave rural communities struggling even more than they are now. If we are to have any hope of bridging the urban-rural divide, a fair funding settlement for rural councils and local government reorganisation that works for rural areas must be the start. If the Prime Minister wants a political system and economy that works for every person in the country, the Government must change the way they value and recognise rural communities.

15:31

[Lewis Cocking (Broxbourne) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Barker, and I welcome the Minister back to his place. I commend the hon. Member for North Shropshire (Helen Morgan) for securing this important debate and giving us the opportunity to speak about the rural areas that this Labour Government are neglecting.

My constituency is home to a handful of farms and the beautiful Lee Valley regional park. Although it might not be the most rural, I am well aware of the pressures faced by rural communities, which have been made clear by hon. Members across the Chamber today. Having started off with the infamous family farm tax, the Government are now moving on to implement the unfair funding review. This change in the funding formula for local government seems to have been designed with the express purpose of stripping away funding from rural areas just to hand it to urban ones.

[Noah Law]

Does the hon. Member recall the enormous slashing of the budget of Cornwall council under his Conservative and Liberal Democrat coalition Government?

[Lewis Cocking]

Lots of difficult decisions had to be made. I politely say to the hon. Gentleman that his party is in government now. We will see the mettle that they are made of in the coming months, when they have to make difficult decisions to produce their Budget, and we will also see how that goes down with the British people outside this place.

Many rural councils face real challenges across the board, and now they are expected to cope with even fewer resources. In my area of Hertfordshire, a semi-rural local authority, the county council is facing a reduction in funding of around £50 million a year. That is thanks to this Labour Government, despite the council already being under extreme pressure from an unfavourable SEND funding formula. Under that formula, Hertfordshire receives one of the lowest funding allocations per head. It would receive millions more if it were funded at the same rate as other areas.

When it comes to SEND, rural authorities lose out. Inner London boroughs receive thousands of pounds more in high needs block funding per pupil. For example, a child in Camden is allocated four times as much as a child in Yorkshire. It should not matter where someone is born in the country; children with special educational needs deserve the same resources. I am sure that all hon. Members from right across this House can agree with that.

Similarly, rural authorities have been ignored throughout this Government’s top-down local government reorganisation. As we have seen in Leicestershire, Nottinghamshire and other areas, rural towns and villages are now being absorbed into new unitary authorities dominated by cities. That will only result in rural areas being more marginalised and left even further behind.

[Perran Moon]

If His Majesty’s Opposition are so unhappy about the local government reorganisation, why is there not a single Opposition Member here to make that point other than him?

[Lewis Cocking]

I thought someone might make that point in this debate. I have been in debates where no Labour or Liberal Democrat MPs have turned up. When I go out and speak to my constituents about how, when they turn on the TV, the Chamber is not full, I explain to them that there are many calls upon Members’ time. I gently say to the hon. Member that some constituents will watch debates that he does not attend and be unhappy with that, so we could maybe think about that before we make interventions on that topic.

As I was saying, this Government’s top-down local government reorganisation has seen rural communities left behind. Rural communities and authorities have also been hugely hit with a high increase in housing targets, forcing them to build over the green belt and ruin the character of their areas. They have increased by up to 487%, while many Labour-run urban areas have seen their targets decrease. The new Prime Minister likes to talk about devolving power to every postcode, but the only changes that people in rural areas have seen are money and power being taken away from them. They are the people that this Labour Government should champion: the hard-working people who have too often been left behind. Instead, they are being sidelined and ignored. The Government need to take time to actually listen to the rural community and protect their way of life.

I may not represent a very rural part of this country, unlike other hon. Members in this room, who have so passionately spoken about their rural areas, but it does not take much to work out that forced local government reorganisation, increases in taxes and reduced funding formulas are the exact opposite of how the Government should support rural local authorities.

15:36

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

It is a pleasure to serve under your chairmanship, Mrs Barker, and to hear the debate and the passion that Members have for their areas. I quite liked the county competition for the most beautiful part of England, but I am sure that we can agree that England is magnificent coast to coast, and we should all celebrate that.

I will respond to the debate in due course, but I want to start by laying out some of the differences. We are using common language for things that are very different; I think that we are conflating devolution and the powers that will be devolved with the fair funding review and the funding that goes to local authorities. In some cases, there is no clarity on what a regional authority will do to the local authority and community governance, whether that is neighbourhood governance or town and parish councils. In this debate, it has become one and the same. I do not criticise that, and I recognise why that happens. We are all here to represent places and not units of government, so we care about whether our communities are getting the resources needed.

[Perran Moon]

On that specific point, part of the reason why there is a conflation of devolution and the local government funding settlement is that, because our local councils in some areas are so deprived of funding, they have to get funding from something like a visitor levy, which would not typically be allocated for that, in order to supplement the services they need to provide. That is potentially why there is a mix-up of views about devolution and the local government settlement. Does the Minister recognise that point?

[Jim McMahon]

In a sense, I recognise that there will be differences of opinion, depending on which local authority and what part of the country Members represent, about whether the fair funding review fully picks up all the particular circumstances. There might be more agreement on the sufficiency of local government finance. Whatever the allocation across the board, the fair funding review is intended to distribute it in the fairest possible way and in a transparent way, so that Members and councillors can see where the money is going to.

Since coming to power, the Labour Government have delivered long-overdue reforms to council funding through the first multi-year local government settlement in a decade. In doing so, we have delivered transformational changes to how councils are funded, which the public, our local government partners and Parliament have long called for. We have delivered on our commitment to give councils greater certainty and flexibility over their funding, ensuring that resources are fairly aligned to local need and simplifying the funding landscape by ending wasteful competitive bidding, which we all recognise pits one area against another.

The Government also have a very important role to play as an equaliser for local government income. During the course of the debate, I heard references to the amount of grant that individual councils get, and one grant total being compared with another. I want to be clear that the fair funding review is not intended to give every council the same central Government grant. That grant is intended to act as an equaliser for the system, so that in the end all councils have the resources to deliver the public service need in their local areas, while recognising that there are wide differences in England in the local tax bases of council tax and business rates.

As a result of our reforms, nine in 10 councils will receive funding that broadly matches their assessed relative need by the end of the multi-year settlement, up by about a third before the reforms. We recognise the different drivers in demand for services, the cost of providing them in different places and the different abilities of areas to raise council tax. We are therefore making funding available in such a way as to enable all local authorities to provide the same level of services to their residents.

For rural communities, the 2026-27 settlement was a key step in delivering a fairer system to address the issues that matter to local communities across England. It included recognising local circumstances, including differences in the cost of delivering services between rural and urban areas, and using the best available and most up-to-date data, including the latest indices of multiple deprivation to ensure that deprivation in rural areas is captured accurately. I will explain a bit more on that.

I heard references to the fair funding review not taking account of the differential cost of delivering services in rural areas. To be clear, we account for rural costs through the area cost adjustment, which is applied to all formulas. That adjustment captures the variation in wages, property rates, journey times, and a range of other factors that pick up the local variation that takes place. On top of that, we have a remoteness adjustment in social care. I hear representations that say, “Hang on. If it costs more to deliver adult social care in these areas, then surely children’s services and other services such as waste collection and other things ought to be included, too.” The area cost adjustment picks up that general difference of delivering a service in those areas. There is a balance here. We want a simplified system that can be scrutinised and understood. The more we adapt and change and really drill down on that, the more complicated it becomes, the more it has to be updated and the more that changes. There is always a balance to be had between simplicity, being understood and giving certainty over the multi-year settlement, while recognising the differences at a local level.

[Caroline Voaden]

The Minister says there is an area cost adjustment, and yet the leader of Devon county council says that Devon lost £14 million because of the rural services delivery grant, which was removed. How can those two things be true? If a grant that takes account of the fact that it is more expensive to deliver services in a rural area is removed and the council is £14 million short, the extra cost of rural services delivery has not been recognised.

[Jim McMahon]

We have always taken the view that the rural services delivery grant had, to put it mildly, a weak evidence base to support it. A political decision was made when the coalition Government came in and the grant that was given to largely urban authorities was taken away with almost no notice at all. It was replaced by the rural services delivery grant, but without the evidence base to support where it went to. Whatever criticism is applied to the fair funding review, what cannot be criticised is the evidence base that sits beneath it, because it is the best available data.

We are laying the foundations for reform more broadly. The multi-year local government finance settlement allows for £4.6 billion of additional funding to be available for adult social care in 2028-29, compared with 2025-26, including £500 million for the first ever fair pay agreement. The Government are driving the biggest transformation in children’s social care in a generation, with the families first partnership programme backed by nearly £3 billion of investment over four years, including a historic £2.4 billion over the multi-year settlement. That will support local authorities, police and health partners to provide families with the right support at the right time, shifting the system from expensive statutory provision to early intervention and prevention services.

The Government recognise that the current SEND system is not working for families, children or local authorities, and we have set out plans to reform it, backed by £4 billion of investment over three years, to deliver expertise without the need for statutory processes and embed new practice into the system. We have also heard calls for a solution to SEND deficits. All local authorities with a deficit will receive a grant covering 90% of their high needs-related deficit. The grant is projected to be worth more than £5 billion nationally, and is subject to each local authority submitting and securing approval for a local SEND reform plan.

We recognise the spending pressures from home-to-school transport in recent years, particularly in rural areas. At the fair funding review, we introduced a bespoke home-to-school transport formula that estimates local transport need for pre-16 home-to-school transport, based on pupil numbers and home-to-school distances. Furthermore, following consultation on the design of the formula, the Government increased the distance cap to 50 miles, rather than the originally proposed 20 miles. That change will see only 0.4% of pupil journey distances capped and will avoid unfairly penalising local authorities where children travel further to get to school.

We know that the cost of living and homelessness services are causing challenges too, and that homelessness can present in a unique way in rural areas. That is why we are providing more than £4 billion of funding for homelessness and rough sleeping services over the next three years, including £442 million launched last month, with new flexibility for areas to shape services to meet local need.

The Government are committed to making the changes necessary to transform public services and put local government back on its feet. Realigning funding with need and reforming the services that put pressure on local government will empower local leaders to deliver for their communities in rural areas and right across the country, as we have promised.

Devolution is a live issue for Cornish colleagues and those from other places. I give credit to Members for their representations on behalf of Cornwall and other areas. The truth is that devolution can happen only with local consent. We need areas to come forward, get local partnerships in place, and rally the support of local authorities. At a time of change in local government, when areas are also dealing with local government reorganisation, there is a lot for them to step up to. That is why we have provided support for local government reorganisation areas, as I covered in another Westminster Hall debate this week.

We want devolution to be rolled out to every area, but we recognise that the local partnerships in different areas are at different stages. There is an active discussion, which we should welcome, about what the role of community and neighbourhoods ought to be in the new settlement—devolution should go hand in hand with localism and empowerment—what the role of the local authority is, and what added value above and beyond that can be achieved if areas choose a mayoral model. To be clear, if an area is not ready yet for a mayoral model, the position is not that they cannot have devolution and that more cannot be given. I hope Members and people in local government continue to do what they have always done: rally their local areas.

15:48

[Helen Morgan]

I thank all hon. Members who have come along and made excellent speeches—particularly team south-west, who have turned out in force. They all highlighted the difficulties in delivering services in sparsely populated areas with vast distances to travel. They spoke about the impact on highways funding, the importance of generating economic growth, the cost of delivering SEND, and the proxy creation of district councils through the re-empowering of town and parish councils to deliver things that the unitary council can no longer afford to deliver because they are not a statutory requirement. They were really good speeches.

I am very disappointed that the Minister wound up with a speech that kind of told us that everything is actually fine. On the day that the local government finance settlement was announced, I sat on the Opposition Benches, along with all my colleagues, without a clue about what my local authority had been awarded because it was not findable, we had not been told and it could not be googled, yet everyone on the Labour Benches appeared to know what their settlement was and congratulated the Minister on its delivery. That is symptomatic of a pattern of this Government. They tell rural areas, “Everything is fine. It looks pretty. Go away and stop worrying, and actually, we are going to focus on urban areas.” We all recognise that urban areas need investment and are not thriving as they should be—this is not about pitting one area against another—but rural areas need fair funding and devolution. In a council that has stripped back every single employee that it can, there is no capacity to generate economic growth or transform the underlying financial structure of the council, because nobody has the time in the day to do it. They need that devolution funding to rethink how they deliver services in a sustainable way for the future. I hope the Minister will take those points on board.

Question put and agreed to.

Resolved,

That this House has considered Government support for rural upper tier local authorities.

15:50

Sitting suspended.

Employer National Insurance Contributions: Small Businesses in Hampshire

Wednesday 2nd September 2026 Westminster Hall

16:00

[Paula Barker (in the Chair)]

I will call Alex Brewer to move the motion, and I will then call the Minister to respond. I remind other hon. Members that they may make a speech only with prior permission from the Member in charge of the debate and from the Minister. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Alex Brewer (North East Hampshire) (LD)]

I beg to move,

That this House has considered the impact of changes to employer National Insurance contributions on small businesses in Hampshire.

It is an honour to serve with you in the Chair, Mrs Barker. I am equally privileged to be joined by a number of local business owners from North East Hampshire, who are in the Public Gallery.

Soaring energy costs, a business rates system in desperate need of overhaul and, perhaps the most damaging of all, a rise in employer national insurance contributions: individually, any one of those changes would be hard for a small business to absorb, but together they are too much for many small businesses across Hampshire. When a small business’s costs rise, that cost moves on to workers through stagnant wages, to customers through higher prices and to the business owners in lower profits. When the numbers simply cannot add up, the cost also moves on to local communities, through weaker local economies and hollowed out high streets. In Hampshire, where almost 98% of businesses are small businesses, that is felt by an entire county.

Small businesses cannot design their way around these tax changes. A big national chain can negotiate volume discounts, restructure its human resources or draw on a financial buffer; a beauty salon in Church Crookham or a care home in Ewshot cannot. That is why 35% of small firms say that they are planning to close or significantly scale back this year, and why these changes are, in plain terms, a jobs tax.

This matters because these are precisely the employers we need. The Government’s own research has warned that without urgent action, one in six young people could soon be a NEET—somebody not in education, employment or training. Hospitality, retail, personal care and customer service are the sectors facing the steepest rise in labour costs, yet they are the very sectors that traditionally give young people their first, vital experience in the world of work.

[Dr Danny Chambers (Winchester) (LD)]

A couple of weeks ago, I visited a business called Squeaky Clean run by Sam in Winchester. What was striking about that business was the number of students, young people and sixth-formers it employs, giving them their first job, getting them a CV and teaching them what it is like to work—to turn up on time, to take responsibility—before they go on to university and do other things. Sam told me that the single biggest difficulty she faces in keeping that business going is the rise in national insurance. Does my hon. Friend agree that we should be looking at this as a matter of urgency, not just for those businesses but for young people’s opportunities?

[Alex Brewer]

I wholeheartedly agree. That is the exact crux of the issue, and it is borne out in the data. The Bank of England decision-maker panel revealed that 46% of firms nationally have cut staff because of these changes, and that 20% have paid lower wages than planned. Nationally, small businesses account for 60% of private sector employment, so when they pull back it is not a footnote to the labour market; it is the labour market.

Nowhere is that clearer than in the hair and beauty sector. Kerry Mather has run KJM Salons in Fleet for 36 years, employing around 20 people including six apprenticeships, training a new generation in a key town centre location. In the past decade, apprenticeships in the UK hair and beauty industry have dropped from nearly 19,000 to 3,000. If we are not careful, soon there will be no apprenticeships left.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing this debate and I will echo both what she has said and what the hon. Member for Winchester (Dr Chambers) said in his intervention, because the situation is the same in Northern Ireland.

According to the Northern Ireland inter-departmental business register, small businesses and microbusinesses make up the vast majority—about 90%—of Northern Ireland’s local economy, with almost 83,000 registered businesses employing fewer than 10 people. These businesses are not faceless conglomerates; they are the family-run corner shops, local butchers and small builders across my constituency and the constituency of the hon. Member for North East Hampshire (Alex Brewer).

Echoing the hon. Lady’s opinion, the Federation of Small Businesses Northern Ireland has explicitly warned that these surging costs are forcing independent retailers to slash staff hours, cut back opening times and put growth on ice. Does she agree that this issue lies on the shoulders of Government and of the Minister in particular, and that this anti-business policy must stop before it pushes vital high street traders to the wall?

[Alex Brewer]

I thank the hon. Member for his intervention and I agree that this is a matter for Government, which, of course, is why I am raising it today.

The pressure compounds, of course, where a workforce is already stretched. Vehicle repair already loses around 1,700 workers a year. The Institute of the Motor Industry says:

“Protecting that workforce is not just a matter for bodyshops and garages—it is a matter for insurers, fleet operators, and ultimately for every driver who needs their vehicle repaired.”

Foster and Heanes, a name that is well known in North East Hampshire for providing MOTs and repairs, sits squarely in the path of that shortfall. Where there are no staff available to repair a vehicle, the consequences ripple out to every tradesperson who needs a van back on the road and every local supply chain that depends on vehicles moving on time. In a constituency with limited bus infrastructure, the school run is also affected, because for many families there is no alternative but to use a car.

As my hon. Friend the Member for Winchester (Dr Chambers) and the hon. Member for Strangford (Jim Shannon) have said, such business challenges are of course felt across the country. Some 69% of businesses cite employer national insurance contributions as one of the top three cost threats to UK labour market competitiveness, while business confidence has fallen—even since the market turmoil of autumn 2022, which is a really damning indictment of this policy. A quarter of firms cut back investment in the very quarter that these changes took effect, making it no surprise that growth under this Government has never once crept above 0.6%.

The policy is just so hard to understand given the rhetoric used by this Government. There is talk of growth, talk of apprenticeships and talk of opportunities for young people, but the action seems to be the opposite—fewer jobs, fewer apprenticeships, less business investment and an economy that continues to stagnate. Small business owners need to understand how the Government can justify this policy.

Nowhere is the policy harder to defend than in health and social care. This year alone, independent care providers have been billed an extra £940 million. Ministers point to additional social care funding, but for providers on the ground that funding is little more than a consolation prize, because the Government voted down every single Lib Dem amendment tabled in the House of Lords to exempt care and early years providers from this rise. It has landed on a sector that is already in profound crisis and that simply cannot reduce its workforce to cope.

Hundreds of thousands of people are currently waiting for care, many of them stranded in hospital beds simply because the care they need is not available, which piles more strain on to the NHS. Liberal Democrat analysis found that almost 900,000 people had their request for care denied in the last financial year, while—tragically—a further 6,000 people died while waiting for their care to be approved. This policy does not simply squeeze care providers’ margins; it deepens a crisis with a real human cost.

That gets to the very heart of the matter. At the centre of this situation, as local business owners in North East Hampshire have told me, are people. Good employers who pay their staff a fair wage, who train and invest in their teams and who contribute to the communities in which they operate are being squeezed to breaking point.

Having barely recovered from the covid years, service and retail businesses no longer have the financial buffers they once had. That means their staff lose out not just on a pay rise but on a Christmas party or a team training day, or perhaps their equipment is not replaced as regularly or they do not get a bonus. Whatever the consequence, it is people who are impacted—the ones who this Government claim they want to support.

Hampshire’s experience and the national picture are one and the same story, but none of this was inevitable. The Office for Budget Responsibility itself says that firms will pass on 60% of the higher costs, whether through reduced wages or higher prices. Coupled with five consecutive years of falling living standards, the changes to NICs are nothing short of regressive.

There is no doubt that our public services need funding and that our country’s infrastructure needs urgent repair, and I am the first to call for those things, but there is a fair way to do this—and one that will not strangle the UK’s economic growth. The Government must focus on taxing those with the broadest shoulders so that they contribute more through a higher digital services tax, on overhauling the broken business rates system, on ensuring that enormous multinational corporations are paying their fair share for doing business in the UK, and on reversing the Conservatives’ banking tax cuts.

Positive change is possible. The Government’s steps towards cross-party discussions on social care and the 20% cut in business rates for pubs, clubs and music venues are welcome, but we must go further. Any relief to those sectors cannot leave NICs off the table. Today and every day, I represent the brilliant North East Hampshire business community. Small businesses are the engine room of the British economy, so I call on the Government to give them the certainty they need to invest, grow and create jobs. Our businesses should be thriving, not barely surviving.

16:10

[The Financial Secretary to the Treasury and Paymaster General (James Murray)]

It is a pleasure to serve under your chairship, Mrs Barker. I thank the hon. Member for North East Hampshire (Alex Brewer) for raising this issue today and for bringing representatives of businesses in her constituency to Parliament to listen to this debate about such an important issue.

As the hon. Member mentioned, the Government are prioritising growth. In the first half of this year, we were the fastest growing economy in the G7. The Government’s vision is to make sure that growth is felt in every community, high street and postcode. Small and medium-sized businesses are central to that ambition, because they play such an important role in every community across the country, creating jobs, supporting local economies and helping to drive better living standards.

Sustainable economic growth depends on stable public finances. Fiscal discipline has to be the bedrock of economic stability, and that stability is necessary to support investment, confidence and long-term growth. As hon. Members will know, the Government have taken decisions on tax, welfare and spending in order to repair the public finances, protect economic stability and fund the public services on which families and businesses rely and into which the hon. Member for North East Hampshire called for greater investment.

As part of that wider fiscal consolidation, changes have been made to employer national insurance contributions. Those changes were introduced from April 2025 and were accompanied by significant protections for smaller employers, including the more than doubling of the employment allowance to £10,500. That means that around 900,000 employers—around 40%—will have no employer national insurance liability at all. In North East Hampshire alone, around 2,300 employers benefited from the employment allowance in ’25-26. Overall across the country, the employment allowance was estimated to be worth around £7.4 billion in the last tax year.

In addition, businesses can claim employer national insurance contribution reliefs, including for under-21s and under-25 apprentices, which are worth around £2.5 billion a year. That means that employers pay no employer national insurance contributions for apprentices under 25 or employees under 21 on earnings up to £50,270.

The UK’s 5.7 million small and medium-sized enterprises are central to growth across the country. The Government are backing them to succeed, supporting entrepreneurship and helping people to live well in every part of the country. Again, I thank the hon. Member for securing today’s debate.

Question put and agreed to.

16:13

Sitting suspended.

Global Tin Availability

Wednesday 2nd September 2026 Westminster Hall

14:30

[Perran Moon (Camborne and Redruth) (Lab)]

I beg to move,

That this House has considered the impact of levels of global tin availability on the economy.

Meur ras, Mrs Barker. It is an honour to serve under your chairship once again for such an important debate, not just for the UK’s domestic energy security but for global climate change. We were expecting more numbers when colleagues thought this was a Tinder debate, but when I explained that it was a tin debate, the numbers dropped off slightly.

The ill-informed may associate tin with cans, but in fact our cans are made almost exclusively of aluminium and contain no tin. More learned colleagues will know that tin, which is used in virtually every electrical device, is increasingly indispensable in the technologies that underpin modern industries. The digital economy, the green economy and the artificial intelligence economy—tin is foundational to each. However, as with other critical minerals, the overconcentration of processing and supply among a small number of countries a long way from western Europe presents massive economic and geopolitical risks. While debates about critical minerals are often focused on lithium, tungsten, nickel and rare earths, tin is often inexplicably overlooked.

I have to declare an interest, not only as an officer of the all-party parliamentary group on critical minerals but as the MP for the constituency of the last tin mine in the country to close in 1998. However, it is not only in Camborne and Redruth that the stirrings of excitement are almost palpable. Every single Cornishman and Cornishwoman across the globe will celebrate the return of an industry that goes way beyond just a job. Cornish tin may invoke something far more visceral and emotional, but before becoming a little starry-eyed about the return of Cornish tin mining, I feel it is incumbent on me to highlight tin’s new practical applications, the strategic case for it and the opportunity that we have in this country to rise to the challenges of global supply constrictions.

About half of all tin is used as solder for electronics. It is simply unrivalled in connecting components on circuit boards, enabling electrical conductivity while preventing oxidation. As a result, it is integral to almost every piece of modern technology—every smartphone, laptop, data centre server, semiconductor, telecommunications network and advanced manufacturing system. They all totally rely on tin. Without tin, there are no circuit boards, and without circuit boards, there is no new industrial strategy.

The 21st-century growth sectors—those at the global technological cutting edge—are increasingly driving demand for tin skywards. Electric vehicles require up to three times the tin of a combustion engine vehicle. Tin demand for solar panels has trebled over the last five years. Tin is required in 5G infrastructure, emerging battery technologies and renewable energy.

Interestingly, tin is increasingly important in the development of AI. AI is often discussed in terms of software and algorithms, and less so the vast physical infrastructure that sits behind it, but from the racks to the power modules and networking switches, tin is essential to the physical architecture. In the fabrication of advanced AI chips, molten tin droplets are struck thousands of times per second by high-powered lasers as part of the extreme ultraviolet lithography process used to manufacture cutting-edge semiconductors.

As Governments and companies invest billions in data centres and computational capacity, demand for tin in the UK is soaring. In the growth-driving IS-8 sectors alone, demand is expected to grow at an average of 19%, year on year, until 2035. Between now and then, a cumulative total of more than 27,000 tonnes of tin will be required.

Here is the crux of the debate. Although demand is rapidly expanding, huge questions remain about the security and resilience of global supply. Extraction and processing are currently heavily concentrated in six countries: the Democratic Republic of the Congo, China, Indonesia, Myanmar, Bolivia and Peru. Those countries currently supply over 90% of primary production, while China alone refines more than half of global tin.

With that comes blindingly obvious risk. We have seen in the strait of Hormuz what happens when a state weaponises its control of a choke point in global supply. The ramifications spread rapidly through entire economies. With tin, the UK is even more exposed to such global shocks because we currently produce none. We have already seen what happens to pricing with localised disruptions over the past few years: Myanmar’s 2023 Wa state mining ban; export licensing issues in Indonesia; and military conflict in the Democratic Republic of the Congo.

Because the tin market is relatively small in volume compared with other metals, it is the least traded by volume on the London metal exchange. Those modest disruptions have fuelled massive price increases. In 2025, the tin price surged 40% and has rallied a further 34% this year to date, rising to nearly £40,000 a tonne. Come 2035, there will be an expected shortfall of 85,000 tonnes per year in global supply. I will say that again: come 2035, there is expected to be a shortfall of 85,000 tonnes per year in global supply.

The challenge with tin is also one of geology and ethics. Many producing regions are experiencing declining ore grades, often between 0.3% and 0.8%—I will come to it later, but the grade at South Crofty is well over 1%—and that means greater volumes of material must be processed to achieve the same output, which inevitably increases costs. At the same time, there are legitimate concerns about environmental impacts, labour standards and illegal mining activity throughout the global supply chain.

I ask the Government to recognise the following. First, tin is fundamental to our advanced economy. Secondly, demand for tin will continue to far outstrip the inherently risky global supply chain. Thirdly, therefore, tin production and processing should be considered of strategic national importance, and an investment case for a tin smelter, based on UK economic security, should be developed as a priority.

When it comes to UK critical minerals, we are falling well behind competitor states such as the United States, Canada, France and Australia. The US has announced more than $40 billion in funding for critical minerals projects since 2022, alongside major equity stakes in domestic mines. Our friends and neighbours in the member states of the European Union have committed more than €6 billion to critical mineral projects in this year alone. The UK has committed a tiny fraction of that sum.

In that context, I turn back west to Cornwall. For four millennia, Cornwall has supplied tin to Britain and the world. Tin mining is woven into our history, identity and DNA, nowhere more so than in my constituency of Camborne, Redruth and Hayle, where the old engine houses still grace our landscape.

Tin is once again one of Cornwall’s greatest opportunities. Anchored by £28 million of National Wealth Fund investment, Cornish Metals is on course to reopen the South Crofty mine that shut 30 years ago. Hopefully, that will be achieved in 2028. South Crofty has the highest grade of unmined tin in the world. It is expected to produce up to 4,700 tonnes annually, equivalent to up to 1.6% of globally mined tin production, which could meet the demand from Britain’s growing IS-8 sectors. That is one mine; there are hundreds of mines across Cornwall with critical minerals. The range of those critical minerals is yet to be defined, but there is an awful lot of exploration going on at the moment. Nationally, this offers an opportunity to strengthen domestic supply resilience, reduce dependence on overseas extraction and support the development of strategic industries.

For Cornwall, South Crofty could be transformative. My constituency of Camborne, Redruth and Hayle contains some of the most deprived neighbourhoods in the country. Weekly median wages are £95 less than average, and the number of young people claiming unemployment benefits has risen by 26% this year alone. The opening of South Crofty will directly support hundreds of skilled jobs and thousands more in the wider supply chain. Multiplying that by the number of mines shows the importance of critical minerals to the Cornish economy.

If we are serious about good growth being felt in every postcode, we must champion this kind of investment. I have previously raised concerns in the House about the UK’s domestic processing and refining capacity. At present, tin mined in Britain would need to travel to east Asia for processing before returning in a form that British manufacturers can use. That is economically, geostrategically and environmentally dire. What steps will the Government take to strengthen domestic critical minerals supply chains? What progress has been made in implementing the critical minerals strategy? What consideration has been given to supporting domestic processing and refining capacity? Can energy support schemes such as the British industrial competitiveness scheme play a greater role in ensuring that our critical minerals projects remain internationally competitive? I look forward to the Minister’s response.

16:43

[Noah Law (St Austell and Newquay) (Lab)]

I thank my constituency neighbour, my hon. Friend the Member for Camborne and Redruth (Perran Moon)—the Tin Man —for securing this important debate. I would like to concentrate our focus, no pun intended, on the midstream and downstream applications of tin, of which Cornwall is the cornerstone and which is an important part of the supply chain, as well as on some of the blockers to securing the supply that my hon. Friend talked about so eloquently. That is not to say that I do not worry about the upstream mining opportunities, but it is fair to say that Cornwall’s riches are abundant on that front. Yes, there will be bumps in the road, and yes, there will be successes and failures, as there have always been in the relatively high-risk business of mining, but what I really worry about is securing midstream processing. In the case of tin, it is the crucial smelting process that will enable us to keep our supply chain onshore.

I will give a brief nod to Cornwall’s other, perhaps less famous but equally important critical minerals—namely lithium and tungsten, which are under our feet today. There are many more, but it is fair to say that, as it stands today, the big three—if I can use that term—are tin, lithium and tungsten. It is imperative that, across each of those three mineral resources, where we now have absolute clarity and visibility on the security of supply upstream, we start to think about the next stage of building those supply chains.

Practically, what do we believe the Government can do to ensure that that happens? Let me start with why the Government should be involved in such a high-risk business. The fundamental question is what market failure are we trying to resolve here? No matter what a person’s ideology or political perspective on this matter, we have to accept that there is no way to build a supply chain like this from scratch and just leave it to the whim of the market. The example of China, where there has been huge state involvement, is perhaps an extreme one, but there is no way essentially to build a domestic supply chain of this kind from scratch by simply leaving it to the whim of individual firms to go out and do the right thing. That is why the Government’s involvement is crucial.

We are not trying to solve a trick here; it is basic economics that the Government have a role to play in ensuring that we nurse the development of those supply chain projects, from a nascent idea or from something that various firms are thinking about on the side but which is not core to their business. Those junior miners already have a proper job on their hands, and it is not reasonable for the Government to snap their fingers and expect the processing opportunities to come about. That is where Government support is really valued.

We already have the Kernow industrial growth fund, and I am hugely grateful to the former Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), and to those in the Minister’s Department, for the work that they undertook to help us secure that investment, which is already being put to work on a pipeline of projects not just across this most promising of industries, but in many other Cornish industries besides. It will create those desperately needed jobs and help us to secure our industrial supply chains.

What can the Government do? It is imperative that we involve ourselves wholeheartedly in the upstream development of those projects, work with credible industrial sponsors and source the financial capital needed. That is not to say that we should do it all alone. Private and public partnerships—which we are already seeing through partners such as the National Wealth Fund and the industrial growth fund—need to thrive to ensure that we create the conditions for success.

Of course, there are many blockers, too, and it is important that the Department works with colleagues across the Government. For example, where there are challenges in getting a grid connection, securing appropriate transport links or unblocking planning barriers, we need a joined-up, cross-Government approach. I am proud to say that in Cornwall, the groundwork has been done. We have the visibility and the makings of a plan for how we might build that supply chain out. We have done the substantive work and the number crunching, and we have worked out what the capital need is and how much of it can be privately invested versus publicly catalysed.

I ask that the Minister continues his work with us. The work has already begun, and I am incredibly grateful for his time and interest in this sector, but I implore him to bring colleagues from across the Government to meet the challenge and to help us secure the vital tin smelter and solve the energy cost issue, which is probably the immediate need. I implore him to go beyond that for the home-grown supply chain, in an industry in which I know Britain can succeed and Cornwall can be at the forefront. I implore him to work across Government to get this to the top of our agenda and make a success of it for everyone in Cornwall and Britain.

16:49

[Anna Gelderd (South East Cornwall) (Lab)]

Meur ras, Mrs Barker; it is a pleasure to serve under your chairship. I thank my Cornish colleague, my hon. Friend the Member for Camborne and Redruth (Perran Moon), for securing this important debate.

As my hon. Friends from Cornwall know and speak about so powerfully, Cornwall has a proud mining heritage and was a key part of Britain’s first industrial revolution. We now have an opportunity to revitalise that in a way that serves our future aspirations. It is fantastic that this Labour Government have recognised that through the Kernow industrial growth fund. Local projects, such as the Cornwall Resources Redmoor tungsten and tin project, can bring crucially needed investment to areas like Callington in my constituency, as well as opportunities throughout South East Cornwall. We need to make sure that the benefits of those are felt by my local community; that means local skills, apprenticeships and good-quality jobs.

I strongly believe that our young people should not feel that they have to leave the place they are from to get on in life and succeed. Tin and the mining opportunities of Cornwall are a significant factor in how we build their future hopes and aspirations. As my hon. Friend the Member for Camborne and Redruth mentioned, demand for tin is increasingly driven by electronics, AI and clean energy. South East Cornwall can contribute its natural resources and hard-working and talented people to those growing industries. I welcome the Minister’s thoughts on how the critical minerals strategy connects with the Government’s wider industrial strategy and skills agenda. I am sure that he remembers fondly his previous visit to South East Cornwall. I put on record my thanks for his visit and extend another invitation for him to join me in future.

We need to develop these resources responsibly. I am so proud that South East Cornwall is playing a role in securing that. Cornwall contains some of our country’s most important landscapes and ecosystems, and draws millions of tourists each year. We care about it and value it hugely, so we must ensure that environmental protection and restoration are built into mineral extraction from the outset. Being part of that heritage, we know how to do it well—areas that were doing it previously are supportive and have the expertise. We can lead the way domestically and internationally, and show how things are done without relying on imports.

There is a real economic opportunity. The Government’s own critical minerals strategy recognised the gap in our tin supply chain: extracted tin is currently exported for refining before refined tin is imported again. Given that today’s tin price is almost £15,000 higher than at this point last year, the strategic importance of this specific mineral is growing. Can we use this opportunity to close that gap while creating processing and manufacturing jobs in the UK, alongside the already established mining jobs, as my colleagues have mentioned?

This industry is of national importance, and it is strategically crucial for the country. That must be recognised as we look at this in more detail. We need to be strategic about Britain’s natural resources. We should learn from our experience with oil and gas, and think carefully about how we capture long-term value from the resources we have. I previously made the case for thinking differently about natural wealth and our natural resources, including the value of our data, and I see similar principles to apply here. These are national assets, but they are also local assets, and we can create long-term wealth if they are strategically managed for the public good, and as long as we are working with the incredibly important businesses that are doing such vital work in this area.

Will the Minister set out how the Government will ensure that that value created by the private sector from public wealth in critical minerals is captured through things such as skills, innovation, domestic supply chains and future economic growth? These are opportunities that the people of Callington, in other areas of South East Cornwall and from across Cornwall will value highly. Cornwall can help to power the industries of tomorrow while ensuring that benefits to the community are felt today and in the future. The opportunities are significant. South East Cornwall is ready to play its part, once again, in this national push towards good economic growth, and we look forward to working with the Minister to do so.

16:53

[Mr Joshua Reynolds (Maidenhead) (LD)]

It is a pleasure to serve under your chairmanship, Mrs Barker. I congratulate the hon. Member for Camborne and Redruth (Perran Moon) on securing this debate.

Tin is one of those materials that most people never really think about, but our everyday lives depend on it because it is the material that physically holds all our devices together, with soldering being one of its most significant uses worldwide. It joins the components on our circuit boards. It is in almost every single device, from the smartphones that we all own to the computers and data centres powering the AI revolution. This debate is not about a niche commodity; it is about a key component of our everyday lives.

However, one of the problems is scale. Globally mined tin output this year will be about 294,000 tonnes, which is absolutely tiny compared with copper or aluminium. That scale is so small that the market is acutely sensitive to any disruption in any single place. The supply of tin, as we know, is extraordinarily concentrated. China is one of its largest single producers, accounting for about a third of the global tin supply, and Indonesia, Myanmar and the Democratic Republic of the Congo hold much of the rest. Several of the jurisdictions mining the majority of our tin are affected by international conflict, resource nationalism or simple geological decline, and the result, since 2025, has been the strongest price rally of any major industrial metal in the UK.

The Government already recognise that, which is why tin sits on the UK’s critical minerals list. However, just because it is on the list, we do not necessarily get anything from that recognition. Many other countries know exactly what critical minerals they have in the ground. Canada is specifically good at that, knowing its exact critical minerals map across the nation. The UK Government do not have a critical minerals map for the entire United Kingdom, so I ask the Minister if there is a plan for his Department to try to see what critical minerals we have in the ground.

We do know that tin is in the ground in Cornwall. It is not a new idea to extract tin from the ground there; it is one of the oldest industries on these islands. Cornish tin was being carted to the coast and shipped to the Mediterranean even before Rome ruled Britain. Under the Romans, extraction significantly increased. From the late Roman period to the late medieval period, Britain had a monopoly on the tin trade. Some 2,000 years later, we import almost all of our tin. Cornwall remained one of the most significant tin-producing regions for more than 400 years, and Cornish Metals is now doing work to try to re-establish that long history. Dewatering has reached about 350 metres in the tin mines we are looking to reopen, and the old pumping infrastructure has been found intact nearly three decades after it closed. We are glad to see flagship project status for that in the Government’s critical minerals strategy, and that the National Wealth Fund has invested £28 million in equity as part of its wider project.

If we manage to reach the production targeted for 2028, South Crofty could create 300 direct jobs and hundreds more indirect jobs in the Cornish economy, in an area that is economically disadvantaged compared with large parts of the country. That is incredibly important. It would not just be important for the UK, as it would be the only primary tin mine in Europe or North America —not one of the largest, but the only one. That is why it is so significant: the United Kingdom and Cornwall have the chance to have one of the only tin-production facilities on this side of the world. We must take that into account when we consider how the critical minerals strategy will move forward.

I have questions for the Minister on this topic. First, what practical steps are the Government taking to ensure that the mid-2028 target is met, particularly on permitting, skills and grid connection? Secondly, what assessment has been made of a strategic tin stockpile, particularly from the recovery of electronic waste, so that we reduce demand for imports rather than simply redirecting it? Thirdly, what is being done on due diligence, given that tin comes from some regions where trade is entangled with armed conflict? Fourthly, what is the Government’s plan for critical minerals partnerships with reliable partners around the world, in the European Union and in Commonwealth countries?

An alternative supply chain can exist, but the United Kingdom is not large enough to do it on our own. However, with a coalition of the willing and other partners around the world, we could bring that forward, and we need to work for that. Resilience cannot be ordered at short notice; it must be built, and that building needs to start now, with our friends and neighbours.

16:58

[Gareth Davies (Grantham and Bourne) (Con)]

It is a pleasure to see you in the Chair, Mrs Barker. Thank you very much for keeping us all in order.

Let me first congratulate the hon. Member for Camborne and Redruth (Perran Moon) on securing the debate. I am pleased that he clarified that it is not a debate on Tinder. To clarify, I did know that it was a debate about tin and not Tinder, but it is clear that he is a perfect match for this subject, because—I did not know this, actually—he is known as the Tin Man. Unlike in “The Wizard of Oz”, though, he does not need to search for a heart, because it is clear that he cares deeply about this subject and is a great advocate for tin and for his constituents. I very much enjoyed, and was partly educated by, his excellent speech. He will recognise elements of his speech in my own, because of the excellent points he made.

Unlike lithium, tin is rarely treated to big headlines and gigafactory photo opportunities. However, as we have been hearing, it quietly plays an indispensable role in our economy. Half the tin we consume goes to electrical solder, supporting our entire electronics industry, as the hon. Gentleman pointed out so eloquently. Demand is only increasing as solar panels, electric vehicles and AI data centres compete for the same limited global supply, and it is no surprise that prices have soared to nearly $50,000 per tonne as a result.

The hon. Member for Camborne and Redruth was right to highlight the new investment in the South Crofty mine as of May 2026, which will open it up for the first time in decades. That is excellent news for the country and, obviously, for his constituency. It would be remiss of me not to point out that the National Wealth Fund has existed for quite some time. It was created by my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak) as the UK Infrastructure Bank, and although it has been renamed under the new Labour Government, the organisation’s construct and purpose remain. I am very grateful for that, as I am sure the people of Cornwall are, because, as the hon. Member for Camborne and Redruth will be aware, back in 2023 the UK Infrastructure Bank invested in Cornish lithium.

This subject is not alien to the Conservative party, and we care deeply about it. The hon. Gentleman did not mention this, but he and the Minister will be aware that the last Conservative Government created the first critical minerals strategy, which recognised tin as one of 18 essential minerals. It is vital that we have a critical minerals strategy, and we welcome the investment that has been made, but we must ensure that we do not just celebrate one investment rather than talking about the overall issues and strategy. I look at the current Government’s critical minerals strategy, and I am afraid I take issue with the fact that it does not mention China even once, despite China’s near monopoly on the processing of critical minerals, as was highlighted by the Liberal Democrat spokesman, the hon. Member for Maidenhead (Mr Reynolds). That is not just an omission in the Government’s strategy; it is a hole in the middle of the plan roughly the size of the South Crofty mineshaft.

It will be no surprise to the Minister that I have a few questions for him. First, smelting tin is extremely energy intensive, and we know that the UK’s industrial energy prices are around 50% higher than those of our friends in France and Germany. How are the Government squaring their clear critical minerals ambitions with those very clearly rising energy costs?

Secondly, I recognise that he is not a Foreign Office Minister—as tempting as it is, I will not ask him to solve international conflicts from the Dispatch Box today —but global tin supply has decreased due to unrest in the Democratic Republic of the Congo and the restrictions in Myanmar’s Wa state, as was pointed out by the hon. Member for Camborne and Redruth. Will the Minister tell us what conversations he has had directly with his Foreign Office counterparts about the security of the supply routes for tin?

Lastly, how do the Government reconcile such enthusiasm for critical minerals, which the Minister will clearly demonstrate in a minute, with the national insurance rise and the Employment Rights Act 2025? Those measures will cost this very industry some £50 million exactly at the moment when foreign investors are voting with their feet and, unfortunately, taking money outside our country.

South Crofty will not produce its first tonne of tin until 2028 at the earliest. Between now and then, we must back British businesses in the critical minerals sector, and we must oppose the economic pressures that the Government are unrelentingly piling on the industry. I hope that the Minister can provide some of the answers to my questions, because right now, frankly, his strategy has all the substance of fool’s tin.

17:04

[The Parliamentary Under-Secretary of State for Business, Innovation, Science and Trade (Blair McDougall)]

It is a pleasure to serve under your chairship, Mrs Barker. It is also a pleasure to respond to my hon. Friend the Member for Camborne and Redruth (Perran Moon) and to congratulate him on securing this debate. It is a further pleasure to be taken back, at least momentarily, to my summer holiday in the constituency of my hon. Friend the Member for St Austell and Newquay (Noah Law). I will not say where I would rather be at this particular moment.

Scientists have said that the shortest scientifically measurable period of time is 247 zeptoseconds, but I can confirm that my own research has found an even shorter measurable time than that, which is the period between someone being appointed the Minister for critical minerals and all the Labour MPs from Cornwall contacting them to ask for meetings and conversations about the potential for critical minerals in that part of the world. Perhaps appropriately for a debate on mining, they are Stakhanovian in their work effort on this issue.

This debate on global tin availability is timely, as has been said. It is not always the mineral that attracts the big headlines, but to respond to the first request of my hon. Friend the Member for Camborne and Redruth, I confirm that the Government absolutely recognise that tin is central and fundamental to modern economic life. It is the solder that connects circuit boards, semiconductors, data infrastructure, automotive electrics and of course defence technologies. When global tin supply is tight, the impact can be felt far beyond mining markets, in manufacturing costs, supply chain resilience, investment decisions and, ultimately, the UK’s ability to deliver growth, energy security and national security.

My hon. Friend’s constituency is absolutely central to that discussion and to meeting those challenges. It is home to significant tin deposits, including the South Crofty tin mine, which has a high-grade tin resource and the potential to re-establish meaningful primary tin production in the UK. That matters not only for Cornwall’s proud mining heritage, which I was going to say goes back to the bronze age, but given that tin is one of the constituent parts of bronze, perhaps it predates the bronze age. Cornwall is the tin isles mentioned by Herodotus. As has been said, however, the future of tin mining is of much more immediate importance, and a source of excitement. The question before us is not simply whether we can mine more tin again, but how a secure, responsible and diverse tin supply can support jobs, industrial competitiveness, clean energy deployment and economic resilience.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Member for Camborne and Redruth (Perran Moon) for securing this debate. I am sponsoring an event next door at which I had to speak, so I could not be in the Chamber, although I intended to be here. I spoke to you earlier, Mrs Barker, for permission to ask a question instead.

The hon. Gentleman is a fantastic spokesman for Cornwall. He is present whenever we debate a subject that has to do with Cornwall, and I congratulate him on that. This issue is of particular significance for us in Northern Ireland, and we want to add our support for what the hon. Gentleman is doing, because we have no major domestic source of tin and rely on imported supplies, making businesses vulnerable to international supply chain disruption. Businesses in Northern Ireland also face additional complex regulatory requirements to ensure that tin is not linked to conflict or illegal mining.

We in Northern Ireland want to add our support to Cornish Metals’ plans to establish production at the South Crofty mine in Cornwall, which could support the securing of a supply for the west and ensure that Northern Ireland has accessible tin at an affordable price, with no EU interference in the trade. I again commend the hon. Member for Camborne and Redruth and I look to the Minister to support him. We certainly support him in Northern Ireland.

[Blair McDougall]

I thank the hon. Gentleman for his offer of support for the effort. One of Northern Ireland’s key economic strengths is advanced manufacturing, and the importance of tin runs through that sector from top to bottom. Tin underpins so much: advanced manufacturing, automotive production, aerospace, clean energy technologies, data centres, telecommunications and defence, all of which are important for Northern Ireland and the UK at large. If tin is scarce, volatile or increasingly concentrated in a few countries, as hon. Members have mentioned, those pressures can affect investment confidence, productivity and our competitiveness in the sectors within the industrial strategy.

It is not enough, as my hon. Friends the Members for St Austell and Newquay and for South East Cornwall (Anna Gelderd) have said, simply to leave this matter to the market. We have a responsibility to make sure that local people benefit from it. As my hon. Friend the Member for South East Cornwall also said, it is essential to our ability to deliver on the industrial strategy as a whole. Critical minerals in themselves are an essential part of the UK economy, but they also underpin everything else that we are trying to achieve. That is why the critical minerals strategy is focused on resilience, improving our understanding of demand, supporting domestic capability where it is viable and environmentally responsible, increasing recycling and working with international partners so that UK businesses are not dependent on fragile or overly concentrated sources of supply.

We cannot onshore every part of the supply chain, but where we have those resources—as we clearly do in Cornwall—capable companies, the environmental protections and community support here in the UK, we can make a contribution to that resilience. That is why, for example, we supported the South Crofty tin project through £20 million of equity investment and last week announced a £71 million investment into Tungsten West. As hon. Members have said, exploration and mining are great, but we also want to see more processing, refining and recycling in the UK. That is why we put the £25 million critical minerals accelerator in place: to help viable projects to get over that hump and get into the market. It is why we are introducing BICS to make the energy costs for potential refining projects more affordable and dealing with things like grid connections.

The Liberal Democrat spokesman, the hon. Member for Maidenhead (Mr Reynolds), asked about intelligence. We have instituted the growth minerals list to get a sense of our demand and introduced the demand aggregator to get a sense of that with allies. The Critical Minerals Intelligence Centre published a prospectivity report, which sets out exactly what he asked about in terms of the potential resources, and we work with the British Geological Survey on that basis. As I said, we are working with international partners to make sure that we have reliable prices, diverse sources and material produced to the high standards that the modern economy requires.

In conclusion, tin has a major economic footprint. It connects the technologies that power our homes, vehicles, factories and communications. The global availability of tin therefore matters to prices, productivity, resilience and good growth. The Government’s approach is clear: support responsible domestic production where we can, recover more value through recycling, build better data on demand, mobilise finance and work with international partners to diversify supply. By doing so, we can reduce vulnerability, support British industry, create skilled jobs and ensure that the UK economy has access to the critical minerals that it needs for the future. I look forward to working with hon. Friends to that end—and, as I am the only person who has not mentioned Tinder, let me finish by saying that I will always swipe right for my hon. Friend the Member for Camborne and Redruth.

17:14

[Perran Moon]

I thank everybody who has contributed to this debate. Perhaps next time I should actually advertise it as a Tinder debate, and we can educate people while they are here.

I will thank a few people specifically. My hon. Friend the Member for St Austell and Newquay (Noah Law) is very knowledgeable, particularly in the areas of midstream and downstream work; he talked about processing supply chains. Both he and my hon. Friend the Member for South East Cornwall (Anna Gelderd) mentioned the Kernow industrial growth fund. Right now, that fund is being used for exactly what it was designed to do—to support some exploratory mining opportunities, among other commercial opportunities in Cornwall. He also mentioned unblocking planning and permitting issues, which we need to take on board.

My hon. Friend the Member for South East Cornwall is a superb champion for Cornwall Resources, which is doing amazing things to maximise the opportunity in tungsten. She talked insightfully about the local benefits, including in relation to the skills agenda. We really need to tie that agenda in with our devolution deal, which I know the Prime Minister has mentioned several times in the last 48 hours. For us in Cornwall, the skills agenda will be critical—excuse the pun—to maximise the opportunities in this particular sector.

I totally agree with the Liberal Democrat spokesman, the hon. Member for Maidenhead (Mr Reynolds), about the exploration that is urgently needed on these critical minerals. I heard what the Minister said, but we are not just talking about tin, tungsten and lithium, the three we know about at the moment; we know from previous records that we also have nickel, cobalt, uranium, silver and many others, but we need the data that exploration can provide and we need support in that regard.

The Opposition spokesperson, the hon. Member for Grantham and Bourne (Gareth Davies), clearly grasps the importance of Cornish tin mining. He also mentioned energy costs; perhaps that is a debate for another day but, because of our Cornubian batholith, which is the granite formation on which Cornwall sits, we have vast geothermal opportunities. We are looking at whether there is a commercial case to make use locally of that geothermal energy to drive some of our industrial regeneration.

I have already mentioned the importance of aligning this issue to the devolution deal. Really, this debate was more of a clarion call to Government to focus very closely, not only on lithium and tungsten, but on a huge opportunity within the tin sector across the whole of Cornwall.

Finally, I warmly extend an invitation to the Minister to visit the South Crofty tin mine.

Question put and agreed to.

Resolved,

That this House has considered the impact of levels of global tin availability on the economy.

17:17

Sitting adjourned.