House of Commons
Oral Answers to Questions
(1 day, 8 hours ago)
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Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
The Secretary of State for Scotland (Mr Douglas Alexander)
The UK Government are committed to deepening devolution across Scotland, working in partnership with the Scottish Government to push power out from Holyrood and into the hands of local communities. The Prime Minister has made an open and genuine offer to the Scottish Government, to work together collaboratively to design a new model of regional economic empowerment that is right for Scotland.
Graham Leadbitter
The Prime Minister was unequivocal last month when he told the House that “exactly the same situation” for a referendum applies in Scotland as in Northern Ireland. The legal mechanism for a referendum on Irish unification is detailed in the Northern Ireland Act 1988, but there is no equity across these islands for an equivalent law for Scotland. When will the Secretary of State deliver on the Prime Minister’s words, and bring forward legislation to amend the Scotland Act 1988 and enshrine the people of Scotland’s equal right to choose their own future?
Mr Alexander
The Prime Minister on these Benches was making a very basic and clear comparison, which is that there is no consensus in favour of a border poll in Northern Ireland, and there is certainly no consensus in favour of a referendum in Scotland.
Patricia Ferguson (Glasgow West) (Lab)
It is estimated that decisions by the Scottish Government cost my city of Glasgow some £347 million last year. Does the Secretary of State agree that devolution should not just stop at Holyrood but should be pushed down to local government, cities and towns across Scotland, that it should be accompanied by money from the record settlement given by this Government to the Scottish Government, and that until that happens devolution in Scotland will not be complete?
Mr Alexander
I know how closely my hon. Friend worked with the late great Donald Dewar, Scotland’s first First Minister. He always anticipated that power would not stop at Holyrood’s door but would be pushed out to communities, yet we have ended up with the quite bizarre situation where Scotland is the most devolved nation in the United Kingdom, but still one of the most centralised nations in Europe. We believe that should change.
Harriet Cross (Gordon and Buchan) (Con)
Almost two weeks ago, the Prime Minister gave a speech about devolution in Scotland. Since then, the Government have not clarified anything. Is the Prime Minister suggesting more powers to Scotland, or does he think that just by asking nicely the SNP will stop hoarding so many powers at Holyrood? Holyrood is already one of the world’s most devolved Parliaments; the issue is not the powers but the party in power there that has created Europe’s most centralised Government. Will the Secretary of State confirm that this Labour Government will not devolve any further powers to the Scottish Parliament?
Mr Alexander
There is a certain irony in being told how devolution operates by a Conservative party that was deeply resistant to devolution when we established it; and I voted for the Scotland Act 1998. In reality, if people take the trouble to read the Prime Minister’s speech, and it bears reading, he was very clear that deeper devolution in the context of Scotland does not simply involve the transfer of power from one Parliament to another, but instead involves the decentralised agenda that is being driven right across the United Kingdom.
Bradley Thomas (Bromsgrove) (Con)
Joe Robertson (Isle of Wight East) (Con)
Aphra Brandreth (Chester South and Eddisbury) (Con)
Jerome Mayhew (Broadland and Fakenham) (Con)
The Secretary of State for Scotland (Mr Douglas Alexander)
As shown by our decision last week to approve the Jackdaw gasfield, the United Kingdom Government are committed to a pragmatic approach to the North sea. We recognise that domestic oil and gas will continue to play an important part in our energy mix for decades to come.
Bradley Thomas
In 2024 the Scottish oil and gas industry supported 118,000 direct and indirect jobs, and after much dither and delay, thankfully the Government have approved Jackdaw, which will safeguard jobs that otherwise would have been lost, and create more. The Government need to do more to support Scottish oil and gas, so what steps is the Secretary of State taking?
Mr Alexander
Conservative Members are experts in dither and delay, and over the decade preceding July 2024 and the election of the Labour Government, alas 70,000 jobs were lost. Of course, we hit peak production in the North sea more than 20 years ago. That is why we need a credible plan for transition, and that is what we are putting in place.
Aphra Brandreth
The Government are accelerating the decline of an industry that supports thousands of jobs across Scotland, while promising replacement jobs that are not materialising quickly enough. Scotland’s oil and gas workers are paying the price for the Government’s ideological opposition to the oil and gas sector. Will the Secretary of State confirm now whether he supports Labour’s ban on new licences?
Mr Alexander
There is a certain irony in the Conservative party lecturing the Government on deindustrialisation in Scotland. In reality, it left an energy system in 2024 that was less secure, more exposed to international shocks, and slower to invest. The hon. Lady’s question might have more credibility had we not agreed Jackdaw just last week.
Jerome Mayhew
The Government spent two and a half years virtue signalling about the North sea. They said there was no future for oil and gas and had a ban on licences, as well as increasing taxation. The result has been 25,000 job losses—1,000 every month and counting—not because of an external shock, but because of a crisis 100% caused by Government policy. When will this Government leave their student politics behind, back British business and get us drilling again?
Mr Alexander
The Conservative party’s policy towards the North sea was a study in incompetence. The reason we took the decision on Jackdaw last week was that the Conservative Government so messed up the process that we ended up in court.
Chris Kane (Stirling and Strathallan) (Lab)
For many of my constituents in rural Stirling and Strathallan, energy security also means being able to afford the heating oil they rely on to live and to run businesses from home. What discussions has the Secretary of State had with Cabinet colleagues about ensuring that support for jobs in the oil and gas sector is mindful of the need to deliver the affordable and secure energy that many rural homes and jobs rely on?
Mr Alexander
The point that my hon. Friend makes is well taken. The supply chain supporting oil and gas, and the energy sector more generally, is not limited to the north-east but stretches right across Scotland, including in his Stirling constituency. I hope that he will listen with interest to the words of the Chancellor in just a few minutes’ time.
Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)
It is fair to say that there was a muted response from the First Minister at the good news from the UK Government on Jackdaw. Will the Secretary of State help to inspire and animate Mr Swinney by telling him more about the new energy wealth fund and how it will support jobs in Scotland?
Mr Alexander
The SNP-led Government in Edinburgh are not short of opinions on anything, apart from their view on the Jackdaw decision that we reached last week. The First Minister opposed the decision in recent months and the former First Minister Nicola Sturgeon said that she wanted the “fastest possible just transition” away from oil and gas in the North sea—the SNP seems to have more positions than she has coffee machines.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I commend the Secretary of State for Energy Security and Net Zero for the decision to approve Jackdaw. It takes courage to lead, and the same logic applies to Rosebank. Does the Secretary of State agree that the £2 billion fund set up to transfer jobs from oil, gas and carbon into renewables sends a signal to workers that we are with them in the North sea, today and for years to come?
Mr Alexander
My hon. Friend speaks with great authority because a number of North sea workers are based in the Western Isles. For many years, people have argued for the establishment of an energy wealth fund. Alas, we did not get much gratitude from the party in power in Edinburgh that failed to deliver a publicly owned energy company, and we have now delivered this energy wealth fund.
Harriet Cross (Gordon and Buchan) (Con)
Last week, the Government finally approved Jackdaw. The Secretary of State called that
“a win for Aberdeen, a win for Scottish workers and a win for Britain’s energy security.”
But there can be many more wins: Rosebank and other fields can also protect jobs and supply chains, secure investment and tax returns, and boost our energy security. Based on his own logic from last week, will he confirm that he fully supports approving Rosebank and ending Labour’s ban on new licensing?
Mr Alexander
The shadow Ministers are like the Bourbons: they have forgotten nothing and learned nothing. The reason we took the decision about Jackdaw last week and the reason that I am appropriately cautious in relation to Rosebank, is that there is a process that needs to be followed, following the evidence and reaching a determination. Alas, that was not a process that the Conservatives chose to follow.
Harriet Cross
Oil and gas workers are fed up with the Government skirting around this. Some 25,000 linked oil and gas jobs have been lost since the general election. The Government know that new fields support jobs—they said that last week—and they know that UK production supports UK businesses. Last month, they signed off on new oil in the Falklands, but are too squeamish to do it in UK waters. The Secretary of State knows more is needed. When are the Government going to wake up to the damage they are doing to our crucial oil and gas industry?
Mr Alexander
I get the impression that that question was drafted before the Jackdaw decision was issued just last week.
Euan Stainbank (Falkirk) (Lab)
The Parliamentary Under-Secretary of State for Scotland (Melanie Ward)
This Government are taking action to give families breathing space. We are driving the long-term changes needed to create good jobs and growth in every postcode. The Prime Minister has been clear that pushing economic power out of Holyrood and into the regions of Scotland is key to reindustrialisation. The UK Government stand ready to work with the Scottish Government to do this. At the same time, we are empowering regions through action like the local growth fund, which will benefit my hon. Friend’s area.
Euan Stainbank
I welcome my hon. Friend to her place on the Front Bench. To deliver good growth in my area, the reindustrialisation of the Grangemouth industrial cluster is essential. We must take steps to include Grangemouth in the strategic sites accelerator, unlock a final investment decision in the Acorn project and take concerted action to secure and reutilise the Syngenta site when the company withdraws next December. What action is my hon. Friend taking, alongside departmental colleagues, to enable the reindustrialisation of Grangemouth?
Melanie Ward
The Prime Minister wants to see reindustrialisation, and we are committed to driving growth in Grangemouth and the wider region. We have acted swiftly at every stage as the Grangemouth site transitions, including through a £120 million commitment to safeguard the chemicals plant. I know that the Minister for Reindustrialisation and Cabinet Secretary Flynn are focusing especially on the preparation of ground conditions and the remediation of potential sites for new projects, which is key to unlocking the £200 million from the national wealth fund. I know that my hon. Friend will continue to push for his constituents.
Wendy Chamberlain (North East Fife) (LD)
Scottish Government figures released yesterday show the lowest level of new house building in more than a decade. Ahead of the Budget, councils in England are expected to benefit from new investment to stimulate council house building and access low-interest borrowing. Will the Minister engage with her Scottish Government counterparts to encourage similar support in Scotland to help local councils to build more homes and, in turn, support local economic growth through construction?
Melanie Ward
The hon. Lady makes an excellent point about this Government’s record on building new homes in England. My officials regularly engage with the Scottish Government on a range of matters to exchange learning. As she knows, housing and planning are devolved matters, so house building responsibility rests with the Scottish Government. Of particular concern are the increasing numbers of children living in temporary accommodation in Scotland and the increasing numbers of people sleeping rough. While our Prime Minister is determined to end rough sleeping, in Scotland it is on the rise, and that is not good enough.
John Grady (Glasgow East) (Lab)
The Parliamentary Under-Secretary of State for Scotland (Melanie Ward)
The clean energy transition is a generational economic opportunity to reindustrialise Scotland, from the islands to the borders. Scotland is already a clean energy powerhouse, with the industry supporting 105,000 jobs and adding £10 billion to the Scottish economy. Last week, the Chancellor announced a new £2 billion energy wealth fund to further support the UK’s transition to low-carbon power. Berwick Bank is on course to be one of the largest windfarms in the world and is off the coast of Scotland.
John Grady
Large clean energy projects and transmission project lines need planning consent from the Scottish Government. Delays mean that Scottish electricity consumers pay more. In a recent report, CBI Scotland says:
“Planning is the concern business leaders across Scotland raise with us most consistently, and the frustrations they describe are…too much inconsistency, not enough speed”
and a growing sense that planning has become a barrier to investment and growth—a responsibility of the Scottish Government. Does the Minister agree that the Scottish Government need to get a grip on the planning system?
Melanie Ward
My hon. Friend is absolutely right. That is why we have worked with the Scottish Government to make approving energy infrastructure in Scotland simpler. Those reforms are intended to help Scotland to realise our clean power ambitions while providing investors with greater confidence, yet we continue to hear from industry that the Scottish planning system is holding back growth. Planning is also the mechanism that the SNP uses to block new nuclear energy projects in Scotland, costing us up to 5,000 skilled jobs in the last decade alone.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Minister saw for herself this summer the opportunities being developed around marine renewables in my constituency at the European Marine Energy Centre in Orkney. Next month we will hopefully get the report from the taskforce commissioned by other Government Departments. Will the Minister engage with that and ensure that we get marine energy across the line and, as a consequence, win a home-grown supply chain in Scotland for her reindustrialisation policies?
Melanie Ward
I greatly enjoyed my visit to the right hon. Gentleman’s beautiful constituency. He is right about the opportunities that we have for clean power in Scotland, which our Government are already taking advantage of. I saw for myself what is happening in Orkney with tidal, wave and wind power, and I will pay significant attention to the report that he mentions.
Susan Murray (Mid Dunbartonshire) (LD)
The SNP’s anti-nuclear position has already cost Scotland 5,000 jobs, as the Minister told Westminster Hall this month and has confirmed again this morning. What steps are the Government taking to bring the Scottish Government, industry and trade unions together so that new nuclear in Scotland finally gets the serious hearing that it deserves?
Melanie Ward
The hon. Lady is absolutely right about the opportunities for new nuclear energy in Scotland, and the SNP Scottish Government have to tell the Scottish people why they are standing in the way of them. The National Economic Council is meeting in Scotland this Friday, at which the Prime Minister and the First Minister will have a chance to discuss such matters. I hope the First Minister will take those opportunities.
Dave Doogan (Angus and Perthshire Glens) (SNP)
There is real fear in Scotland this morning that the Labour party is about to embark on another big betrayal of Scotland’s energy. After abandoning Grangemouth and costing thousands of energy jobs in Scotland, the UK Government now seem set on withdrawing funding for Scotland’s carbon capture industry. Will the Minister take this opportunity to quash that rumour?
Melanie Ward
The hon. Gentleman is doing what he does best, which is to fire up the grievance machine rather than look at all the enormous opportunities that could be coming to Scotland. Perhaps he could tell us what his own party’s policy is on Jackdaw and on energy. When will we see an energy strategy for Scotland? It has been more than five years, and we are still waiting.
Dave Doogan
I note that the Minister has failed to quash the rumours about Acorn, so let me try another imminent Labour party betrayal of Scotland’s energy. At a time when bills are set to be £1,000 higher than the Labour party promised, the Chancellor is inexplicably going to increase the unit price of gas. We know that families in Scotland will be disproportionately hit by the Labour party gas price increase. The Minister says that she and her colleague the Secretary of State are Scotland’s people in the Cabinet. What is she going to do to protect people from the Chancellor’s gas price rise?
Melanie Ward
Once again, a typical display from the hon. Gentleman—firing up the accusations of betrayal before he has even heard the Budget. I understand that he called for standing charges to be removed from gas bills some time ago, so I look forward to hearing him welcome some of the measures in the forthcoming Budget.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
The Secretary of State for Scotland (Mr Douglas Alexander)
Scotland remains at the very heart of the UK’s energy system. Just last week, I was at St Fergus alongside the Energy Secretary to approve the Jackdaw gasfield, paving the way for domestic gas to flow ashore in the coming weeks. Over the course of 2025, nearly two thirds of Britain’s electricity came from clean sources, creating skilled jobs across Scotland, meeting our climate obligations and strengthening our energy independence.
Lillian Jones
Having met apprentices and engineers at Hunterston, including many from my own constituency of Kilmarnock and Loudoun, I have seen at first hand the world-class nuclear talent that we have in Scotland. Does the Secretary of State agree that the SNP’s continued opposition to nuclear energy not only weakens our energy security but risks driving our skilled young Scots to seek opportunities south of the border, when Scotland should be creating those opportunities to keep them, their futures and their careers in Scotland?
Mr Alexander
I can answer with real feeling, having visited the Torness nuclear power plant in my own constituency last week and met a group of young apprentices. Those are brilliantly skilled jobs and talented young people, yet because of the policy of the Scottish National party in Edinburgh, we are forgoing millions of pounds of investment, energy security, and good, well-paid, unionised jobs for decades to come.
Douglas Lumsden (Aberdeen South) (Con)
The Labour Government’s answer to energy independence was to create GB Energy, which we were told was going to create 1,000 jobs in Aberdeen. Two years in, it has just 132 employees, and only 86 of them are based in Scotland. The chairman and the chief exec are not based in Aberdeen—the people of Aberdeen were sold a lemon with GB Energy. Does the Secretary of State now accept that the best way to boost employment in Aberdeen is to get Britain drilling again?
Mr Alexander
I understand that Conservative Members speak with some authority, given that the Conservatives grew the size of the civil service after Brexit. For us, the measure of the effectiveness of GB Energy was never the number of officials working in the headquarters in Aberdeen; it was how many jobs are created in the north-east, across Scotland, and across the whole of the United Kingdom. We are proud of having a publicly owned energy company that is getting down to work, and proud of the fact that consent has been granted for Jackdaw. I think the Conservatives could do better.
Blake Stephenson (Mid Bedfordshire) (Con)
The Parliamentary Under-Secretary of State for Scotland (Melanie Ward)
The Prime Minister has been clear about our shared ambition with business to drive investment, create jobs and grow the economy. We are cutting red tape and striking new trade deals around the world to drive up exports, and boosting the role of Scottish small and medium-sized enterprises in sectors such as defence and energy. Our industrial strategy sets out a 10-year road map for the UK economy, backing Scotland’s strengths and providing business with the certainty it needs.
Blake Stephenson
Scotland’s fishing industry makes a vital contribution to coastal communities in every part of Scotland. Last year, Labour negotiated away 12 years of access to our seas to the EU in a disastrous deal for the UK. Can the Minister guarantee that our fisheries will not suffer in any way from the sanitary and phytosanitary deal with the EU or lose any of our remaining freedoms outside the common fisheries policy?
Melanie Ward
I was glad to meet representatives from the fishing sector across Scotland recently, and this matter will be on the agenda for the EU summit taking place at the end of next month. The Prime Minister has also rightly said that it is time for us to have an honest conversation with the country about our broader relationship with Europe. That stands to benefit Scotland in many ways, and I wish the hon. Member’s party would get behind that. Moreover, it is an interesting day to hear about measures that would benefit the economy from the Conservatives, given that Liz Truss has been talking about her mini-Budget, saying that she was right. Let us remember that the shadow Chancellor, the hon. Member for Arundel and South Downs (Andrew Griffith), was one of the architects of that Budget, which torched our economy.
Douglas McAllister (West Dunbartonshire) (Lab)
Does the Minister agree that a good example of a Government policy that will have a positive impact on businesses in Scotland is our youth guarantee, which is providing Scotland’s businesses with skilled-up young people ready for work? That includes our new youth hub in West Dunbartonshire, which is set to open this Friday.
Melanie Ward
My hon. Friend is a tireless advocate for the people of West Dunbartonshire, and I am delighted that it will benefit from a new youth hub opening this week. This Government’s investment in a generation of young people includes the expansion of youth hubs across the UK. There are now 12 youth hubs open in Scotland, with a further 27 planned across our nation. Each will provide a range of services to our brilliant young people, helping them to earn, learn and live the fullest possible lives.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
The Parliamentary Under-Secretary of State for Scotland (Melanie Ward)
This Government are committed to supporting a competitive and sustainable steel sector across the United Kingdom, with Scotland a vital part of that. The UK’s first-ever steel strategy, published in March, sets out an ambitious long-term plan to rebuild the sector, return domestic market share to around 50%, attract new investment and position the UK as a world leader in clean, modern steel production. The significance of Scotland’s steel industry to local communities, jobs and supply chains is beyond doubt.
Pamela Nash
I congratulate the Minister on a great performance at her first Scottish questions. She will know that yet again Dalzell’s staff in Motherwell were not paid on time this month by Liberty, despite pulling out all the stops to get the plant rolling steel again. It is simply intolerable for the team to live in this situation. They have been forced to find job security elsewhere, leaving a vital and unique piece of UK infrastructure in a potentially unsalvageable position. Will the Scotland Office work with me and colleagues to ensure that our Government take action imminently to ensure that the workforce are not left in this position again next month and to secure the future of the Dalzell plate mill permanently?
Melanie Ward
My hon. Friend is a powerful advocate for those she represents, and I know she discussed the situation at Dalzell works with the Prime Minister when he was in Motherwell recently. Liberty’s failure to pay its workforce on time is a huge worry to her community. It is intolerable, as she says, and we share that concern. The UK Government want to see the Dalzell site operational once more, and we are looking at the situation closely. We will continue to work with her.
Graham Stuart (Beverley and Holderness) (Con)
The present Foreign Secretary’s ridiculous policy on oil and gas has now been overturned, so will the Minister, in a similar vein, ensure that the right hon. Gentleman’s equally absurd refusal to allow localised electricity pricing can also be overturned, so that businesses, such as those in steel in Scotland, can enjoy the competitive energy prices that the considerable generation in that country deserves?
Melanie Ward
It is astonishing to get lectures on energy policy from the Conservatives. The reason that the Jackdaw decision took longer than it otherwise might have taken was that they messed it up. The right hon. Gentleman’s party would do well to remember that clean, green, home-grown power is the only way to bring down bills in the long run, and that is what our Government are focused on doing.
Mr Speaker
Before we come to Prime Minister’s questions, let me welcome, in the Gallery, Nancy Pelosi, Speaker Emerita of the United States House of Representatives. May I also remind the House that this is the last attendance at the Table of Tom Goldsmith as Clerk of the House? Tom, we wish you well.
Mr Luke Charters (York Outer) (Lab)
The Prime Minister (Andy Burnham)
Our thoughts are with everybody in Spain who has been affected by the devastating train crash this morning. I have been in touch with Prime Minister Sánchez to relay our condolences and to offer any support that we can give. May I also send condolences to the families who lost loved ones during the storms over the weekend, and thank our emergency services and everyone who has worked so hard to support those affected?
Let me, in his final week, pay tribute to the Clerk of the House for his 30 years’ service to this place. Tom’s wisdom, professionalism and abilities at the piano are all hugely admired, and I know that the whole House will wish him well for the future.
Finally, I am sure that the whole House—including, I am sure, those on the Scottish National party Benches—will join me in congratulating Harry Kane. From Leyton Orient, on loan, to the Ballon d’Or—what a journey! Many congratulations, Harry. We are all so proud of you.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
Mr Charters
Last week I saw sewage pouring into the river Ouse, all while doing a BBC interview on pollution! I have worked out that during the average length of a Budget statement, the equivalent of four Olympic swimming pools’ worth of water will have leaked across the network. If only Yorkshire Water guarded its assets as closely as the Yorkshire Chancellor guards the HP sauce in his Red Box. Does the Prime Minister agree that it is time for stronger public control of our region’s water?
The Prime Minister
My hon. Friend is right. The water industry is a symbol of what has gone wrong. The private interest has been allowed to dominate the public interest, which is why we will introduce a strengthened water Bill that will lift the bar on public ownership, alongside other reforms over the next decade. The vast majority of the public support this. They do not want to see sewage in our rivers and seas—unlike, I believe, the Leader of the Opposition, who told her conference recently, “Water privatisation has been a success.” She cannot really believe that, can she?
Mrs Kemi Badenoch (North West Essex) (Con)
May I also give my thanks to the Clerk of the House and convey to him, on behalf of those on my side of the House, our very, very best wishes for the future?
There has been a bit of confusion this week, and I hope that the Prime Minister can clear it up. Does he or does he not want a referendum on rejoining the European Union?
The Prime Minister
There is no confusion at all. The Government have a collectively agreed position, which I have set out today. It is entirely consistent with everything I have said, including what I said at the time of the by-election.
The red lines in our manifesto, including those on freedom of movement, will stay firmly in place for the whole of this Parliament, but what I will not do is defend the deal negotiated by the right hon. Lady and the Government she was in, which, in my view, gave us a harder Brexit than was promised at the referendum, and has been bad for growth and bad for control of immigration.
Mrs Badenoch
It sounds as if the Prime Minister does not know whether he wants another EU referendum. I certainly do not. It is the Chancellor’s big week, and the Prime Minister popped up on telly and opened his mouth without engaging his brain, not for the first time. Can he explain why he decided, during Budget week, to reopen a debate on freedom of movement?
The Prime Minister
It may have escaped the right hon. Lady’s notice that we are three weeks away from a UK-EU summit. It is an opportunity to improve the poor deal that the Conservatives negotiated and to get a better deal in place for Britain—a deal that backs British farmers and British food producers, and that removes red tape from our businesses. If we get the right deal, it will protect our car industry, protect our steel industry and allow better co-ordination on migration. The Tories used to stand for these things. If they still do, will she back Britain’s negotiating position as we go into that summit?
Mrs Badenoch
The Prime Minister keeps talking about our deal, but he is using our deal. He is using our Brexit freedoms to take VAT off energy bills. He used those Brexit freedoms just yesterday to scrap import taxes on hundreds of goods. What he should be saying is thank you.
I asked the Prime Minister about freedom of movement. I do not think he has been talking to his Cabinet colleagues, because I will tell him who does not want a debate about freedom of movement: the Home Secretary—she has been very clear on that. The Business Secretary does not want it either. The Culture Secretary and I do not agree on much, but even she does not want the Prime Minister to restart this debate. What about his Back Benchers? Let’s have a show of hands—who wants free movement? I know the Prime Minister does not want to look behind him, but nobody raised their hand.
There was someone else who did not want to reopen free movement: an ambitious candidate fighting a by-election earlier this year. He said
“the last thing we should do right now is rerun those arguments.”
Does the Prime Minister still agree with himself?
The Prime Minister
I do, because I am not. I am trying to get a better deal for Britain at the summit that we are about to go to. The right hon. Lady has mentioned things said in the past. Can I remind her of what she said? [Interruption.] Well, I am going to—I am sorry. She said it was a mistake for the Conservative party to
“leave the European Union before we had a plan for growth outside the EU.”
She has just nodded. She may as well have said it was a mistake to leave the EU without a plan in place to control migration, because that is what led to the Boriswave under the Government she was in, when migration into this country changed and went away from revolving-door migration and towards long-term settlement. It is why my right hon. Friend the Home Secretary is having to reform indefinite leave to remain. She has my support in making those changes, but let us have a little humility from those on the Conservative Benches, who left Britain with low growth and migration out of control.
Mrs Badenoch
It sounds like the Prime Minister does not know if he agrees with himself or not. He wants to remind me about my words. I stand by my words. Where we make mistakes, we own up to them. Labour pretends that it never does anything wrong. [Interruption.] Yes, yes, yes. Indeed, that is the difference between him and me. He wants to remind me about what I said; I think it is worth reminding him what he said just this May about the Brexit referendum:
“It’s going to undermine everything I’ve said about strengthening democracy if we don’t respect that vote.”
But he does not respect that vote, does he?
The Prime Minister
I think I have answered that very clearly by saying that the red lines in the manifesto are firmly in place. The right hon. Lady stood there a moment ago and said that she admits mistakes. She was asked twice by BBC London during her conference whether Brexit, and the deal she negotiated with her colleagues, was good or bad for London, and twice she could not bring herself to answer that question. Perhaps, before she finishes today, she will answer it now.
Mrs Badenoch
I have said many times that, yes, it was, and the Prime Minister is using those freedoms today. He is using those very freedoms, but he does not want to admit that. He is the Prime Minister, not me. He wants to ask me questions. I am very happy to swap places with him, if that is what he wants.
I am not talking about something that he might have said 10 years ago, although I can read out those quotes if he wants. I am talking about something that he said just a few months ago. The Prime Minister was not here for the 2017 Parliament, but many of us were. We do not want to go through that again. The country was paralysed—it was miserable, regardless of which side of the debate you were on. [Interruption.] It was, because Labour Members would not respect the result, and they are doing it again. Does the Prime Minister really think the country wants to reopen that debate?
The Prime Minister
Yes, yes—now the right hon. Lady is speaking the truth. The country was paralysed by the Conservative party: low growth, insufficient control on migration. That is what this Government is dealing with, and my right hon. Friend the Chancellor will stand up and show that we have a plan to get that growth going across the country.
Where I am focused is getting a better deal for Britain. That is my responsibility, and I will lead from this Dispatch Box over the next few weeks. I will do everything I can to get a better deal for Britain—a better deal for farmers and food producers, less red tape on our exporters, more support for our steel and our car industries, more control of migration. I will stand here and defend doing that, as well as being true to our manifesto. That is the difference between this side and that side of the House: we stand up for the British interest. Where is the Tory party of old that used to stand up for those things? The reason she could not answer in this House today on whether or not she was backing the position that I have set out is that she is too worried about the threat to her right to stand up for Britain. [Hon. Members: “Hear, hear!”]
Mr Speaker
Order. Just to remind everyone, it is Prime Minister’s question, so I would not worry about the answers. I call Kemi Badenoch.
Mrs Badenoch
I cannot believe that the Prime Minister actually said at that Dispatch Box that he wants to reopen the Brexit debate. He is in a different place from where he was in Question 1. Let me tell the Prime Minister: the country does not want to rerun this debate; neither, as it happens, do his Back Benchers. This country voted to leave the EU, and we should respect that decision. The Conservative party always has done.
Our economy is facing serious challenges. The Prime Minister needs to get borrowing down, because of their stupid decisions. [Interruption.] One of them asks, “Why?” It is because of their stupid decisions. They need to get borrowing down. He needs to get welfare down. He needs to get people’s taxes down. All of this can be done without reopening a debate on the EU, so instead of leaving it to his team again, I will give him one last chance to clear up the mess he has made: will he rule out, after his extraordinary comments, any referendum on the EU or the single market?
The Prime Minister
I have repeatedly set out the red lines of the manifesto, and can I just say this one final time? I am doing what I can to get a better deal for Britain, and getting a better deal for Britain, I can tell the right hon. Lady, is part of this job. I am standing up for British business. Can I tell her who supports what we are doing? The CBI, the Federation of Small Businesses, the British Retail Consortium, Asda, Morrisons, Marks & Spencer, Salmon Scotland—they all support what we are trying to do. Why does she not join us, with other colleagues across this House, and send a strong message that Britain is calling for a better Brexit deal, so that we can get growth going again, as my right hon. Friend will shortly show to this whole House?
Steve Race (Exeter) (Lab)
The Prime Minister
I do agree with my hon. Friend. I do not think we should accept in this country that anybody should spend even one night sleeping rough on the streets. I said when I walked up Downing Street coming into office that I wanted to change that and wanted to bring an end to rough sleeping. I am grateful to my right hon. Friend the Chancellor for committing funding for the whole of this Parliament to support a drive to give everybody an offer of support, and I can confirm to the House today that we are increasingly confident that everyone will get such an offer before the Christmas break. My hon. Friend is right to raise this issue, and I thank him for attending the summit. I hope everybody will get behind this national drive.
Ed Davey (Kingston and Surbiton) (LD)
I associate myself with the Prime Minister’s opening remarks, and join others in sending our best wishes to the Clerk of the House as he retires.
When I met the Prime Minister for social care cross-party talks in July, we talked about supporting family carers better, so I welcome the abolition of the cliff edge on carer’s allowance, which has caused so much misery, but the details are less welcome. It will not take effect for four years, and when it does, the Government will claw back £1 for every extra £1 a carer earns—a 100% tax rate for working carers. That cannot be right, so will he meet me to discuss our plans to fix carer’s allowance, which would make work pay for family carers?
The Prime Minister
I am prepared to meet the right hon. Gentleman, and I thank him for what he said. It is a start, but we are in a position where we are trying to build a cross-party consensus around better support for older people, a new social care system in which there is much stronger support for family carers, as he has so rightly argued.
Ed Davey
I am grateful to the Prime Minister for that reply. I hope the invitation will extend to the Conservatives, who want to join in real cross-party talks to solve this long-standing issue.
Turning to the economy, the Prime Minister is right to say that Britain’s best future lies back at the heart of Europe. He is also right to say that we need to build consensus within the British public to make that happen. But instead of making everyone wait for Labour’s next manifesto, will the Prime Minister start now to show the economic benefits of a closer trading relationship with Europe by joining a customs union, joining the single market, boosting growth and using the dividends of that growth to help with the cost of living by cutting people’s taxes?
The Prime Minister
As I have said today, we will not be doing those things in this Parliament, but let me come back to what I was saying to the right hon. Lady the Leader of the Opposition. We will take pragmatic steps where we can to support British business by improving the Brexit arrangements that we have got. I think it is extraordinary that the Conservative party, the Opposition, are unable to back us in getting in place those better arrangements that would make a real difference for people in their constituencies trying to export to the European Union. People will have heard that very clearly today. The Conservatives claim to be the party of business. They have turned their back on them today. This party never will.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
The Prime Minister
My hon. Friend is absolutely right to call out President Putin’s actions, which have resulted in thousands of innocent Ukrainian children being killed, people forced into the bitter cold, and sending his own Russian people to die on the frontline. I spoke to President Zelensky this morning, together with the Chancellor. We assured him of our steadfast support. We said to him that we will always take sanctions and we are committing to more sanctions. That is the clear commitment that we are making to stand with Ukraine, whatever it takes.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Llefarydd. The Prime Minister believes that devolution is the key to unlock economic growth. He champions new powers for English mayors, while still refusing Wales many of the economic levers already held by Scotland. When he meets the First Minister at the National Economic Council on Friday, the key test will be how much power he is prepared to release from Westminster, because that is how he can make a difference. We will do our part to empower communities. Will he do his and give Wales the economic powers we need to prosper?
The Prime Minister
I am ready to make an offer to Wales similar to the one I recently made to the First Minister of Scotland, and I will do so on Friday. I am glad to hear of the right hon. Lady’s commitment to pushing power down for deeper devolution. What I will put on the table on Friday is an offer of greater devolution of employment support, so that we can have a different approach to supporting people in communities to get back to work and supporting the economy. That is a starting point; there will be more to come. I look forward to working with the right hon. Lady and her party on that issue.
Maureen Burke (Glasgow North East) (Lab)
The Prime Minister
I will give my hon. Friend that commitment, because the visit I made to FARE Scotland some years ago had a huge impact, and I know that the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) was very much inspired by the same. FARE takes a very personal approach—a “names not numbers” approach—and I took that to our work in Greater Manchester on employment support. Exactly as I was saying to the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) just a moment ago, that should be the way that we approach supporting people in work across the country, as pioneered in my hon. Friend’s constituency by FARE Scotland.
Jim Shannon (Strangford) (DUP)
The Prime Minister
I thank the hon. Member for his kind wishes at the start. I completely share the deep concern about that attack, and the distressing effect that it will have had on parents, teachers and children. Obviously, there is a live and serious police investigation. I cannot comment on that, but I can tell him that the National Cyber Security Centre is providing direct expert help to the schools affected. I can be categorical with him—and I will work with him on this—that those found to be responsible will face the full force of the law.
Dave Robertson (Lichfield) (Lab)
The Prime Minister
I can absolutely give my hon. Friend that assurance.
Lee Anderson (Ashfield) (Reform)
The Prime Minister
My right hon. Friend the Communities Secretary says that she will meet the hon. Gentleman to discuss those concerns, because what he has just said in the House is extremely serious. Of course we must have the highest standards of conduct from local authorities and elected councillors, and we are monitoring the situation. I will say no more than that at this stage, but the hon. Gentleman has that clear offer of a meeting.
Josh Fenton-Glynn (Calder Valley) (Lab)
The Prime Minister
I could not agree more strongly with my right hon. Friend—sorry, my hon. Friend. I promoted him for a second—it is just a matter of time, I am sure. I was the Health Secretary who received the groundbreaking report from Professor Sir Michael Marmot, “Fair Society, Healthy Lives”, in February 2010, and in my view that remains the blueprint for how this country can close those health inequality gaps. I would be happy to meet my hon. Friend and talk more about how we do that in his constituency and beyond.
Danny Kruger (East Wiltshire) (Reform)
The Prime Minister
That is obviously a matter for the Energy Secretary. It is a quasi-judicial decision, and the hon. Gentleman will have to wait for that in due course. He will also have to wait for the details of the Budget, which my right hon. Friend the Chancellor will set out to the House shortly. The hon. Gentleman is right, however, in pointing to the fact that use of our reserves can support and accelerate a clean energy future, and that was very much the logic behind the decision that the Government announced on Jackdaw last week.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
The Prime Minister
My hon. Friend is reinforcing the point I was making earlier that the Brexit arrangements that the Conservatives left were clearly not good enough, including for his constituency. We are reviewing the potential benefits of restoring access to this important system. The relevant Minister will have heard my hon. Friend’s case today in this House and will be happy to discuss it with him.
Dr Roz Savage (South Cotswolds) (LD)
The Prime Minister
I was in the south-west, in Cornwall, in the summer to announce the funding for on-farm reservoir development, and I am pleased to tell the hon. Lady today that the application system will open very shortly. I hope that farmers in her constituency will benefit.
Josh Newbury (Cannock Chase) (Lab)
The Prime Minister
It is the case, in all the terrible situations that my hon. Friend mentioned, that people suffered unacceptable intrusion into their private lives. I understand why he is raising this issue today, and I am happy to meet him to discuss it further.
Martin Vickers (Brigg and Immingham) (Con)
One of the benefits of Brexit to my constituency has been the establishment of the Humber freeport. Can the Prime Minister give an assurance that any reset with Europe will not prevent freeports from operating as they do at the moment?
The Prime Minister
What we are trying to do is build up from where we are. That was the whole thrust of the answer that I gave to the Leader of the Opposition at the start. The hon. Gentleman sounds slightly more constructive, so I am happy to work with him on that. I hope that he will work with us to get backing for the British position at the forthcoming UK-EU summit.
Ways and Means
Financial Statement and Budget Report
(1 day, 8 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Madam Deputy Speaker (Ms Nusrat Ghani)
Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available to them from the Vote Office in Members’ Lobby at the end of the Chancellor’s statement and, of course, online. I also remind hon. Members that interventions are not taken during the Chancellor’s statement nor during the replies of the Leader of the Opposition or the leader of the Liberal Democrats. I call the Chancellor of the Exchequer.
The Chancellor of the Exchequer (John Healey)
This is a Budget for the working people of Britain, for British businesses big and small, delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home. It is a Budget built on fiscal discipline, which matches immediate action today with clear direction for the future: first, by giving Britain some breathing space on the cost of living and the cost of business; secondly, by backing the enterprise of British business to unleash innovation and growth in every postcode; and thirdly, by tackling the big challenges on energy, national security, public service procurement and transformation, and housing.
In this Budget, I will set out the new approach that this Administration is taking—led by the vision of our new Prime Minister, demonstrated in our first 100 days and carried through today’s Budget, the 10-year plan for Britain and the spending review next year, to steer us through the global economic storms today, chart a new course for Britain in the years ahead, and give people fresh hope for Britain’s future.
It is an honour to stand here as Chancellor of the Exchequer to deliver my first Budget. I had hoped that I might be the most closely watched member of the Government this week until the Prime Minister went on “Gogglebox”.
At the outset of this Budget statement, I want to pay tribute to my predecessor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves)—Britain’s first ever female Chancellor after 800 years. She brought fiscal discipline to this country. She took—[Interruption.] She took the decisions required to boost investment, cut NHS waiting lists—
Madam Deputy Speaker
Order. Colleagues who are chuntering will need a lot of stamina as we have many hours to go. Let us keep the Chamber calm.
John Healey
My right hon. Friend took the decisions required to boost investment, to cut NHS waiting lists and to lift half a million children out of poverty. I also want to thank my outstanding team of Treasury Ministers and officials, and the Office for Budget Responsibility for producing today’s forecasts.
Analysts like to speak of economic headwinds, but what we face today are global economic storms, with trade tensions acting as a drag on global growth and Putin’s illegal invasion of Ukraine approaching now the end of its fifth year. The OBR sets out that the war in the middle east is a key driver affecting its forecasts today. The Government continue to work with our allies to end the conflict and restore shipping through the strait of Hormuz.
We did not want this war, and we rejected the calls from the Leader of the Opposition to jump two-footed into it. It is a war that has driven up costs on British families and on British businesses. Inflation, which was due to fall earlier this year to the 2% target, has now risen, driven by higher oil and gas prices. Oil is up from around $70 a barrel to well over $100 and gas prices have nearly tripled since February. For families, that means higher prices at the pump, higher energy bills and higher mortgages. For businesses, it means higher running costs and more expensive business loans.
The impact is felt in the public finances, too. Driven by the conflict in the middle east, Government borrowing costs across the G7 are reaching highs not seen for decades. In today’s forecast, the OBR predicts that we will spend £14 billion more on debt interest this year. Those are the storms we face. We cannot wish them away. We must choose the course we steer through them.
Fiscal discipline is my first commitment as Chancellor. More than ever, it underwrites every promise the Government make to the British people. In the Budget today, I meet the fiscal rules: the stability rule that day-to-day spending must be covered by tax receipts; and the investment rule that Government debt, defined as public sector net financial liabilities, must be falling as percentage of GDP. This year, for the first time, I must meet those rules in the third year of the forecast, and I do. My plans continue to reduce Government borrowing so that we spend less on debt interest and more on the priorities of the British people.
First, the stability rule. In the Budget today, I have chosen to use some of the headroom established last year to absorb the impact of the Iran war to protect the economy and to protect family budgets. My choices in the Budget mean that I have kept the Labour manifesto promise not to raise tax on working people—[Interruption.] I have rejected—[Interruption.]
Madam Deputy Speaker
Order. Mr Bowie, you are sitting far too close to me to be that noisy.
John Healey
I have also rejected broad-based tax rises or slashing public services, recognising that families and businesses need breathing space. The OBR confirms today that headroom against the stability rule will be £15 billion in 2029-30 before rising to £22 billion in 2030-31. That is what a buffer is for: use it when you need it; rebuild it when you can. Despite the global challenges, the Budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within three years.
As a Labour Government, last year we cut borrowing to its lowest level in six years, from 5.1% to 4.4% of GDP. I continue that work today. In today’s forecast, borrowing falls to 4.2% this year, 3.4% next year, 2.9% in 2028-29, 2.1% in ’29-30 and 1.8% in ’30-31 and ’31-32. Our debt as a percentage of GDP is 83.2% this year, 83.8% next year and in ’28-29, before falling to 83.1% in ’29-30, 82.3% in ’30-31 and 81.7% in ’31-32.
It is because of our Labour decisions and it is because of our Labour plans that the International Monetary Fund has said that the UK now stands out as a country where
“action to reduce debt and deficit has been taken decisively”.
It projects our UK deficit will be the lowest in the G7 by 2029. The last time the IMF called the UK a standout was when Liz Truss crashed the economy. Her new book says she could have taken the British people to Mars. In reality, what she achieved in government, with help from the shadow Chancellor, was blowing a big black hole in the budget. That is the difference between Labour in government and a Conservative Government before us.
During this year of global economic shocks, forecasters predicted that the UK economy would slow down. Those predictions of gloom were about as accurate as the predictions of who would be the Chancellor. [Laughter.] Britain is defying expectations. In the first half of this year, our economy was the fastest growing in the G7, alongside the US. That is testament to the British people—the innovators, the business leaders and the workers on the frontline—and it is testament to the Labour decisions taken over the last two years. Government investment, up; business investment, up; productivity, up; and real wages, up. More since the election than in the first 10 years of the previous Conservative Governments.
I will never be complacent, but these are signs of resilience in the UK economy. Three months ago, the Bank of England upgraded its forecasts for UK growth this year, two weeks ago the IMF did the same, and today the OBR has upgraded its forecast to 1.2% this year, followed by 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. Yes, there are real challenges ahead, but Britain has beaten the forecasts this year, and with the action I am taking today, I believe Britain can beat the forecasts again.
Despite our economy’s resilience, I know that people are under pressure. Too many people feel this country is not working well for them. In particular, households and businesses face challenges from rising energy costs due directly to the conflict in the middle east. In the face of that, what matters is how we respond as a Government, and my choice in the Budget today is to give families and businesses some breathing space now and to begin the radical reform of energy to reduce bills in the future.
Last week, my right hon. Friend the Energy Secretary opposed—approved—[Laughter.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We have a long way to go. Dr Luke Evans, you will have to write yourself a prescription to calm down.
John Healey
At least they are still awake, Madam Deputy Speaker.
Last week, my right hon. Friend the Energy Secretary approved the Jackdaw gas field, boosting our energy security. This will protect hundreds of jobs and add an estimated £2.9 billion to the UK economy—a pragmatic, common-sense decision. Alongside that, I launched a new energy wealth fund for the UK. Today, I am setting a new course on energy to get UK energy costs down in line with Europe. From this point, our Labour Government priority is, first and foremost, cheaper energy, with clean power key to achieving it. This is possible because of the progress we have made towards clean power over the last two years, and this Government remain unshakeably committed to net zero by 2050. This will demand deep reform of our energy system, starting at the Budget today and carried through the 10-year plan into the months and years ahead.
For many years under Conservative Governments, policy costs were simply loaded on to household bills through levies. Today, I am putting an end to that. We will introduce a new cost control framework to drive down all aspects of energy bills, and I will scrap the upcoming gas shipper obligation—a levy to fund hydrogen projects—and instead back those projects directly from Government.
I am making further big changes to bring bills down in the long term. First, on clean power generation, this Government will only buy and build new projects when they lower bills and when they can connect to the grid. Secondly, we will further break the grip of international gas prices on our bills by moving more of our old renewables on to fixed-price contracts. Thirdly, we will build cheaper, faster grid connections through GB Grid, and reform the complex web of institutions that govern the system. This is how we deliver the radical change that Britain needs on energy. It will not happen overnight, so I am taking immediate action to give families and businesses breathing space in the here and now.
In the first week of this new Government, we took VAT off electricity for 29 million households. Today, I am extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap. For business, our new British industrial competitiveness scheme will take 25% off electricity bills for 10,000 firms at the heart of British industry. It will go live in April, and I confirm that we will make backdated payments for energy costs this year too. Next year, working with my right hon. Friend the Energy Secretary, we will go further to make bills fairer. Gas standing charges cost people over £100 a year, regardless of how much gas they use, so from next year, through Ofgem, we will remove standing charges from household gas bills. We will set out similar reforms to follow for electricity bills.
Let me say this to families at home. I know that, with the conflict in the middle east, rising energy bills are a real worry. I know that people look to the Government at times like this, not to solve all their problems but to give them a bit of breathing space—so today, I am taking one further step. This winter, for 20 million households in council tax bands A to D, I am announcing a £100 energy payment for households. It will be paid directly into people’s bank accounts to deal with rising energy bills. That is a £2.6 billion scheme to take the pressure off in the coldest months and see people through to the spring. The Scottish, Welsh and Northern Ireland Governments will receive their share of this funding, and I call on them to do the same and give people in all nations of the UK breathing space on their energy bills this winter.
Madam Deputy Speaker, £50 off VAT, £100 off council tax. For this winter, two tax cuts; for next year, fairer bills; and for the long term, radical reform of the energy market to produce cheaper power. Breathing space now and hope for the future, delivered to the British people by this Labour Government.
For millions of people, the cost of living and the cost of doing business are the same—the home is the office, the van is the family car. Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years. With the war in the middle east still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers and farmers. For anyone who relies on their car for work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and I am making permanent the increase to the standard mileage rate introduced earlier this year.
In this Budget, I am acting on other costs, too. To help with the weekly shop, I am suspending tariffs on over 100 supermarket products to keep prices down. For pensioners, I am delivering the new pension tax allowance, so that pensioners with income of up to the value of the full new state pension will not pay income tax in this Parliament. For ex-mineworkers, I am guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job is not done, and I will go on to ensure the full transfer of the guarantor’s fund. For carers, I am getting rid of the cliff edge on earnings, so that people do not lose their entire carer’s allowance when they earn a penny over the threshold. For 2.3 million of our lowest-paid workers, I am increasing both the national minimum wage and the national living wage by 3.9%.
I know that, for families, the worst thing is feeling that their kids are missing out—even on little things—because money is tight. So today I am announcing £15 million for organisations like Dolly Parton’s Imagination Library and BookTrust, which give books to children. I have heard calls for pay transparency on job adverts to close the gender pay gap, and we will act soon to make sure that women are paid and promoted fairly. This Labour Government are determined to make the economy work better for all families, so I have listened to representations from colleagues across the House about paternity leave, and I am making a down payment on change today. As a mark of respect for their role, I will make self-employed fathers and partners eligible for paid parental leave for the first time.
Since day one, I have said that I will be a Chancellor who champions the small British firms that give character to our communities: the bakeries, the cafés, the hair salons—they make the places we live and work the places we love. I want these businesses to invest, to recruit and to expand, so today I am taking action to support our high streets. In the first week of this Government, we cut 20% off business rates for pubs, clubs and music venues from April next year. I have heard calls from Members across this House and a call from one Member in particular—my right hon. Friend the Member for Makerfield (Andy Burnham)—so I am increasing the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000. That means for 70,000 more businesses, I am not just cutting their rates; I am taking them out of paying business rates altogether. That means half of our shops, restaurants and gyms will pay no business rates at all. For all other businesses in these sectors, I will freeze their rates in real terms so that none faces an above-inflation rise for the next two years.
To pay for this support for our high streets, I am raising taxes on gambling by increasing machine games duty from 20% to 25% for higher-stakes machines, while protecting pubs and seaside arcades. I will carve out adult gaming centres and vape shops from business rate reliefs and extend the business rates transitional relief supplement for another two years. I will also strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online.
For those who feel like celebrating tax cuts for our high streets, I am providing a £10 million alcohol duty relief for around 2,000 small British brewers and British cider makers. Breathing space now, fresh hope for the future—delivered to the British people by this Labour Government.
I have made my commitment to fiscal control clear, and every policy in this Budget is fully funded. I have begun by making sure that people pay the tax they owe when they owe it and by closing loopholes in our tax system. First, I am giving His Majesty’s Revenue and Customs funding to improve compliance and stronger powers to collect overdue tax from those who can clearly afford to pay but ignore repeated contact. I am reforming the administration of self-assessed income tax from 2029, bringing more of these taxpayers in line with the majority, so that they make smaller, more regular payments instead of facing large bills that are often harder to pay.
Secondly, I am changing outdated rules so that people taking profits out of their companies are taxed consistently, and I will protect the treatment of genuine commercial transactions and families passing their businesses down to the next generation.
Thirdly, I am modernising the tax treatment of investment by foreign sovereigns. This will bring UK rules more in line with other investment and other nations, while remaining still one of the most generous regimes in the world.
Fourthly, I will resolve the question of VAT for larger taxi companies, ensuring they play by the same rules no matter where they are located, while still protecting smaller local firms.
Providing support for British families and businesses has meant raising some tax to meet my commitment to fiscal discipline. I have done this in a balanced way, protecting the incentives for business investment and the incentives and income from work. I am maintaining full expensing in corporation tax for eligible assets. For other assets, I will provide greater up-front relief for new investment, increasing the main rate first-year allowance from 40% to 50%, while reducing the main writing down allowance rate from 14% to 12%.
I am reducing the threshold for business asset disposal relief in capital gains tax from £1 million to £500,000, meaning no change for three in four claimants. I am increasing the rates of tax on income from property and savings by a further two percentage points from April 2027, with no change to tax on income from dividends and no change to tax on income from employment. Eighty-eight per cent of people will pay no more tax on their savings, and I am taking a new approach today to encourage people on ordinary incomes to save and to invest. I will not go ahead with the cut to the tax-free amount that people can put into a cash ISA. The limit will stay at £20,000 per year tax-free for people of all ages. To make investment more accessible, I will work with the sector to create a new “starter ISA” to reward first-time investors.
Finally, let me turn to banks. Our world-leading banks make a huge contribution to this country—in the tax they pay and in the jobs, industry and investment they support. As Chancellor, I want to say directly to our banks: I celebrate, and am grateful for, the role that you play. Amid the global economic storms, I am looking to our banks to help fund breathing space for British families, so banks will pay an extra 3% on the bank surcharge. This will be time limited to pay for immediate support on energy bills, starting in January and ending 15 months later.
I have made my choice at this Budget: asking a bit more of our banks to support ordinary people and raising taxes on gambling to support good growth on every high street. I challenge the Leader of the Opposition. Does she support today our support for British families and British firms, and does she back the action we are taking to pay for it?
The only way we keep Britain’s families and Britain’s finances secure for the long term is with an economy that is growing strongly. Our country is one of the most innovative in the world. We have top-ranking universities, vibrant start-ups and deep capital markets. Just today I can announce over £1 billion of new life sciences investment from Kindeva, Vertex and Convatec, backed by almost £70 million of Government funding, and supporting over 1,000 jobs. I can announce that Rolls-Royce will develop its next generation of turbine engine technology here in the UK, in partnership with this Government—a £2.5 billion investment supporting thousands of jobs across the midlands, Bristol and the UK. I want to build on our strengths to unleash the innovation power of Britain to drive competition and raise profits in British business—drawing a line on the costs holding business back with stronger public control, as I have done today on energy; proudly backing Britain’s entrepreneurs to succeed; and unlocking the potential of every part of this country with a new wave of devolution.
The biggest barrier to fast-growth firms here in Britain is investment here in Britain. In today’s Budget, I am boosting investment through our public financial institutions, with a further £20.4 billion for the National Wealth Fund and the British Business Bank over the coming years, supporting 140,000 jobs. I will work with pension providers, asset managers and the wider industry to accelerate more private investment into Britain’s innovative, fast-growth firms. We will prevent regulation from holding back investment by removing regulation and tariffs worth £800 million to business. We will legislate for a regulatory carve-out so that innovative products such as drones and medicines can be safely tested and rapidly scaled. I am re-establishing the Better Regulation Executive to cut outdated regulations and admin burdens on businesses and workers—scrapped by the Tories; re-established by this Labour Government.
I am determined that we use public procurement to back British businesses, buy British goods and promote British exports, so I am expanding challenge-led procurement, just as I did in Defence, so that the Government can be the first customer for innovative firms. I am developing a new definition of UK supplier, to identify companies that are creating genuine wealth, genuine investment and jobs here in Britain. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Cartlidge, I think you have spoken more words than the Chancellor during this statement—[Hon. Members: “More!”] Ms Atkins, do not lead that with a “More”. I call the Chancellor.
John Healey
Thank you, Madam Deputy Speaker.
Nowhere is the necessary role for the state clearer than in artificial intelligence, and we must forge a British way to seize opportunities and guard against risks that is based on security. We are already world leaders in AI safety and security, which today’s Budget backs with an extra half a billion pounds. It is based on sovereignty, with our first-of-its-kind sovereign AI unit protecting UK interests by channelling Government investment into strategic British AI firms, backed today with another £140 million.
To ensure that our most sensitive data stays under British control, I am setting out a new deal for data centres in the UK. When the NHS uses AI to treat patients, we want that data here. When our armed forces use AI to keep us safe, we want that data here. So here’s the deal: I am today launching a new British data centre covenant with strict tests that data centres must meet to invest in local communities, create local jobs and protect local water supplies. In return, critical data centres will get the grid connections they need, and where necessary be allowed to build onsite generation while they wait. Built on sovereignty and security, I want to ensure that the British people can benefit from the huge potential upsides of AI, with a new AI challenge prize to find innovative uses for AI in public services, and the union learning fund to back workers. That is how Britain leads on AI: secure, safe and working for the British people.
Let me turn to enterprise. Britain does not lack great entrepreneurs, but too often we invent the technologies that the world wants here in the UK, then see the jobs and profits go somewhere else. High-growth firms make up less than 1% of small and medium-sized businesses, and they generate more than half the output. From the start-ups of today to the scale-ups of tomorrow and the billion-pound companies of the 2030s, I want to see them succeed and stay in Britain. So for those just starting out, I am tripling the trading allowance—the amount someone can earn from a new venture tax-free—from £1,000 to £3,000. I am launching a new young entrepreneurs allowance, which will cover a year of living costs for young founders while they turn their ideas into businesses. As recommended by the women in tech taskforce, I am also announcing a new scale-up programme to support female founders, and the British Business Bank will double its commitments to women-led businesses and funds to £200 million.
We need to get the best talent into our fast-growth firms, so I am reforming skilled worker visas and non-compete clauses in contracts, so that people who help build one successful company can move easily on to the next. Building on our world-leading enterprise management incentives scheme, today I am launching EMI2, doubling the generosity of the company share option plan so that more companies can hire and retain top talent as they grow.
Let me say this to the men and women building their businesses in Britain: I know that starting a company means taking a risk, often leaving a secure job to build something when there is no guarantee that it will work. I believe that when business founders take that risk, build an exceptional company and create wealth for Britain, we should recognise that success and keep those people here to invest again. That is why today I am announcing founders’ relief, a brand new relief in capital gains tax, with a 10% rate on lifetime gains up to £10 million for the founders of our most successful firms. That is how we make Britain the place where the companies of the future are built: entrepreneurs backed by this Budget, investment backed by this Budget, talent backed by this Budget, innovation backed by this Budget, growth backed by this Budget, and delivered to the British people by this Labour Government.
When I talk about unleashing Britain’s innovation power, I mean in every part of Britain. That is why we reformed the Treasury’s investment manual, the Green Book, so that we can invest in the potential of every town and city. That is what I do today in the west midlands with £10 million for a new market hall in Stafford; in the south-west with £10 million for Bristol’s Temple quarter and £3 million to help Plymouth’s young people get jobs in defence; in the east of England with new access to Government borrowing for the Greater Cambridge Development Corporation; and in the north with £15 million to upgrade the Leeds College of Building, £10 million for Bury’s indoor market, £20 million to restore Liverpool’s Littlewoods building and £3 million for a tech company incubator in the Don valley. I can announce that we will hold the next international investment summit in Gateshead in the spring.
The devolved Governments will receive equivalent funding for the measures in this Budget, and today I am also investing directly in high-growth industries in Scotland, Wales and Northern Ireland. In Wales, there is £2.5 million for a science park in north Wales, £11 million for the Aberavon bridge and £30 million for Cardiff Parkway station; in Scotland, there is £18 million for advanced chip design led by Edinburgh University and £6 million for Glasgow’s Scottish event campus; and in Northern Ireland, there is £7.5 million for AI and cyber in Belfast. [Interruption.]
Madam Deputy Speaker
Order. I am sorry to interrupt the Chancellor again, but Mr Holmes, just like last year, your voice is carrying far too heavily across the Chamber, and the hon. Member for Bridlington and The Wolds (Charlie Dewhirst) promised me and his young daughter this morning, on the way to work, that he would behave—he has let himself down and his daughter down. [Interruption.] Order. I call the Chancellor.
John Healey
All power to your elbow, Madam Deputy Speaker.
London is the UK’s economic powerhouse, but if our other great cities matched their counterparts in France and Germany, growth in this country would be transformed. Local leaders should not have to come cap in hand to Whitehall to build a new tram or a new concert hall, and when those projects lead to growing local companies and rising local incomes, it should be those same areas that keep the proceeds.
This radical rewiring of the state is a dual mission, led by the Treasury and No. 10 North. In today’s Budget, I am announcing new good growth funds for mayors and incubator capital for areas without mayors. I am announcing flexible funding to invest in local economies, boosted by a further £1.5 billion of devolved loans for mayoral authorities—funds that will back projects such as the new Black Country metro extension, led by the Mayor of the West Midlands; the urban regeneration in Gateshead Quayside, led by the Mayor of the North East; and, in my home region, the reopening of Doncaster airport, led by the Mayor of South Yorkshire.
This is unfinished business for me. As a Treasury Minister in the last Labour Government, I was proud to help create the regional development agencies. They delivered economic growth and local regeneration, before they were axed in 2010 by the Tory-Lib Dem coalition Government. But there is a further step that we never took—the most radical act of devolution in a generation: the devolution of tax revenues. That is the step I take today, alongside this Budget—a road map for fiscal devolution.
For the first time, I am making the commitment that 100% of business rates will be retained locally by the end of the decade, so if local leaders help businesses to start and grow, more of the rates they pay will stay in that area. From next year, 20% of business rates revenues will go to mayors, and from 2028, a share of income tax receipts will go to mayors as well.
Also from 2028, mayors and other strategic authorities will have new powers to introduce an overnight visitor levy. Taken together, these are long-term funding streams that they can use to back investment into big local infrastructure, so that more of the money that is raised locally can be invested and spent locally, on projects like the Trent sports district, led by the Mayor of the East Midlands, and the Bakerloo line extension, led by the Mayor of London. These are new powers for the people who know their areas best—not sentimentality, but supply side economics. It is the biggest wave of devolution in a generation, driving good growth in every postcode, delivered to the British people by this Labour Government.
I decided on an early Budget to give the country a bit of breathing space, and to provide stability and direction in the face of speculation. We will continue to map out that direction for Britain through the Prime Minister’s 10-year plan and the spending review.
The Labour party is the party of public services. Since 2024, we have rejected austerity, we have been rebuilding our public services with over £40 billion a year of extra day-to-day spending, and we are making our streets and borders safer, fixing crumbling classrooms, extending childcare and restoring our NHS, spending £37 billion more on health this year than in the last year of the last Conservative Government. Today I am accelerating our work to halve violence against women and girls, and setting up a new misogyny prevention fund, partnering with the private sector.
I want to pay tribute to my Cabinet colleagues and thank them for everything they are doing, prioritising within their Department budgets in the face of tough fiscal constraints. In today’s Budget, I am fully funding the defence investment plan, including through capital reprioritisation across Whitehall. This honours the commitment made both by me and by the Prime Minister.
As we look ahead to the spending review, we start from a position of strength, with spending at that higher base. There will be choices we have to make about priorities, as we have shown we can, and efficiencies we must deliver, as we have shown we can. Last year, Departments hit double their productivity and efficiency target, generating £16 billion of savings. Asylum costs, which tripled under the last Conservative Government, have been cut by £1 billion under this Labour Government.
Strong public services and strong fiscal discipline are two pillars of our Labour approach, but delivering the next spending review will also require a fundamental rewiring of the state. First, a digital overhaul of Government. In the Budget today, I am investing in AI for the civil service transformation, to support saving a further £600 million from back-office costs. Alongside my right hon. Friend the Health Secretary, I am launching a review of NHS productivity and AI, so staff can spend their time with patients and not on admin.
Secondly, streamlining the state through devolution, reducing the double running between central and local Government. Today’s Budget provides £100 million for a local apprenticeship service to match young people with local firms, funded from savings in welfare fraud and error.
Thirdly, a new focus on prevention. Just as we ringfence capital spending to invest in future success, so at the next spending review I will ringfence prevention spending that brings down costs in the future, with new preventative departmental expenditure limits.
When it comes to welfare, the last Conservative Government left a broken system—a broken system that we are changing. Bringing back face-to-face assessments, rebalancing universal credit so it does not force people to label themselves as too sick to work, reforming Motability and clamping down on those living abroad from accessing a UK state pension on the cheap, but there is more to do. I refuse to write off a million young people, like the last Conservative Government. I refuse to see disabled people suffer the indignities of a system that has been found “not fit for purpose”, and I refuse to allow the burden of paying for this failing system to fall on taxpayers for decades to come. As the Prime Minister and I have both said, we will bring down the welfare bill, and we will do it in a Labour way.
Alan Milburn and the Timms panel will publish their final reports next month. This Government will then set out our response before the end of the year, with a White Paper and legislation to follow next year. The Prime Minister has already announced that from 2030 we will adjust the triple lock, so that the state pension rises every year and keeps pace with earnings and inflation. This will save £15 billion a year by the end of the 2030s—£50 billion by 2050. A new settlement for older generations: a rising state pension and a national care service that is there when older people need it, taking the burden off families and taking the burden off our NHS. Taken together, these reforms reject crude cuts that intensify cost of living pressures and drive up costs elsewhere in the system. Taken together, these reforms will rebuild our welfare system so that it supports people from youth into old age. This is our Labour approach—tackling long-term challenges, improving public services and restoring hope for the future.
Let me now come to two more long-term challenges, First, defence. The week in Kyiv started with Russia launching another brutal ballistic missile attack on the city. This morning, the Prime Minister and I called President Zelensky to tell him about our commitments in the Budget. He told us, “You have made my day.” There will be £10 billion of additional economic and military support, based on loans, export finance guarantees and half a billion in urgent military funding for this winter. The whole House—the whole country—is united for Ukraine. Today, we send a clear message to Moscow: Britain will stand with Ukraine for as long as it takes.
In this new era of threat, the demands on our UK defence are rising. Keeping the people safe by equipping our armed forces is the first duty of any Government. I say this as Chancellor; as a former Defence Secretary; and as a dad whose son is an Army reservist—a reservist who came back four years ago from early training to say that they had no kit and no bullets to fire. That is the truth. For 14 years, Conservative Governments hollowed out and underfunded our armed forces. I am proud to be part of a Labour Government who have made the biggest increase in defence spending since the end of the cold war.
This year, our defence budget is £14 billion higher than it was in the Conservatives’ last year of government. At the spending review next year, I confirm that I will set out the details of how we will meet our NATO commitment to spend 3.5% of GDP on defence by 2035, with a target date for 3% in 2030. Today, I am getting work under way to get there in a fiscally sustainable way. That will include looking hard at public spending, as I have done today to fund the defence investment plan, but I am also determined to use more innovative financing, alongside the private sector and our international allies.
First, I am launching today the new innovative defence finance taskforce to lead this work ahead of the spending review. Secondly, I am now confirming that we will commence treaty negotiations on the multilateral defence mechanism—or bank—with Finland, Poland, and the Netherlands to boost defence investment and joint procurement across NATO allies. Thirdly, we will expand our defence industrial base by getting the maximum amount of private investment into defence, including through public-private partnerships. Fourthly, as an immediate step, I can tell the House that the national wealth fund and the British Business Bank will launch a new focus on defence, dual-use technology and sovereign capability, deploying up to £5 billion of investment and lending over the next four years.
I will ensure this record defence investment works twice: once for our national security, and once for British jobs and British business. Places across all four nations—Barrow, Rosyth, Aldershot, Plymouth, Glascoed and Belfast—reindustrialised and transformed. Security for our nation, jobs for our people, fresh hope for the future—delivered for Britain by this Labour Government.
Let me now turn to housing. On Monday, the Prime Minister and I met Les at the Connection project at St Martin-in-the-Fields, just a stone’s throw from this Chamber. He had spent three months sleeping on the streets; now, he has a room, medical help and a bit of hope for the future. Les told me:
“Now I have the chance, I want to make something of my life.”
Anne, the nurse at the project, put it this way. She said that they
“put the team around the person”.
That is what we will do as a nation.
The Conservatives did promise to end rough sleeping, yet when they left office it had doubled. Ten years ago, as shadow Housing Secretary, I argued that rough sleeping was a shame on the nation. I said it could be solved, but only with national will. Government can fix this, if they choose, and this Government have chosen. We have already promised everyone sleeping rough a route off the streets this winter, and today, I confirm a further £430 million to keep that offer open for the rest of this Parliament—not just this winter, but every winter. This is a moral mission for me, a moral mission for the Prime Minister and a moral mission for the Labour party.
Home is the heart of all our lives. It is the foundation on which we raise our families and build our hopes. Rough sleeping is the sharp end—a symptom of a system that feels broken to too many people. Since the 1980s, Britain has lost over 2 million council homes. Tonight, more than 170,000 children will sleep in temporary accommodation. Two in five young people are trapped, paying more than a third of their income in rent while they watch their hopes of buying their own home slip away. I am taking action today to deal with immediate pressures and taking decisions to start to deal with the long-term challenges.
To get more homes built, I am drawing the line on constant changes to building regulations. There will be no major changes to building regulations in this Parliament, except where critical for safety, and I am removing biodiversity requirements for more brownfield sites. To get more council homes built, I am extending cheaper borrowing for councils and making all land sold to social housing providers VAT-free. Today, I am providing an additional £1.5 billion for the social and affordable housing programme, taking our total Government commitment backing council housing to £40 billion. The Conservatives sold off our council houses; Labour is now building them back.
Finally, for every young person who is working hard, saving what they can and dreaming of their first home, I am taking action. I am announcing that a first-time buyer ISA will replace the lifetime ISA. From today, I am dealing with the LISA penalty, so that if the home you want costs more than the limit, you will get back at least what you put in. And I am going further. From next spring, we have a new scheme for first-time buyers who do not have the bank of mum and dad behind them: Your First Home—an equity loan scheme, which I am funding today with £4.7 billion of Government-backed lending. Hope starts with a home. A route off the streets, a secure home to raise your kids, the keys to your own front door—delivered to the British people by this Labour Government.
This is a Labour Budget for the worker, the sole trader, the parent at the school gate, and the young person desperate to start their first job or start their first business. These are my choices: raising revenue from those who can afford to pay; no tax rises on wages or dividends; and cutting taxes for millions of families and businesses. Just as the British people helped to support our banks 20 years ago, it is our banks that will help to give families breathing space today. For our high streets, it is gaming machines and vape shops that will help to provide the funding for our pubs, shops and cafés to thrive—breathing space now, while taking the long-term action to get costs down for good.
The decisions I have taken today will help to steer Britain through. When the storms pass, what matters is where Britain is heading—a Britain reindustrialised; a Britain with power returned to communities, threats deterred and global opportunities seized. In our first 100 days, this Labour Government have set a course for fresh hope, good growth and support for those who need it. We know who we are, and we know where we are going. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Bhatti, there is no need for that.
John Healey
We know who we are, and we know where we are going. We can see the Britain we want to be. It is a vision burned into every line of this Budget statement—breathing space now, fresh hope for the future, delivered to the British people by this Labour Government. I commend this statement to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Stamp duty land tax (local government pension scheme pools) (motion no. 49);
(b) Stamp duty land tax (withdrawal of group relief) (motion no. 51);
(c) Value added tax (electric vehicle charging) (motion no. 55).—(John Healey.)
Question agreed to.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 3 November. I call the Chancellor to move the motion formally.
Budget Resolutions and Economic Situation
(1 day, 8 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Leader of the official Opposition.
Mrs Kemi Badenoch (North West Essex) (Con)
Thank you, Madam Deputy Speaker. I would have thanked the Chancellor for advance sight of his statement, but it was so redacted it was like reading it in the dark. The only numbers were the page numbers, quite frankly.
This is Labour’s third Budget in office—[Interruption.]
Madam Deputy Speaker
Order. I apologise for interrupting the Leader of the official Opposition, but if Members are leaving the Chamber, they should leave very quietly and very quickly.
Mrs Badenoch
This is Labour’s third Budget in office, this time with a new Chancellor. I welcome the right hon. Gentleman to his place. I believe there is a term in rugby called a hospital pass, which sums up the inheritance he received from his predecessor, the right hon. Member for Leeds West and Pudsey (Rachel Reeves). Last year, she gave us the Budget for “Benefits Street”; I said that it would be her last Budget, and I was right. The Chancellor may want to blame external events, but Labour’s last two Budgets weakened our economy before any wars. He has got a big job to do cleaning up her mess, and this Budget fails to do it.
The Chancellor is giving this Budget at a time of great economic danger. We are spending more on debt interest than on the Army and schools combined. The rate of interest we pay on our debts is higher than that in Greece, Latvia, Slovakia and even the Socialist Republic of Vietnam. Next year, under Labour, the tax burden will be the highest in our country’s history, and our benefits bill is going up by tens of billions of pounds because this Government have put welfare first. We are overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system, and this is the Chancellor’s answer? It is simply not enough—not good enough, not strong enough, and not bold enough.
Last week, the Government published their resilience plan. I am afraid that three days of baked beans and a wind-up radio are not going to save us. Labour’s Britain has no resilience. There is no household resilience, because families are struggling to make ends meet. There is no fiscal resilience, because we are borrowing just to pay the interest on our debt. There is no economic resilience, because businesses have been taxed so much that they are closing down and shedding jobs, and there is no national resilience, because we are not ready to meet the security threats of today—certainly not after that speech. We all know why the Chancellor has delayed until tomorrow difficult decisions that he should have taken today. It is because the Prime Minister wants to keep the option of an early general election open, putting his party’s interests before the country’s.
There are, however, some things in this Budget that I welcome. Some of the Chancellor’s colleagues—the Deputy Prime Minister, the Defence Secretary and the Energy Secretary—were calling on him to increase capital gains tax. I thank him for ignoring them—they were wrong. Tens of thousands of wealth creators have already fled Labour’s Britain, and if he had listened to his colleagues’ bonkers ideas, many more would be heading for the departure lounge. I am also glad that he has broken Labour’s manifesto pledge on the minimum wage for young people; that pledge was wrong, and breaking it is the right thing to do to help young people get jobs.
I welcome the Chancellor’s U-turn on ISAs. He is reversing his predecessor’s raid on ISAs—thank you—but his new tax on savers will penalise the prudent and all those people who have done the right thing. I am glad that he has agreed with our campaign on the previous Chancellor’s fuel duty rise. Motorists will be pleased—that rise would have inflicted real pain, especially while petrol prices are so high—but those prices will go up in July. Why? We froze fuel duty for 14 years; Labour can do better than that.
I know that Labour MPs probably did not like those bits of the Budget, but can I take a moment to say to the right hon. Gentleman that I have been appalled to see the brutal briefing about him from his own side in this week’s papers? One Labour MP called him “slow”. “A dud.”
“Visibly out of his depth”,
said another. [Interruption.] We have all read it. They are not my words—they are Labour MPs’ words. One of them said it, and another came in after, but I can assure the Chancellor that he will not be hearing that kind of language from Conservative MPs today. With friends like that, who needs enemies?
Most people in the country listening to the right hon. Gentleman’s Budget will be thinking to themselves, “Is that it? Really, is that it?” The Prime Minister came in promising to reverse “40 years of neoliberalism”; instead, we got 4p off gherkins. Unfortunately, just like every other Labour Budget, the headline story is the same: more borrowing, more tax rises and—surprise, surprise—more money on benefits. This Budget does not come close to meeting the moment.
Last week, Labour MPs were asking for a Budget that did no harm. That shows how little ambition they have for this country. Let me tell them: the harm has already been done. Not facing up to the tough decisions we need to take is itself an act of immense harm. Many Labour MPs do not understand that our national debt is now more than £100,000 for every household in this country. They do not understand why it is a problem that a quarter of all working-age adults are now claiming some form of benefits. They do not understand that if Russia launches an attack on NATO in the next three years, as the Government’s own intelligence suggests, we will be at war without the means to properly defend ourselves. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Ms Dawn Butler, Adam Jogee, and Mr Vince—what would baby Patrick say? Behave better than your child.
Mrs Badenoch
Look at them, Madam Deputy Speaker. If war comes, do we want this lot running the country—people so unserious that they do not understand that you cannot have social security without national security? If we cannot defend our country, there will be nothing left to defend. To be honest, I do not blame the Housing Secretary for stocking up on sauvignon blanc. If Russia attacks with these guys in charge, we will all need a drink.
Mrs Badenoch
The Defence Secretary is chuntering; he could not even commit to 3% on TV the other day. He is still not doing his job. The fact is that there are huge problems coming down the road, and this Budget is simply trying to get through today. It is a Budget for getting by, not for getting on.
I was cautiously optimistic when the right hon. Gentleman was appointed Chancellor. This is a man who once seemed to grasp the danger that Britain is now in. I thought that he was putting country before party when he quit as Defence Secretary—he will remember that I said he was a man of principle. Let me remind him what he wrote in that resignation letter in June. He said:
“I am certain that a…date for 3% of GDP on defence in 2030 is what Britain must set.”
[Interruption.] I have not finished—Labour MPs will have to wait for the punchline. They are so slow. He went on to say that if that did not happen, he would be
“forced to make decisions that would…increase the risk to personnel on operations, and could make the country less safe.”
Today is the day he should have set that date. He is the man who has failed to set a plan for 3%. [Interruption.] Today is the day that we should have got the plan.
Madam Deputy Speaker
Order. I am not sure which side is the most noisy. The Defence Secretary will have to have a lie down in a dark room if he carries on like that.
Mrs Badenoch
The Chancellor should have set out a plan for 3% today. Now he is the man who is increasing risk to personnel on operations. He is the man who is making our country less safe. He has failed his own test. This is on him, and no one will ever forget. If he had any decency, he would resign again today. Yes, the Chancellor has funded the defence investment plan, and that is welcome, and yes, there is more support for Ukraine, and that is welcome, but he said himself in June that that was not enough. He has given himself a bit of breathing space until next year. Instead what we have is a plan to have a plan. I bet Putin is really scared now.
We know that finding the money is difficult, but it can be done. On the Opposition Benches, we have found the savings to get to 3%, because we know Britain is facing very serious threats. The defence funding that the Government have announced today relies on more borrowing. Let me explain why that will only make us weaker. The OBR confirmed today that Britain’s national debt is forecast to increase again. We are borrowing just to pay the interest on that debt. The credit card has been maxed out and the Chancellor is taking out new credit cards just to pay the interest on the old ones. The three Labour Budgets will have added more than £260 billion to the national debt. Our great grandchildren will be paying for Labour’s total lack of self-restraint.
Meanwhile, the Prime Minister is fantasising about rejoining the EU. There is just one problem: under Labour, Britain is now borrowing so much that we would not even qualify for EU entry. The Chancellor clings to the IMF’s praise of the Government’s deficit reduction plans, but the truth is that the IMF has to take at face value the idea that Labour will cut public spending massively just before the next election. Really? Are these MPs signed up to the cuts in those plans? These are the same MPs who voted down the most modest welfare reforms in the history of this House. They are never going to cut spending. That is why this month, the IFS described the Government’s plans as “a work of fiction”.
I can tell the House who else is not fooled by Labour’s fantasy figures: the bond markets. Britain is now paying more to borrow than at any point in the past 30 years. Those borrowing costs are hurting people today. Businesses are struggling to afford loans because of rising interest rates. Five-year mortgage rates are now above 6%. Rates are far higher now than they ever were under us. We have the utter cheek of the Chancellor and Labour MPs raising the mini-Budget when Government borrowing rates are far higher now. They are higher than under any Conservative Prime Minister. These are their interest rates; these are their borrowing costs; and this is their mess—they need to own it. The Chancellor knows that next week interest rates are expected to rise again. Only the Labour party would think that the answer is to spend more money. [Interruption.] I know the Education Secretary cannot count, so she thinks this is all fantastic. Come on, have you got something more to add? Can you add?
Madam Deputy Speaker
Order. We have to showcase the best of ourselves. Our constituents are watching. [Interruption.] I really do not need any help. Ms Emily Darlington, you are normally so polite and so well behaved, but today is not a great day.
Mrs Badenoch
They love to dish it out, Madam Deputy Speaker, but they cannot take it. [Interruption.] What was that from the Education Secretary? I am sorry, but I cannot hear her, because the rest of the class are making too much noise.
Inflation is eating away at our standard of living. Labour’s friends in the Joseph Rowntree Foundation have said that this could be the worst Parliament on record for living standards, but Labour has looked after its people. There have been plenty of pay rises for the unions. Benefits will go up. [Interruption.] It is true, there have been plenty of pay rises for Labour’s friends in the unions. Benefits will go up by inflation in April, but private sector wages this year are below inflation. People in the private sector are getting poorer. They can all feel it. Those on benefits are getting an increase, while those going out to work will not. That is not fair.
The problem is that Labour is addicted to spending other people’s money and addicted to welfare. The welfare Secretary said it himself. Talking about Labour MPs, he said:
“Every meeting I have is: ‘Who can we tax in order to pay benefits to others?’”
Since the last Budget just 11 months ago, the equivalent of the entire city of York has signed on to disability benefits. And why would they not, when sickness benefits pay more than the minimum wage? Jobs have been destroyed by Labour, and this Government have made it easier than ever to claim. It is honestly like their policies are designed to get people off work and on welfare. Just because it is called universal credit does not mean that everyone in the universe should be on benefits.
The issue is not just about cutting the benefits bill. This welfare burden is deeply unfair to those who are working hard and making ends meet—those people making tough decisions about whether they can move home or afford to have children. How do Members think they feel when they hear that working-age welfare is now costing every taxpayer £4,000 a year?
Cutting welfare is not just about saving money. A million young people in this country wake up with nothing to do and nowhere to go. Unemployment among 20 to 24-year-olds is now higher in London than in Bulgaria, the second-poorest country in the EU. Labour is creating a lost generation, isolated and powerless over their futures.
Britain is about to collapse under the weight of welfare. We have to start showing people some tough love. Deep down, the Chancellor knows that spending more money is not the answer. He talks about giving people breathing space, but the Government are the ones choking the economy. We have seen £70 billion of new taxes in just two years, and they have put them up again today. He said he would not be putting taxes on working people. That is what the last Chancellor said, too, but he has, because the Government are taxing everything that they can get their hands on. They have taxed jobs, pensions and cars. They have taxed the rental market today. They have taxed savings, investments and homes. He asked me whether I support the action that they are taking today. No, I do not support the action that they are taking today.
The Chancellor also said that this is a Budget for business that will unleash enterprise. That must be why the entrepreneurship adviser quit this week. There is nothing for business here. He wants to charge them more for the union learning fund, was it? Business does not want these random new schemes. Let me tell him: business confidence is negative not just this quarter, and not just the last quarter, but for seven quarters in a row. That has never happened before. In case Labour MPs do not understand what that means, the last time business confidence was positive was when we were in charge.
The Chancellor says that he is helping with the cost of doing business. Businesses need cheaper energy, flexible labour markets and lower taxes. They are getting none of those. Nearly half of businesses say that they have cut employment because of Labour’s jobs tax. There are now fewer vacancies in the economy than at any point in the last 12 years, outside the pandemic. Graduate vacancies are down by almost 50% this year. They were the worst on record last year, and under Labour they are again even worse—the worst on record this year. I was hoping that the Chancellor would do something on plan 2 student loans today, but he has not even done that. When was the last time any of them spoke to a graduate looking for a job? Parents are watching their children receive rejection after rejection. Companies report 140 applicants chasing every job. Unemployment has risen by a quarter of a million people since Labour came in: a quarter of a million people, under this lot.
So let me tell them some home truths. They have made wages expensive with their jobs tax. They have made energy expensive with their net zero policies. They have made capital expensive by increasing the cost of borrowing. What happens when wages, energy and capital are expensive? Nothing gets built. That is why the economy is grinding to a halt. Labour said that it was going to build 1.5 million new homes. I remember when the Housing Secretary first started, and I told her that she had been stitched up. Do you know what she is saying now, Madam Deputy Speaker? She says that now there is a “slim chance” that Labour will build 1.5 million new homes. They are not going to build them. They are not even going to build as many as we did, despite their lofty ambitions. They promised to secure the future of Britain’s steel industry. Now taxpayers are spending £1.3 million a day propping up British Steel alone. They promised to create 650,000 clean energy jobs. Where are they? Nothing has been created except unemployment.
Let me tell you, Madam Deputy Speaker, what has actually happened since last year’s Budget for “Benefits Street”. Inflation—[Hon. Members: “Up!”] Government spending—[Hon. Members: “Up!”] They can join in now on the Labour side, because they know the words—we heard them. Debt interest—[Hon. Members: “Up!”] Mortgage rates—[Hon. Members: “Up!”] Benefits claims—[Hon. Members: “Up!”] Unemployment—[Hon. Members: “Up!”] Welfare spending—[Hon. Members: “Up!”]
The report card is not looking good. They are making the same mistake with banking that they made with oil and gas: tax one of Britain’s flagship industries until it packs up and leaves. The result? The country gets less money in tax. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Gemmell, yowling for so long will be very bad for your throat, so simmer down.
Mrs Badenoch
I see that the Minister for Pensions is leaving. I guess he could not handle the truth.
Everything in our economy is being made more expensive by Labour’s taxes. Next year, under Labour, Britain will have the highest tax burden in our country’s history—higher than in the 1970s, higher than in the second world war, higher than in the Napoleonic wars. [Interruption.] She asks, “Whose fault is that?” It is your fault. She is asleep at the back of the class. The Education Secretary might want to take a look at that student.
What have we learned from the Office for Budget Responsibility today? Growth next year: downgraded. Inflation: up every year until 2030. Real household disposable income: lower every year. We have learned that the Chancellor’s debt interest bill will be £14 billion higher than expected, and the debt will be higher in every single year compared to the previous plan. How is this giving us breathing space?
There is a better way that would actually deliver for the people of this country. There is a logical order to creating growth in an economy. You have to create value, prosperity and wealth first, before you distribute it. That is how it works. Labour is only interested in the distribution; it has no plan to create any value at all. We on the Conservative side of the House want to see Britain richer, more prosperous and thriving—not just a little bit of breathing space. That is why Conservatives are proposing tough love. We will cut spending by £70 billion, including £36 billion from welfare—cuts that are fair to taxpayers, and fair to those who really need support. We would use half of that money to cut the deficit, so that Britain does not go bankrupt and borrowing rates start to come down. That is how we get cheaper mortgages. And we will fund our defence properly, because keeping our country safe should be the first priority of any Government.
Getting the public finances under control and living within our means will allow us to cut taxes, because that is what really gives people breathing space. Scrapping the carbon tax to bring down energy bills, scrapping stamp duty, abolishing inheritance tax on family homes—that is what people want. So let us cut spending, cut the deficit, fund defence, and cut people’s taxes. That is the Budget that the Chancellor should have delivered today. That is the Budget that Conservatives would have delivered. And that is going to be the choice at the next election.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The right hon. Member for North West Essex (Mrs Badenoch) needs to have a tough look at the reputation of her Government. She talks about welfare and she talks about defence, but it was her Government who crashed the economy. Under her Government, welfare spending rose by 0.7% of GDP in the last Parliament alone, and in the last year of the Government in which she served it rose by £33 billion. She knows—we all know—that reform is necessary, and reform is coming, because under this Labour Government we are reforming the social security safety net and ending the scandal of young people on personal independence payments, who, in droves, are being put on a benefit that they are less likely to come off than someone over the age of 55.
As the Prime Minister said earlier, Labour’s approach is a “names, not numbers” approach. There is a lot of thought going in, and I pay tribute to Alan Milburn for his thinking about how to reform the system as a whole. It is easy to talk about numbers and top-slicing, but that takes no account of the human beings at the heart of the benefits system.
Graham Stuart (Beverley and Holderness) (Con)
The hon. Lady is making a typically powerful speech, but, in my 21 years in the House, I have normally found that the person who holds her position gives a somewhat less partisan critique of the Budget, recognising that the primary role of all of us as Back Benchers is to hold the Executive—the Government of the day—to account, rather than just playing to our party political base.
Dame Meg Hillier
I look to the reputation of my predecessor in this role, who took her job very seriously but would still make a point. It would be very difficult for me to stand up and, from the Government Back Benches, not react to those in the Conservative party who crashed the economy in 2022 and left a lot of the mess that we are now dealing with. I am passionate about these issues because I spend a long time looking at public spending and at the waste of the previous Government, as does the Public Accounts Committee, quite rightly. It should challenge this Government on any waste of taxpayer pounds, because taxpayers work hard for their money and they need to be sure that someone is watching the Government to make sure that they are spending it as well as they can. We know that that is not always a simple task.
I look to welfare reform. Yesterday, I was with the Secretary of State for Work and Pensions in my constituency of Hackney South and Shoreditch. We met with Scope, which is doing amazing work with disabled people. Some 72% of the recent cohort supported into work were still in work 26 weeks later—people who had been written off by the system. If we make sure that it is done properly through some of the devolution measures that the Government propose, we can make sure that the “names not numbers” approach is replicated across the country, where there are already good examples.
I welcome the Chancellor’s decision to fund the defence investment plan—again, I looked at this issue for many years as Chair of the Public Accounts Committee. It is right that we stand with Ukraine—a cross-party position—and it is right that we spend the right money on defence. Unfortunately, the last Government reduced the money spent on defence to a ridiculously low level under austerity, leaving us exposed to the challenges we face in the world. I hope that we will have cross-party consensus that we need to increase defence spending and back the Chancellor in that mission.
Chris Coghlan (Dorking and Horley) (LD)
I was very pleased to see the Chancellor announce £5 billion more in the Budget for defence research and development, which—[Interruption.]
Madam Deputy Speaker
Order. Whose phone is going off? Please fix your phone.
Chris Coghlan
Does the hon. Member agree that the announcement of £5 billion more in the Budget for defence R&D through the British Business Bank could have profoundly positive implications for our national security and growth, as I have urged, if the Government scale it further from here?
Dame Meg Hillier
I count the hon. Gentleman as a friend, because he serves on the Treasury Committee and is indefatigable in his attempts to ensure that the Government are listening about research and development in defence and across wider sectors. It sounds as though, between us, the Government have heard that message.
Before I move on to the main thrust of the Budget, I want to address the Leader of the Opposition’s comment about plan 2 student loans. The Treasury Committee looked at this issue, which is having a very big impact on that generation of young graduates—the engine room of Britain, and the people who will be funding and growing our economy in the years to come, and making sure that the ageing population is supported. We need to do everything we can, and intergenerational fairness is a big strand of the Treasury Committee’s concerns, but let us be clear: who set up plan 2 student loans? It was the previous Government.
I talk a lot about slow politics. Governments should make decisions that will stand the test of time in 10 or 20 years, as well as dealing with the challenges of today and the catastrophes that might occur, either globally or locally, next week. Plan 2 student loans were designed by the Conservative Government and left as a ticking time bomb for this generation to pick up. Although I am saddened that we have not seen a change to the threshold at which repayments are made, I hope that the Chancellor will consider that as part of his longer-term plans, to make sure that this generation has one fewer burden. I hope that we will see some talk about that in the weeks to come.
Before the Chancellor rose to his feet it seems that some bank shares increased in value. I am concerned about that and, with the permission of the Treasury Committee, I will write to the Financial Conduct Authority to see if there is any evidence of leaked market-sensitive information that may have led to that movement, because that would be a very serious issue. On that point, I congratulate my right hon. Friend the Chancellor on his very strong clampdown on speculation and leaks ahead of this Budget. He knows, as we all do, that stability is so important. He cannot completely halt wild speculation, but clamping down on leaks from the Treasury and the wider system is very important.
Despite the headwinds, the debt forecast has only slightly worsened. We have seen a Budget that pushes stability, and I welcome some changes in particular. The Treasury Committee looked at cash ISAs and the changes that were proposed in last year’s Budget, and as we said then, it was not the right approach. Building societies use cash ISAs to lend to home purchasers, and they were going to be particularly badly hit. Most people have much less than £20,000 in a cash ISA, and many never get anywhere near £12,000. The average is between £3,000 and £7,000, depending on how we cut the figures, so it is right that the Chancellor has made changes. I look forward to seeing the starter ISA for investors, and the Committee will examine the changes in detail, but the previous proposal had overcomplicated the system. The ISA is a trusted brand, and the Chancellor has taken a good step.
On the subject of building societies and mutuals, in a hidden corner of the Red Book is the announcement that my hon. Friend the Member for Peterborough (Andrew Pakes) has been appointed as the Government’s co-ops and mutuals champion. I commend him for achieving that position following his many years of hard work in this area. As the chair of the Co-operative group of MPs in Parliament, I am delighted that the Government are further leaning into the progress they have already made in supporting co-ops and mutuals. That is important for getting growth and the involvement of people in every community up and down the country, because this is a way of people owning and having a say in the shaping of their services and their outcomes, whether it is a credit union, a food co-op or a childcare co-op—the list goes on. There are many opportunities.
I welcome the reform of lifetime ISAs—again, something that the Treasury Committee produced a report on. The removal of the penalty payment seems like the only just approach to that. We have a challenge when products such as ISAs are created but do not work as well as they could, so I welcome the Chancellor looking at that.
I am delighted to see some changes in housing. In my constituency, house prices are rocketing through the roof, rents are high and thousands of people are living in temporary accommodation, and those in housing are often severely overcrowded. Every weekend I visit people who are living with three children in a one-bedroom flat—a very typical picture—with no freedom or agency to move, because the cost of housing is too high, the cost of rent is too high, and we do not have enough social housing. Indeed, it is cheaper to buy back from a leaseholder who is selling their property than it is to build new houses, so the VAT reduction for housing associations is a welcome first step.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I am a Member who represents a part of the United Kingdom where government is devolved. Despite the good intentions of this Government, the money that goes north sometimes goes into the tube and what comes out the other end is sometimes rather different, particularly on housing. Is that something the Treasury Committee could look at one day, to see whether what is delivered was the intention of His Majesty’s Government?
Dame Meg Hillier
The hon. Gentleman anticipates a further area of my speech. I believe very firmly in devolution, but there are some caveats. That is something that we may consider. Of course, I chair the Treasury Committee, but I do not make all the decisions for the Committee—it is not an autocracy, unless its members choose to make it that way—so we will discuss that issue.
On housing, there are areas that are too detailed to go into the Budget, but I hope there is some discussion in the forthcoming spending review about system-built housing. In Murray Grove in Hoxton, in my constituency, some millennium products built by Peabody still stand the test of time. They were system-built offsite, which reduces the cost of construction and makes it faster, but we do not have enough throughput in the factories that do this for them to survive and thrive. That is a potential opportunity for us in the UK.
The Chancellor has a huge challenge. We are facing very difficult fiscal circumstances, but the wider picture is that we are seeing some green shoots of hope. According to early estimates, the economy grew by 1.8% year on year in the three months to August—the fastest pace since the country was rebounding from the pandemic in 2022. GDP has grown at an annualised pace of 2.7% so far in 2026, with early estimates indicating that growth has continued into the third quarter, and productivity has grown by more than 1% per worker in every quarter since the end of 2024. There is a degree of hope that if we keep stability and keep focused, we will meet some of the challenges.
Tim Farron (Westmorland and Lonsdale) (LD)
The hon. Member is making an excellent speech, as always. Given that there is some underlying positivity, is she concerned that although there is ongoing support for people with their energy bills, there is nothing for the tens of thousands of people in Cumbria, and the hundreds of thousands across the country, who are off grid and who rely on heating oil? Does she think that the Chancellor had room for a formal cap on energy bills for people who are off grid, whose bills have gone up threefold in the last year?
Dame Meg Hillier
The hon. Gentleman is a good campaigner for his constituency and raises these issues repeatedly, but there has been some support from the Government on that issue. The Treasury Committee will be poring through the detail of what the Chancellor has announced today, so he may take my plaudits today, but we will go through that detail to see how much this delivers cumulatively for a household, which I know is the mission of the Chancellor and the Prime Minister. On that point, we will wait for the detail, but there is a limited pot of money, and it must be targeted at those who need it most, notwithstanding the challenges the hon. Gentleman’s constituency faces. There are choices to be made.
Chris Vince (Harlow) (Lab/Co-op)
The House will be determined to know how this Budget is going to benefit Harlow. Does my hon. Friend agree that the £100 direct payment into the bank accounts of Harlow residents will make a huge difference this winter? By the way, it will help over 39,000 households in council tax bands A to D.
Madam Deputy Speaker
I am surprised that the hon. Member failed to get the Chancellor to use the word “Harlow” multiple times during the Budget statement.
Dame Meg Hillier
I thank my hon. Friend the Member for Harlow (Chris Vince)—I say that just to up his constituency’s mention count. Around 48,000 households in my constituency households will benefit from the council tax rebate for those in bands A to D. I am assuming the Government took this approach because it is a simple way of getting the money into people’s pockets, but how that works will need a lot of unpicking. It is an instructive figure, in fact, because people think that London’s streets are paved with gold, but one in two children in my constituency are living in poverty, it is among the top three for the pensioners deprivation index, and it has a very high level of deprivation overall, while there are also challenges with the cost of living.
Richard Tice (Boston and Skegness) (Reform)
The hon. Lady may not have read the Budget Red Book, but GDP growth is forecast to reduce from 1.6% back in March to just 1% in 2027, and indeed GDP per capita is also forecast to reduce from 1.3% to 0.9%, so the numbers in the forecasts are actually getting worse, not better.
Dame Meg Hillier
As the hon. Gentleman rightly highlights, I have not had time in the moments since the Chancellor sat down to go through every graph in the Red Book or, indeed, the OBR’s forecast. Obviously, the Chancellor laid out the figures very clearly at the Dispatch Box, and we will be raising these issues in the Committee. It is easy to pick one measure that has gone down, but sometimes the figure will go up in a later year, and despite the headwinds, there is some room for optimism.
Let me let me be very clear—I think the Chancellor would expect me to say nothing less, as Chair of not only the Treasury Committee, but the Liaison Committee—that Chairs of Select Committees see our role as robust scrutineers of the work of the Government of the day, whichever party is in power and whichever party we are from, as a core part of what we do. There will be nowhere for the Chancellor to hide when he comes before us on 11 November, but I am sure he is robust enough to be prepared and to take on all comers.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
The trend started by my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) when he was Chancellor of providing £3.5 billion to spend on AI and digital in order to make all Departments, but particularly the national health service, more efficient, was sadly lacking from this Budget. As Chair of the Treasury Committee, could she suggest how Government spending on digital and AI might improve Government productivity?
Dame Meg Hillier
The hon. Gentleman raises quite a detailed point, but we know that AI can add about 0.2% to productivity in the economy overall. I do not have direct figures for the NHS, but my sister Committee—the Health and Social Care Committee, ably led by the hon. Member for Oxford West and Abingdon (Layla Moran)—will no doubt be looking at these issues. As he knows, the Committee corridor is examining the power of AI, covering both the costs and the opportunities, and I am sure the House will continue to discuss the opportunity to improve productivity in various guises and to scrutinise the Government very robustly on that.
What is interesting about the Budget is that some of its measures are for today, but it is clearly rooted in longer-term reforms, which I welcome, because we need to be thinking about the long term. One of those measures is devolution, and I am a firm believer that power should be devolved to the most appropriate level. In fact, when I was a baby councillor with the now chief of staff to the Prime Minister back in 1994, he and I were both responsible for devolving powers to areas within pram-pushing distance. I should say for younger Members that this was before the days of the internet, which perhaps dates me too much. Giving people a say over spending in their own local area can be a really powerful way of engaging people with the decisions that are made—not seeing politics as something distant and remote, but very much part of their communities.
Dame Meg Hillier
I have given way several times, and a lot of Members are waiting to speak.
Whitehall is often just too distant—not just physically and geographically, but in attitude—from communities and towns up and down the country. I always say that we should not make decisions about people without people. However good our civil service is—and I pay great tribute to the many civil servants I have quizzed over the years about public spending—there will still be a challenge if we do not have the right people around the table, and that may be because they just do not know what is going on in a geographical area.
Our mayors have a very important role, but if money is to be devolved to them, there needs to be very strong local accountability. Of course, the last Government abolished the Audit Commission, which I think is a great sadness, and we have seen huge challenges in local government audit. The Mayor of London has the strongest accountability, with 25 London Assembly members able to challenge him openly and regularly about his spending, and powers to delve into the detail, but mayors in other areas do not have that.
I would say to the Government and the mayors that there is very good reason to have very strong accountability. First, a mayor will want to prove to their constituents that they have spent money effectively, and to be transparent about that, so that when they come up for re-election, people know that their mayors are not frittering away their hard-earned tax pounds and that they are delivering the things they want. Secondly, if a mayor spends money well in their area, they might prove to the Government that they can get more bang for the taxpayer pound than Whitehall achieves by doing it from a distance. Dare I say it, but there may even be times when the Government of the day do not give quite enough money to deliver what was promised, and mayors need the figures to prove that they have been short-changed. In all those circumstances, we need a stronger accountability process, and I hope that we do not go so fast in the drive towards devolution that we do not have those checks and balances in place.
I am very pleased about the moves on cheaper energy and clean power. The Chancellor mentioned GB Grid, which is a start, but about 400 projects are needed to upgrade the grid, and I believe that GB Grid covers 10 or 11 of them, so there is still a huge challenge to get the grid up to speed to meet the target of net zero by 2050. I think the pledge to buy and build only when new technologies will lower bills and be connected to the grid may be an important driver in that area. We may want to quiz the Chancellor about that—as, I am sure, our sister Committee, the Energy Security and Net Zero Committee, will want to do with the relevant Ministers in due course. I welcome the energy cost reductions for businesses, because I think all Members across the Chamber have heard that businesses have been really struggling in that regard. I have also been pushing for the closure of the loophole on VAT for online marketplace sales, so I am pleased to see that.
On the face of it, this Budget looks as though it has done a good job, but the devil is of course in the detail, so I again put the Chancellor on warning that we will be looking through that detail over the next few weeks. We have the Office for Budget Responsibility before the Treasury Committee next week, alongside other economists, and we will have the Chancellor himself on 11 November, when we will have had a chance to go through all the figures in detail and can challenge him on what he has promised today and the promises for the future.
Overall, I think we must see cross-party support for the approach to support households in these challenging international times, when a lot of the things that buffet the Government are very difficult for them to control. We must support small businesses. Quite rightly, we all are lobbied a lot by our small businesses. People invest their energy in their businesses, and they need support. We need a long-term vision. Part of our challenge as scrutineers of the Government on the Committee corridor is to hold them to account for their 10-year plan—which we have yet to see—for reshaping the state and devolution. I again warn all Ministers sitting on the Front Bench that the Budget may feel good after the statement today, but we will be challenging them in detail about the money they are spending, whichever Committee they appear before.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the leader of the Liberal Democrats.
Ed Davey (Kingston and Surbiton) (LD)
It is always a pleasure to follow the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier). I am glad she committed to looking at the devil in the detail of this Budget, because when one looks at the fine print there are quite a few things for her Committee to scrutinise. In particular, I hope that she will look at the very disappointing growth forecasts, because I think this Budget will be defined more by Labour’s red lines on Europe and the Conservatives’ Brexit red tape than by faster growth.
At the root of so much of what has gone wrong in our country—the cost of living crisis, higher taxes, broken public services, empty high streets, and the lack of jobs and opportunity—is the lack of economic growth. Our economy is being held back. British business is being held back. It is being held back above all by the terrible damage of the Conservatives’ Brexit deal: a deal, let us never forget, that was backed by the leader of Reform and voted for by Labour—a deal that put up pointless new barriers to trade, tied up British firms in extra costs and red tape, and pushed up prices on our supermarket shelves.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Will the right hon. Gentleman give way?
Madam Deputy Speaker
Order. As I said earlier in my introductory remarks, Sir Bernard, we do not intervene on Front-Bench speeches. The odd thing is that we went through this scenario this time last year. [Interruption.] We did, we did—yet here we are again.
Ed Davey
Thank you, Madam Deputy Speaker. I am always happy to talk to the hon. Gentleman in the Tea Room.
As I was saying, our economy is being held back by Brexit, so the biggest single thing the Government could do to fix our economy is to fix our trading relationship with Europe and take us back into the single market and a customs union, giving us the growth and the money to cut people’s taxes. [Interruption.]
Madam Deputy Speaker
Order. Mr Gareth Snell, moving three rows back does not mean I cannot see you or hear you. Let us try to simmer down.
Ed Davey
Thank you, Madam Deputy Speaker.
Unless and until a Government have the courage to do just what I have outlined, I am afraid that any Budget will only be tinkering around the edges, because it will not provide the growth our country so desperately needs.
The Prime Minister, to be fair, has rightly talked about the economic damage caused by Brexit, but in answer to my questions he still refuses to drop Labour’s red lines set down by Keir Starmer more than five years ago. The world has changed so much since then and it is long past time that Labour policy changed with the world. I welcome the Prime Minister talking more openly this week about the need to move forward on Europe, but can I say to the Chancellor and the Prime Minister that it is just too urgent to wait until the next Parliament? Today’s Budget shows why.
I remember when 2% growth was nothing special. When we were in government that was the average, but since we left the EU, it has been less than half that—less than 1% growth a year. Today’s forecasts show things starting slowly to move in the right direction, but they still show growth well below 2% every year for the next five years. What used to be average growth now feels like a pipe dream, so we need a real growth plan with Europe at its heart: a plan that only our party has set out—an economic plan to make Britain richer, safer and stronger.
Our plan would also tackle one of the great hidden tax injustices not just of this Budget, but of every Conservative and Labour Budget since 2021: frozen income tax thresholds. They are a stealth tax rise that has dragged millions of the lowest paid into paying income tax and millions of ordinary people—nurses, teachers, police officers—into the higher 40p tax band. Millions are paying higher taxes for the cost of Government economic failure. I have to say to the Chancellor that this Budget, which freezes the income tax allowance of people in work while raising the personal allowance for some pensioners, is not the answer. Income tax thresholds should rise for everyone—the fairest tax cut possible—letting people keep more of what they earn, rewarding hard work and giving individuals more power in our economy. That is a profoundly Liberal thing to do. If we grow the economy by trading more with Europe, we can afford to do that—a real plan to turn the economy around and cut taxes fairly.
Our plan would also tackle one of the biggest headaches the Chancellor is facing in this Budget: the cost of Government borrowing. We clearly cannot go on spending £1 in every £12 just on interest payments on the national debt. That is money that should be going on schools, on hospitals, or back into people’s pockets. We just cannot go on with the Government borrowing money at interest rates of over 5%. Some of the cost is down to global factors, as the Chancellor talked about, and a lot of it is down to Donald Trump’s war with Iran, but there is no doubt that the bond markets would look more favourably on the UK if our growth prospects were better. Just as for growing the economy, the single biggest thing the Government could do to cut their own borrowing costs, and the interest rates faced by homeowners and businesses, would be to take up our growth plan, and join the single market and customs union.
Just look at the alternative put forward by the terrible twins of British politics, the Conservatives and Reform. They are in a bidding war of unfunded fantasy promises. We have seen where that sort of fiscal irresponsibility ends; Liz Truss’s mini-Budget sent mortgage rates rising. Yet now we face the threat of a Tory-Reform Government doing it all over again. The British people simply cannot afford that.
That brings me back to the cost of living. Why are so many bills going up again? Because Donald Trump chose to start his idiotic war with Iran, which has pushed up our energy bills and hiked diesel and petrol prices to painful levels. When that war began, the Conservatives and Reform were lining up to say that Britain should be backing President Trump. Just imagine if they had been in charge. We would have been dragged into fighting a war that no one wants and paying for it with even higher bills and higher taxes. Britain needs a Government who stand up for British interests, not one who make us ever more dependent on an unreliable, out-of-control American President.
With Donald Trump pushing up petrol and diesel prices, the Chancellor’s freeze on fuel duty is welcome, but it is not enough. I urge him to look again at our emergency transport package, which would cut prices at the pumps by 12p a litre and bring down the cost of travel by bus, train and electric vehicle, too—a real breathing space for families and businesses. With energy bills forecast to rise by more than 25% in January, the Chancellor’s promise to break the link between gas prices and electricity bills cannot come soon enough, but he is right to reject the siren song from those on the Conservative and Reform Benches who want Britain to be even more dependent on dirty fossil fuels and their volatile prices. Once again, they are copying Donald Trump, and their energy plan would be a disaster for our environment, our economy and for everyone struggling with the cost of living. The right answer is to invest instead in clean home-grown renewable power, energy efficiency and battery storage, so that the prices we pay do not depend on Trump’s latest Truth Social post, but instead come down quickly as technology continues to slash the cost of renewable energy and of batteries.
In a world where Trump is deserting Ukraine, praising Putin and selling out on European security, we must move far more quickly on defence. When the Defence Secretary says we must be ready for war within 1,000 days, our armed forces cannot wait years for the investment they desperately need now. The Chancellor’s announcement of some extra funding is welcome as far as it goes, but why has he not taken up our plan for defence bonds to invest £20 billion in Britain’s defence over the next two years? And since he has ruled out joining Canada’s defence bank, will he now take up our plan and push for a European rearmament bank that goes so much further than what he announced today? Instead of signing up to one country’s version, surely the right answer is to bring our allies together behind a shared vision of defence investment to protect our continent from Putin.
The defence of our country needs serious answers like these, not fantasy pledges like the Conservatives’ “iron dome”, which they say is not an iron dome—except when it is. What a shambles! No wonder they left Britain’s armed forces in such a mess, something for which they have not yet apologised.
It will not surprise the House to hear that we on the Liberal Democrat Benches are delighted to hear talk of fiscal devolution. Taking money and power out of a few hands in Whitehall and giving it to communities to make their own decisions is something that we, as Liberals, have always championed. There is a right way to do devolution and a wrong way, so we will have three tests for the Government’s plan as it develops. First, does it give councils enough money to fulfil the responsibilities they are being given? Secondly, does it reach beyond mayors to councils and communities everywhere? Thirdly, is it fair, so that those areas that are already struggling do not find themselves with even less? Done properly, this could be the start of something really big; done badly, it is simply passing the buck.
The same goes for welfare reform. Of course it needs to be done, but it needs to be done right: cutting the bill by helping people into work and giving people the care and support they need so that they can work, like fixing carer’s allowance to help people juggle care with work. I am glad that the Chancellor has listened to carers on the need to scrap the unfair cliff edge of carer’s allowance. As I said to the Prime Minister earlier, this cannot wait another four years, and we cannot see a 100% tax rate on working carers. I urge the Chancellor and the Prime Minister to look at our alternative plan instead, which we put forward to Liz Sayce when she did her review. I hope to bring it to the meeting that the Prime Minister has promised.
Whether on carer’s allowance or other benefits, let us reform welfare right, so that the system helps people into work and then rewards them for working. The country needs this new Chancellor and Prime Minister to succeed, because the livelihoods of everyone in our country are at stake. The Liberal Democrats will work constructively with the Government wherever we can. We will oppose them when they get things wrong, of course, but we will also support them when they get things right and push them to go further when they are too timid.
In that spirit, I say to the Chancellor that this Budget is far too timid. The Government have recognised the scale of the challenge, but like Keir Starmer before them, they still have not risen to it. They have not fixed the terrible damage that they did with their tax rises, from the family farm tax to the jobs tax. I urge them to be bolder—be bolder on energy and defence; be bolder on devolution, and get it right; be bolder on cutting income tax; and be bolder on Europe and growth—because after so many years of pain, so many years of being held back, the British people need real change, and fast.
Daniel Zeichner (Cambridge) (Lab)
It is always a pleasure to follow the right hon. Gentleman, although I am not sure that the Liberal Democrats are always quite so bold when it comes to local decision making.
It is a pleasure to support the measures announced by my right hon. Friend the Chancellor. I have known him for many years, and he certainly knows Cambridge well. The measures on rough sleeping will be strongly supported in the city of Cambridge. They are the right thing to do, because they also help tackle a problem that I have talked about before, which I described as the pauperisation of the public realm. Over the last few decades, too many of our city centres and towns have not had the investment and care that they needed. That goes some way towards explaining how we can be a country that, by international and historical standards, is well off, yet has a general sense of unhappiness.
The fragmentation and privatisation of public services and spaces, widely attributed to decisions made in the 1980s, have come back to haunt us. I was pleased to hear the suggestions in the Chancellor’s speech, echoing the comments made by the Prime Minister over the last few months, that address those points.
David Davis (Goole and Pocklington) (Con)
I am interested in what the hon. Gentleman says—I have been a critic of some privatisation myself—but it does not explain why those same malaises did not apply during the Blair years.
Daniel Zeichner
As I said, I think it goes back over decades, and it needs to be reversed. I thought the most radical measure in the Chancellor’s statement was the fiscal devolution. I am someone who, along with many others in the Chamber, has argued for business rates retention over many years. I look forward to seeing how that plays out.
I represent a young city, and I am confident and optimistic about the future if we can give our young people the opportunities they need. I was pleased to hear about the measures to support innovation and entrepreneurs. At the Innovate Cambridge summit last week, we were told by local people that as an innovation cluster by density, Cambridge ranked second in the world and first in Europe in 2026. Just a few months earlier, the Oxford-Cambridge Supercluster Board published research showing that the growth corridor has produced 740 university spin-outs—almost 70% more than the fabled Bay area in America—and produces more scientific publications per resident than anywhere else in the world.
As we know, all too often we manage to generate tremendous start-ups, but have a problem with scale up. The points in the statement about the National Wealth Fund and the British Business Bank can help us use the Oxford-Cambridge growth corridor to drive prosperity for the whole nation, not just the region. I welcome the announcement of the flexibility that will be offered to the Greater Cambridge Development Corporation, which will allow us to be innovative in the way we use public funds to also pull in private funds.
I welcome the optimism and confidence that the Budget brings, but I add one word of caution. The success and strength of cities such as Cambridge, and of the Oxford-Cambridge growth corridor, is based on the strength of our universities. Colleagues will know that universities are facing acute financial pressures, made more difficult by some of the measures that are being taken to address international students. The changing attitude of UK Visas and Immigration on visa applications is increasing the pressure, while the introduction of the international student levy will increase the financial pressure.
I strongly urge my colleagues on the Front Bench to talk to Universities UK and look at alternative ways to fund maintenance grants. I understand and appreciate that there are long-term structural issues, but it is dangerous to allow universities to get so close to the financial brink, and it potentially undermines the success of the Ox-Cam corridor and cities like Cambridge. We should be optimistic about our future. That we have the talent to succeed is based partly on the fact that we attract talent from across the world. We need to remain competitive internationally.
Innovation and knowledge are things that we are good at in this country. They should be celebrated, and there are measures in the Budget that will be strongly welcomed by innovators, but we need to ensure that they are not undermined unintentionally as the Government seek to address other issues.
Sir Mel Stride (Central Devon) (Con)
The Budget was a whirl of little things. I picked up a road map, a taskforce, a few bob scattered around various organisations, and even a few pence off a jar of gherkins. But it is a missed opportunity. It smacks of managerial incrementalism, rather than the bold and radical reforms that our economy needs if it is to meet the challenges of the future. Those challenges include intergenerational unfairness, an ageing population and—heavens above—the menace presented by Vladimir Putin.
The Budget is based on the somewhat smug false premise that somehow the economy is going broadly in the right direction. It is not. The Chancellor prayed in aid the comments of the IMF on near-term growth and fiscal consolidation. However, the reality is that that should not be the benchmark. We should not be looking at France, which has had so much civil, economic and political unrest that it is heading towards a potential bond crisis. We should be asking a fundamental question: what level of growth does the economy need to address the challenges that I have just set out? The answer is that we need to at least get back to the growth trends that we had before the global financial crisis—at least 2% to 3% per year. We are a very long way from that.
The Chancellor lauded the fact that growth has been revised up for this year; he neglected to mention that from next year the position is very different indeed. He made no attempt to acknowledge the mistakes that this Government have made since they came to office. Huge mistakes by his predecessor, such as massive tax increases predominantly on businesses, have had the effect of lowering investment, raising unemployment, reducing output, and—because taxes are often passed on in higher prices—pushing up the rate of inflation.
We are now in a position where, if my reading of the OBR document is correct, due to the inflationary effect that this Government have in part induced, fiscal drag alone will result in more than 200,000 average days’ work being destroyed. We are left with almost the highest level of unemployment in five years, high and sticky inflation, high interest rates, massive servicing costs on our national debt and huge levels of borrowing.
In its document, the OBR sets out what is happening to real household disposable income across the forecast. If my reading is correct, it is lower now across every year within this set of forecasts than in the forecasts back in March. In other words, hard-working people up and down the country are getting poorer as a direct result of the actions taken by this Government.
Graham Stuart
I received a card from the Joseph Rowntree Foundation yesterday—I do not know whether my right hon. Friend also received one—suggesting that every family in Beverley and Holderness will be at least £440 a year worse off at the end of this Parliament. But today, on top of the points that he has already made, we are going to see not only disposable income being constrained, but debt going up in each of the next five years by more than was previously suggested.
Sir Mel Stride
My right hon. Friend is absolutely right.
That brings me to another point, which is that the Chancellor has taken a conscious decision to reduce the headroom, in the primary target, from around £24 billion to £15 billion. That is a mistake. If he had taken the radical measures necessary to get on top of public spending, particularly the welfare bill, he could have increased the headroom. He talks about the risks ahead—that is the very reason why we have the buffer of that headroom. If we have low headroom, we end up paying a premium on the debt servicing costs to which my right hon. Friend just referred.
The average headroom that Chancellors have come forward with since the instigation of the OBR runs at about 1.4% of GDP. In today’s terms, that would be about £40 billion of headroom. We are now down to £15 billion. Members across the House should therefore not be surprised if the Chancellor comes back at a future date and tells us, just as was the case with his predecessor, that the headroom has entirely evaporated, once again, because of reasons beyond his control. This is a mañana Budget. This is a Budget kicks the can down the road.
When the Chancellor resigned as Secretary of State for Defence, he made it very clear that his resignation from Government was nothing to do with the defenestration of the previous Prime Minister, and was instead a matter of principle: he did not believe that our country was going to be adequately protected as a result of not coming up with the money to fund the 3% of GDP on defence by 2030. He now has his hands on the levers, and he has failed to do even that on this occasion.
Alex Ballinger (Halesowen) (Lab)
The right hon. Gentleman will remember that, in his statement, the Chancellor he did commit to reaching 3% of GDP by 2030. Can the right hon. Gentleman say when the Conservatives reached 2.7% of GDP on defence?
Sir Mel Stride
We will have to look very closely at the wording that the Chancellor used, because my recollection is that he said that the Government would be committed to the NATO target of 3.5% by 2035, with a target to reach 3% by the end of 2030. The word “target” is not the same as the word “commitment” when it comes to reaching that particular figure. I recommend that the hon. Gentleman looks closely at that.
When it comes to this Chancellor and his principles, I am reminded of the late Groucho Marx, who said,
“Those are my principles, and if you don’t like them…well, I have others.”
It seems to me that that is where we are on this particular matter.
The Leader of the Opposition was perfectly correct in identifying the unrealistic expectations and assumptions contained within the numbers the OBR has had to work with. While the OBR sets out its assessment of what various interventions will mean for growth, inflation and so on, it has to take at face value the spending envelope that the Government come forward with, which was inherited from the Chancellor’s predecessor. As we know, that spending envelope sees a very strong squeeze in spending right at the end of the forecast period. In fact, if health spending increases in the spending review next year by 2.7% in real terms, as it did in the last review, and the 3% defence target is met, there will be a black hole of £20 billion in the figures that the Chancellor has just presented.
We have seen the march of the PuFins—public financial institutions—in the Budget measures that have just been announced. We have seen £20.4 billion placed in the National Wealth Fund. Make no mistake: it should be clearly understood that this is additional borrowing. It does not matter whether it falls within the current definition of debt—the public sector net financial liabilities definition—and would have fallen outside the old definition of public sector net debt; the reality is that it is more money that this Government are borrowing.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
On the subject of a sovereign wealth fund, would the right hon. Gentleman comment on the fact that under the Tories we sold off our national treasures in North sea oil and gas? We should compare that with Norway, which put those assets into a sovereign wealth fund and now has £1.7 trillion available for public services, while we do not have anything. That was an absolutely catastrophic mistake for our country.
Sir Mel Stride
The hon. Gentleman should join us on the Conservative Benches, because we are the party that is standing four-square behind North sea oil and gas extraction. We do that for a very important economic reason.
It is right that the national minimum wage not going up by as much as it might otherwise have done will help business. The Leader of the Opposition welcomed that. We have also seen a lowering of business rates for some businesses. The mileage changes with HMRC will no doubt be slightly helpful, particularly for the self-employed.
However, the Chancellor also came forward with a reduction in the business asset disposal relief—he has halved it, making it less of an incentive for people to set up businesses. I looked at the figures in the Red Book, and it seems that there are £5 billion-worth of additional taxes on businesses across this forecast—an increase of £2 billion in additional taxes across inward investment into our economy.
In conclusion, the lights are flashing on the UK economy. We have huge challenges ahead, and it is not good enough simply to rely on saying that we can be steady as we go.
George Freeman (Mid Norfolk) (Con)
Like me, my right hon. Friend represents a very rural constituency. Was he shocked to hear the lack of any relief for rural areas, which are being hammered by disproportionately high energy costs? The Treasury’s own figures show that the risk of fuel poverty in rural areas is 150% higher than in cities. We heard about money for cities, but nothing for our rural areas and rural businesses, which are being hammered, and where we are seeing stagflation and inflation and taxes and interest rates going up. There was nothing for rural areas.
Sir Mel Stride
Absolutely. My hon. Friend is absolutely right. The absence of anything about farmers in the statement was palpable. One might think that the Chancellor might at least have said something about the farm tax, which is still hanging around the necks of our farmers up and down the country.
Noah Law (St Austell and Newquay) (Lab)
Will the right hon. Gentleman give way?
Sir Mel Stride
I am just concluding now.
When Members hear the Chancellor talking about being steady as we go, they should read into that complacency. When we hear him say that we need time to get things right, we should read into that kicking the can down the road. We face huge challenges as a country, and this Budget has been grossly complacent. It is a lost opportunity. It has failed our economy, and it has failed the British people.
Peter Kyle (Hove and Portslade) (Lab)
I notice that you are wearing a Sussex tie today, Madam Deputy Speaker. It is good to be called to speak by somebody wearing a Sussex tie. I am sure that you will be breaking the internet for another year running as a result—you have done so before.
It is a pleasure to follow the right hon. Member for Central Devon (Sir Mel Stride), who was so recently forced to leave shadow Cabinet. There may well be another grouping of Members in the Chamber, alongside that of the Select Committee Chairs; it is very good to be able to speak today from the Back Benches.
The Chancellor’s Budget statement has made real, concrete progress in the areas of the economy that I care about the most and that have the most impact on the people who live and work around our country, including in my constituency. I was very animated by the areas of the speech that focused on growth and innovation, and those are what I will focus my contribution on today. The trading allowance, the entrepreneurship allowance, doubling funding for the British Business Bank, the entrepreneurship scheme for women, and, crucially, the founders’ relief are all measures that we should be extremely grateful for. They will have a direct impact on the growth of our economy, keep innovation here and allow it to scale here.
Founders are quite unique people. They are able to commercialise innovation and tell stories about their products, and they act with such confidence that their charisma carries a lot of weight, which sometimes belies the amount of risk they take on and their hard work and determination on behalf of their company, their employees and our economy as a whole. The relief that has been offered to them is hard-earned.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
I think I am right in saying that the right hon. Gentleman’s constituency, like mine, relies very heavily on the tourist trade. That industry is on its knees gasping for air. It does not need breathing space; it needs help. There was nothing in the Budget for that industry.
Peter Kyle
I am always grateful to hear from the right hon. Gentleman, whose constituency is in the region that I also represent. He may not have heard amid the noise in the Chamber at the time, but the south-east benefited quite considerably. In our part of the country, 47% of businesses in the retail, hospitality and leisure sectors will no longer pay any business rates at all.
Mike Wood (Kingswinford and South Staffordshire) (Con)
Will the right hon. Gentleman give way?
Peter Kyle
I will make some progress, because lots of Members want to speak, and I have not even got on to the main argument that I want to make.
There are real benefits from this Budget. In my constituency, the council tax rebate will impact positively on 42,000 homes. The same will be true in the constituency of the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale) and in others around the country.
The Chancellor also mentioned directly the defence dual use investment for companies doing dual-use innovations. When he was Defence Secretary and I was Secretary of State at the Department for Science, Innovation and Technology, we worked together, and it was the first time that the Secretaries of State of those two Departments came together to work on the strategic challenges and opportunities faced in the defence industry. I am really pleased that we now have a Chancellor investing in dual use. It will be based on the conversations and workstreams that we set up when we were those two Secretaries of State. Those two roles should work together going forward.
When Labour came to office in 2024, we inherited a growth emergency. Now we have taken solid steps forward, but we must still have the mindset that we are facing a growth emergency. It is my belief that we are on a motorway heading in the right direction but even now are only travelling at 30 mph.
I believe that the challenge we face is a complacency that was set down in previous times, when we took growth for granted. From the 1997 Government onwards, for a decade before the financial crash, I think it is fair to say that we felt that growth was dependable—that there was a sense of inevitability about growth. We could focus on all the social issues we wanted to tackle based on the proceeds of that growth, but we did not pay enough attention to underpinning growth and making sure that it was sustainable into the very long term.
Graham Stuart
I agree with every word that the right hon. Gentleman just said about the need to focus on growth. The question is: how do we get it? It seems that too many on the Labour Benches believe that it is by Government intervention rather than reducing the taxes that create disincentives for business. Is he as alarmed as I am at the more than £2.2 billion increase in taxes on business today—from writing down allowances to company distributions and business asset disposal relief, as well as the probable more than £6 billion reduction in lending that will result from the £1.5 billion bank tax?
Peter Kyle
The right hon. Gentleman’s intervention was longer than my speech has been so far. When I find that I agree with every word that somebody is saying, I usually sit down and listen to a bit more of it rather than trying to challenge it. Perhaps the rest of my speech will answer the questions that he raises.
In that decade, because of the predictability and certainty of growth, I think that growth policy was seen like any other policy. In other words, if there was a shelf with all the different policies of Government on it, growth would be one set of policies on that shelf. I know that there are a lot of analogies going around these days, and Liz Truss has blown a hole in analogy use as well as in our economy, but it is my belief that we now need to have the mindset that growth is the shelf itself. We cannot have successful social policies delivered in the way that all of us in this Chamber would like unless we have a solid, predictably-growing economy into the long term that provides security and prosperity and from which we can share investment fairly around the country.
We must on both sides of the House be as animated about economic growth as we are about creating prosperity, spending it and challenging the social ills in our society. We must care as much about economic growth as we do about rough sleeping, social care and international development—I say that as someone who spent my early life in international development. Tackling those issues depends on economic growth itself.
Public services are incredibly important. They are enablers of growth. We cannot have growth if people are arriving late to work, are too sick to work or are stuck on a Tory waiting list for treatment. We need to have the right skills in the right places. All of those things are absolutely essential, but we should not kid ourselves that such growth is not built on by private enterprise.
Thanks to the Prime Minister deciding that I could have some time over the summer, I was able to write an essay—now that Tony Blair has brought them back into fashion. I know that many Members will have already read it, making some of my words today obsolete, but let me refresh their minds about what I focused on. I confined the essay to my experience in Government and how we can configure Government more assiduously and dependably to unlock the economic growth that our country needs so much—focusing on what Government themselves can deliver. That experience comes from leading two Departments as Secretary of State. I saw in both those Departments that civil servants can deliver boldly when they have the authority to and when incentives align.
I will use one example—the automotive sector—to illustrate to Members the challenges that the Government face to unlock growth. Delivering support for the automotive sector means aligning energy, trade, regulation and all these different areas of policy. All are held by more than one Government Department, and each of those Departments has its own priorities. As Secretary of State in the Department for Business and Trade, at times I was prioritising the automotive sector and recognising how important it can be for growth. Let us bear in mind, when Jaguar Land Rover suffered its cyber-attack, 0.2% was taken off our GDP. When it was up and running six weeks later, 0.2% was returned to our GDP. The importance of industry is still fundamental. When the Prime Minister and the Chancellor talk about reindustrialisation, hon. Members should not underestimate its ability to deliver growth for our overall economy.
We have another asset when it comes to the automotive sector in our country. When we talk about frontier technology—I am looking for the Minister for Artificial Intelligence, who was in his place a moment ago—we think about the AI labs, most of which are in California, with some in China, but we have a frontier industry here in the UK in the automotive sector, and it is Formula 1, because 11 of the 12 teams do all their research and development and all the deployment of their vehicles right here in the UK. No other country in the world has that asset, and that filters skills through our automotive sector. The ability to grow that sector is huge, but that needs Government to work in an aligned way.
I discovered how different Departments with different priorities have oversight over things like automotive, and how sometimes they can slow down those priority areas. We need the structures and incentives in Government to be much better aligned, because we cannot have all these important sectors depending on Ministers’ ability to WhatsApp each other to sort out problems. We should have a system of Government that is already on the side of making pro-growth choices.
I want to say a few brief words about defence, which has already been raised in the debate. I am grateful to the Chancellor for the statements he has made on this. We focus on the percentage of GDP allocated to defence, but the debate cannot just be about how big a share of our economy we spend on defence; it must also be about how big an economy we have. If we were to achieve five years of 3% annual growth, 3% of our national income on defence would deliver almost the same amount of money as moving to 3.5% in an economy of today’s size.
Stuart Anderson (South Shropshire) (Con)
Will the right hon. Gentleman give way?
Peter Kyle
I will continue.
That is the difference that growth can make to our national security: it does not remove the need for difficult spending decisions today, but it can give us greater strength to sustain our defence into tomorrow.
Stuart Anderson
I agree with the right hon. Member that it would be great to grow the economy to achieve the 3.5% spend, but the Chancellor has today set out multibillion pound in-year cuts this year—we see that in particular in the resource departmental expenditure limit budget at about 0.5% next year—so as it stands there will be far less for training and operations. That is before we even look at whether, in three-plus years’ time, the Chancellor has achieved that growth or not.
Peter Kyle
I agree. I realise that in seeking to make an intervention we stop listening to what is being said, but I did say before I gave way to the hon. Member that that would not be instead. I am not proposing that we look to start investing five years down the line after five years of 3% growth—of course, we must move towards those NATO targets, just as the Prime Minister and the Chancellor have promised—but if the debate is about getting cash into defence, this illustrates how there is more than one way of doing that. Immediately, yes, it is about increasing the percentage, but in the long term, on the back of economic growth of 3% and above, we could do so sustainably, and that would unleash enormous amounts of resource in addition to the reprioritisation that might need to happen.
Of course, the difference is that when the spending comes from growth, other Government Departments’ budgets can grow as well, and working people right across the country will be feeling it in their pockets. That is why growth is one of the driving social justice issues of our time.
It is my belief that government needs to become organised around growth, and that growth needs to become the organising principle of government. In the essay that I published, I give some practical suggestions based on my time in government for what I would do if I had the opportunity.
First, the Government need to adopt a taskforce mentality when it comes to growth. The Prime Minister should back a 90-day plan to unblock investment. Of course, we need Cabinet accountability, but we have these great boards in government—experts on the Board of Trade and non-executives on Departments’ boards—and all sorts of different specialist groups and outside experts coming in and sitting on boards across Government. We should pick from those boards those people who are best placed because of their understanding of Government from the work they are already doing, and jump to a taskforce-based approach to looking at different Government Departments and the opportunities we have to act fast in Departments. They should identify areas that need legislative change, and for that we can introduce a growth Bill, if that were appropriate. I believe that it is.
Peter Kyle
Well, we should certainly legislate to remove the barriers to growth, because some barriers require legislation. Let me illustrate that with one point.
When I was Secretary of State, I visited a fantastic company called Ocean Infinity down in Southampton, which is building and deploying globally—it is a global leader—autonomous marine vehicles. I was taken to see one of its vehicles, which was 36 metres long, being built. These are huge investments, with these vehicles doing extraordinary work autonomously for marine biology and drilling, going to remote marine places on Earth. I was taken one deck below on an autonomous vehicle and shown one room. I was asked, “What do you notice in there?” There was a washing machine and a tumble dryer—in an autonomous boat. Why? Because the law requires any boat more than 34 metres long to have a washing machine and a tumble dryer for its crew.
Conservative Members may laugh at my suggestion of a growth Bill, but there are some things that need to change in the law to unlock the stupidity out there in how we regulate certain sectors simply because of the passage of time. I say to all hon. Members who worry deeply about deregulation or the modernisation of the regulatory landscape that there are absurdities out there that are holding businesses back. If we aggregate that one example of a tumble dryer and a washing machine across our economy, we can start to see the need for real positive action.
Mike Martin (Tunbridge Wells) (LD)
Would the right hon. Member back a national security exemption for regulations such as those he cited whereby, if what is being developed is clearly for our national security, health and safety and other regulations fall away to enable us to get that into the field quickly?
Peter Kyle
I am grateful for that constructive intervention. I am certainly in favour of looking at mechanisms for when we discover absurdities in the regulatory system. We know how long it takes to get legislation through the House or even introduced to the House as there are so many priorities, so we need to be able to act in the interim. We should look at that, and the House should give those powers where needed in such circumstances. Of course, national security is the No. 1 priority of any Government at any moment in time—it certainly should be.
Dr Andrew Murrison (South West Wiltshire) (Con)
Will the right hon. Member give way?
Peter Kyle
I will make some progress.
We also need a tax growth test, with outside experts reviewing all investment, hiring, innovation, revenue and incentives from HM Treasury and judging those against a growth test. That does not mean we would not still redistribute, invest and use tax in ways that are not always conducive to growth, but we do need to know in aggregate form exactly how the incentive landscape and the policy landscape in HMT align with the need for growth.
I am pleased that the Chancellor has made a lot of statements and some good progress on procurement. We should really be using that far more effectively to champion British innovation and support British scale-up companies. In procuring products and services, they have access to over £400 billion of spending, which eclipses investment we can make through Innovate UK, the British Business Bank, the National Wealth Fund or UK Research and Innovation.
I could not understand this as Secretary of State, and I still cannot when looking on. We went through a period, with my encouragement, of taking equity stakes in scale-up companies as part of our scale-up plan. There was all the due diligence that goes into making those decisions and which lead to the British Business Bank, through the independent and thorough work of its investment committee, taking an equity stake. Yet once that is done, there is no preferential access to any other part of Government. That should change.
The Regulatory Innovation Office should be upscaled and there should be local rewards for businesses that are growing fast. I have spoken—I will not speak in any more detail—about my frustration that this economy and the continent of Europe have never produced a $1 trillion company. Some of the wealth from those companies, when it is fairly distributed among their workforces and the communities in which they are sited, is an astonishing vehicle for levelling up. We need to ensure that we understand the reasons why our economy seems to have some kind of glass ceiling. It is a continental European challenge. Taiwan can produce a $1 trillion company that produces the wealth and power that goes alongside it, but there is nothing that Taiwan has that we do not have here in Britain.
Social justice and growth are intertwined. I started by saying that we are on a motorway going in the right direction, but at 30 mph. Fairly distributed growth delivers security, freedom and prosperity. If that is what the destination looks like, why would we not we put our foot down and try and get there faster?
Sir Jeremy Hunt (Godalming and Ash) (Con)
I refer hon. Members to my entry in the Register of Members’ Financial Interests. It is a great pleasure to follow the right hon. Member for Hove and Portslade (Peter Kyle), who was an excellent Business and Trade Secretary and a great loss to the Government when he stepped down. Like him, I have been writing about economic growth—he wrote an essay; I wrote a book. I have absolute confidence that all Members were poring over every word in my book over the summer. The book happens to be called “Can We Be Rich Again?”, in case anyone was interested.
I want to say, in a brief contribution, that doing a Budget since 2022 has become much harder because the invasion of Ukraine caused a spike in energy prices and inflation, which brought to an end over a decade of near-zero interest rates. In that context, rule No. 1 is not to upset the markets. Today they are calm and long may that last. Rule No. 2 is to do no harm. Frankly, after two Budgets that put up taxes, mainly on business, by £66 billion, many will be relieved that today it is “just” a £2 billion tax rise on businesses. I am worried, however, that the bank tax will lead to higher mortgage rates, which will make the cost of living worse for ordinary families.
My concern is about what I might call rule No. 3, which is never to waste a Budget. In the run-up to a Budget, the Chancellor of the Exchequer is, in some ways, the most powerful person in the country. They are sitting on top of the most powerful Government Department and they have the full support of No. 10 Downing Street, which needs Budgets to be successful. The OBR has just downgraded our growth next year to 1%, and there are still formidable impediments to getting back to that 2% to 3% growth that we all know is so important.
Today could have been the Budget that set out plans to get 1 million young people off welfare and into work. We could have found out how it is going to happen, when it is going to happen, where the money is going to come from, and what the impact will be on national accounts. Today could have been the Budget that showed how we are going to enshrine AI into every part of our economy, helping us to become the world’s next silicon valley—that would have been an extraordinarily powerful opportunity for us. There were some things mentioned about bringing down energy prices, but it could have been the Budget that showed how, over three years, we are going to get energy prices for businesses, factories and data centres down to levels in France, where they are 35% less, and it could have shown how that was going to happen. It could have been the Budget, with Ukraine about to go into the most difficult winter, that showed how we are going to get defence spending up to 3% of GDP and how that is going to help our technology sector and our economic growth in the process.
Instead, I fear the Chancellor and the Prime Minister have wasted their political capital by putting off difficult decisions. We are told that we will not hear what is going to happen with respect to those not in education, employment or training until the new year. We are not going to find out about defence spending and the spending review until the end of next year. That is a year away. The problem is that those decisions are going to be harder in a year’s time than they are today, and today could have been a Budget that did so much more.
The Prime Minister likes talking about hope. Young people are leaving school and university with high levels of debt and fewer available jobs—particularly far fewer graduate jobs—and they are worried about their future. They are losing hope. We had lots of so-called breathing space measures and they are welcome in their own right, but they will be forgotten within a matter of months. To really give people hope, we have to be prepared to take difficult decisions.
We need to be completely honest: reforming welfare is really difficult. It was difficult for the Conservatives and it is difficult for Labour—I understand that it is particularly difficult for a Labour party to reform welfare. Controlling public spending is difficult, as the former Chief Secretary to the Treasury, now the Economic Secretary, knows well, and it is very difficult for any Government to deal with the pressures on public spending. Dealing with the reforms that improve public sector productivity, bring down energy prices or sort out vocational education involve very difficult decisions, but today I feel none the wiser as to whether those difficult decisions are going to be taken. That is my worry.
In the end, people need to have a sense of a Government that are prepared to grasp the nettle on all those difficult things. I am afraid that it is not enough to say, “It’s okay because we are not the Tories.” We got a lot of things right, and I am proud of the fact that 4 million jobs were created under 14 years of Conservative rule—that is 800 jobs a day, by the way, compared with 200 fewer jobs a day since Labour came to office—but we also made mistakes. Looking forward, we know that there are lots of difficult decisions that need to be taken. Until we have a Government that are prepared to grasp the nettle on those decisions, our economy will continue to be buffeted by international storms instead of being master of its own destiny.
Bill Esterson (Sefton Central) (Lab)
It is a great pleasure to follow the right hon. Member for Godalming and Ash (Sir Jeremy Hunt). He gave a very thoughtful analysis—when he was not selling his book, but I am not going to accuse him of that being his primary reason. He mentioned breathing space. I do not think he was saying that it was not important to people, and he acknowledged that. The breathing space gives a direction of travel and, to answer some of what he was saying, that is the context for the Budget.
It was very much a Budget for energy and cutting bills. It was very much a Budget for tackling growth challenges and for showing how important growth is, as set out by my right hon. Friend the Member for Hove and Portslade (Peter Kyle), who has left his place. That is for a very good reason: we are in the middle of the second big energy shock in a few years. To the right hon. Member for Godalming and Ash’s concern about mortgage rates, I add my concerns about the impact of inflation if we do not tackle the costs of energy and the impact on prices more widely. That is true for consumers and it is true for businesses and the wider economy. Bringing down the cost of energy had to be a fundamental part of this Budget, and that is exactly what it was.
Progress has been made and will continue to be made. I note in the Red Book that gas now sets the price of electricity 60% of the time. Just two and a half years ago, that figure was 98%, so huge progress has been made. It is also the case that opportunities are available for people to switch to electricity. It is up to nine times cheaper to drive an electric vehicle compared with diesel, and not all of that is due to the exceptionally high prices that we have at the moment.
However, these things point in the same direction: that the energy transition is in our interest, through ending our dependence on the uncertainty, the danger and the threat that we face from having to import oil and gas. I know there are people who will claim later in this debate that it can all be got from the North sea, but it simply cannot. There would not be enough of it, even if we were to increase production. The announcement on Jackdaw is welcome. It will increase by a relatively small amount the amount of gas coming ashore to the UK to be used here, but it is a welcome amount. As well as the challenges around costs, there are huge challenges on how we move on from here, including challenges around how to build out the grid further. The Budget’s announcements mark the start of how to address the challenge, and I will come back to one or two of them later.
The Budget contained a range of measures on bills, and I think they are about more than breathing space. They include the VAT cut that was confirmed by the Chancellor today, and the council tax cut of £100, which will benefit 32,200 households in my constituency alone. We should be welcoming these proposals. The ending of standing charges for gas will help some of the people in the greatest fuel poverty around the country, and I welcome the announcement of something similar to come on electricity standing charges. It must be right that, at this time, in this scale of crisis, the priority is to help people with their energy bills and to use the bank surcharge for a year to do so.
It is also welcome to see no more policy costs on bills, and the announcement of a longer-term commitment there is very much in that vein, too. We heard earlier in the week about the use of loans in the warm homes plan to make it easier for people to take advantage of the technologies in moving to electrification. To the point about the reduction in the amount of time gas sets the price on the system, the increase in renewables on the system is, as the Red Book sets out, closing the gap between electricity and gas prices. It is crucial that it is made as attractive as possible for people to move to electricity, in transport and in home heat, and that is one of the things the warm homes plan will help with. The more people can take advantage of these things, the cheaper it will be for them and the greater will be the opportunities for industry.
The warm homes plan is a confidence builder for industry to invest in the installation of technologies such as solar, storage, heat pumps and other forms of electric heating and, potentially, hybrid heating. My Committee will be looking at that in our inquiry on the subject, which we are about to start. This builds on the £150 off from scrapping the energy company obligation scheme and the moving of the renewable obligation to the Exchequer, as well as the £50 million of help for homes that rely on heating oil for their heating.
On the subject of energy security, there are good commitments in the Red Book on the expansion of renewables, and also on nuclear. I welcome the statement on the need to review and reform the institutions—the National Energy System Operator, Ofgem—the way the Department operates and the uncertainty and confusion over where the networks fit into the picture. This is absolutely essential if we are to roll out the grid faster, to make the most of the opportunities in the new technologies, and indeed to move ahead with nuclear.
I note the recommitment in the Red Book to the application of the findings of the Fingleton review. This is something my Committee has called for, because we need to have certainty on the siting of the next large-scale nuclear power stations after Sizewell C and Hinkley Point C, and also on what comes next after Wylfa with SMR2. There will be good support from the British industrial competitiveness scheme, with 10,000 energy-intensive businesses benefiting. My Committee will also be asking about the cost control framework and the reforms to the market. We certainly need to know more about what they are. As has been pointed out, more detail is needed, and my Committee’s role will be to try to identify exactly what is going to come next.
There is a strong link between the new generation of electricity and cutting bills. There is also a commitment to continuing to break the link between the price of gas and the price of electricity, especially by fixing the price for new renewable projects, which will provide protection against volatile gas prices and the uncertainty that we all face now. I see this Budget as an important next step in the commitment on energy. I see energy as a fundamental part of the growth agenda, as well as recognising the importance of delivering energy security.
The Government have taken a pragmatic approach. We heard an intervention earlier about the energy wealth fund. It is a huge shame that the then Conservative Government did not set up a sovereign wealth fund in 1990 like Norway did, because had they done so, it would now be worth over £1 trillion to this country. However, we now have an energy wealth fund, and it is part of the economic opportunity of the 21st century. We have seen success in the latest auction rounds, commitments on nuclear, rapid progress on renewables and the warm homes plan. Alongside the announcements on procurement and more widely, these present an opportunity to support the economy and develop jobs and growth, as well as keeping down bills. This is a Budget for energy bills and for energy security, but it is also very much a Budget for growth through investment in energy.
John Glen (Salisbury) (Con)
It is a pleasure to be able to contribute so early in this debate. I speak as a former Treasury Minister in the previous Government who sat behind four Chancellors in different scenarios. I acknowledge the enormous challenge that every Chancellor faces in trying to reconcile so many competing pressures, but when I reflect on my experience of listening to this Budget, I am left with a great sense that it has been a Budget of missed opportunities. It has 98 measures where the value of each individual measure is at a record low. It is a Budget that has not taken the opportunity that is necessary for our economy.
All Governments face different circumstances. I was in the Treasury when covid occurred, and we had to make interventions on a scale that had never been seen before, and that obviously resulted in significant scarring to the economy. This Government face different challenges in terms of energy security as well as a fundamentally transformed context when it comes to national security risks. I was left feeling that, as Helen Miller of the IFS says, there has been a lack of a “coherent vision”. It is as if everything has been kicked further down the road. That leads me to conclude that we are warming up for a general election, which will be framed around the need for more taxes to reset the economy.
For a Chancellor to come in with a new Prime Minister and make 98 measures, all of which have a record low level of impact, speaks to a lack of ambition, while a position is held—on the back of £66 billion of tax rises—so that more can be done on the basis of whatever comes out of the summit with the EU next week. That is what I am anticipating. Of course, some of these small measures will be welcome, but when the effects of the tariff changes amount to 40p a week, for most people they will not be significant.
I want to look at some of the tax measures. The increase in tax on savings is not a good thing. That higher level of tax take will risk incentives within the system, constraining economic activity by more than expected. That is what people are saying about this Budget. There is the renter tax—it has been determined that measures in the Budget collectively risk leading to a steady rise in rents, building on the additional taxes of last year.
I take a close interest in financial services, having had some experience in that sector as the Minister. I note what the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), said about the rise in some share prices this morning. I think those services probably anticipated a larger increase in the surcharge, back up to 8%; the increase to 6%, therefore, and its time-limited nature, were reflected in a bump, as it was felt that that was not as bad as it could have been. However, looking at what UK Finance says about the implications of this change, I note that we need only a modest change—that is, if 7.4% of internationally mobile banking were to leave the UK—for the tax increase to generate zero net revenue. This is not some insignificant industry that is wholly located in London; it is an industry that provides the infrastructure for the wider economy. We will see the impact of that decision on interest and saving rates.
When I was the Minister in this area, I used to have conversations with the CEOs of global banks, and they pointed out the aggregate tax rate—looking at corporation tax, the surcharge, the levy and the national insurance rate—and then compared our situation with others internationally. Our aggregate rate is now going to look really bad, after what has already happened with the national insurance increases.
I want to reflect on what the Budget has not done for small businesses in my Salisbury constituency. I have been particularly impressed by one small businessman who I have got to know over the last few years, Ethan Davids. He is very young—in his early 30s—and has 15 hospitality venues, which are growing rapidly. He says to me that the combined effect of the increase on employer national insurance, the Employment Rights Act 2025 and the previously above-inflation increases in the national living wage, alongside the challenges of a reliable outcome from the planning process, actively discourages him from making investments. I fail to see anything in this Budget that has made a significant impact on the context in which his business operates and on the decisions he will make.
John Glen
Yes, a small measure like that will make some impact, but we need to look at the context—at what we have seen previously. As the hon. Gentleman will know, the manifesto he stood on two years ago implied a modest increase in taxes of about £7 billion, and we actually had increases of £66 billion. The scale of the burden placed on those businesses means they are disinclined to continue to invest.
I want to say a few words about defence. It is a massive part of the world in Wiltshire, including in south Wiltshire. Again, the context is changing, and it is doing so rapidly. The commitment given so far to raise defence expenditure is, of course, welcome, but in June the departing Defence Secretary was pretty explicit in insisting that a date be given by which 3% of GDP would be secured. A date has not been given today. I accept that there is a pathway to 3.5% and that a taskforce to get to 3% has been announced, but that is very different.
I think that we, in this country, are rather complacent about the nature of the risks we face. Just over two years ago, I visited the Nordics in one of my last months as a Minister. In Sweden and Norway, I was struck by the sense of anxiety and readiness over what Russia was capable of doing and how imminent the threat was. Of course I acknowledge the progress made, but the urgency and reality of the situation in which we now find ourselves necessitates a step change in the urgency of the Government’s response.
Luke Murphy (Basingstoke) (Lab)
I respect the right hon. Gentleman’s experience, and the tone in which he is delivering his speech. However, on the point of credibility, I would gently ask him this question. In April 2024, the Conservative Government committed to a target for defence spending in 2030—that target was, of course, 2.5%. A month earlier, they cut national insurance, and they committed to a further cut in national insurance in the manifesto. Will he reflect a little harder on the credibility of the Conservatives on this issue, given their failure to commit to 3% mere months before their party said that defence spending should be 3%, and with no real means to pay for it?
John Glen
Of course I recognise the mistakes and choices made in previous Governments, but as I was trying to indicate, the world has materially changed since the general election—I think that is pretty obvious to most people, given what is happening in geopolitics—and that necessitates a suitable response from the Government. Indeed the Chancellor insisted on that when he left his position as Defence Secretary.
In conclusion, if a party comes into government and secures the massive majority that this Government secured, it is pretty painful for the country to see the lack of ambition in the choices made in the three Budgets so far. The downgrade from 1.6% to 1% growth next year is massive, and it still implies a 2.6% per year spending cut in unprotected Departments from 2028-29 to 2031-32. I do not see that as politically realistic for the Labour party, and that is why I anticipate that the next step after the summit next month will be the call for a general election.
Madam Deputy Speaker
I call the Chair of the Business, Innovation, Science and Trade Committee, after which there will be a speaking limit of eight minutes.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Well, I am going to start by commending the Chancellor for what I thought was a Budget that is going to leave our country richer, fairer, stronger and safer. It has been my privilege to know the Chancellor for many years, and over the course of those years, he has been a modest man. The truth, though, on the basis of the numbers that he set out to the House today, is that he has nothing to be modest about. He has been able to tell the House today that we have delivered the joint highest growth in the G7. We have had the second biggest uplift to growth in the G7. Whole-of-economy investment is now at the highest rate since 1990. Productivity growth has been upgraded again and is now back in line not just with the growth rate but with the growth achieved by our competitors. One million more people are forecast to be in work between now and the end of the forecast period—that is 550 people back in work every single day. Economic expansion of £200 billion has been forecast for this Parliament—that is twice the level achieved under the last Parliament. GDP growth per capita is forecast to rise by £2,500 over the course of this Parliament—that is 36 times more than was achieved under the last Government.
Liam Byrne
I am not giving way.
Crucially, the OBR says today that GDP growth is now structural, therefore raising the potential for output growth over the course of years to come. Of course, that is helping the Chancellor to deliver the fastest fiscal consolidation in the G20.
I want to use the time I have to make three quick points about the virtue of predictability, about small businesses—a particular interest of our Committee—and about AI. The Chancellor has been able to deliver, and, despite the challenges posed by the war in the strait of Hormuz, he has managed to keep to the fiscal rules. Now, I am old enough to remember when the fiscal rules used to change every couple of years, depending on which faction was uppermost in the Conservative party. We used to zig-zag here and there, and the markets had no predictability. However, the response of the gilt markets this afternoon has been positive; they have respected the buffer that the Chancellor has been able to leave, but above all they have welcomed the fact that, where we have made changes to deliver real help now to the people we come to this House to serve, we have also stepped up and made the difficult decisions about how we are going to pay for those changes. We have not tried to borrow it on the never-never, as the Conservatives sought to do in the past, and that is exactly why we are retaining the confidence of the bond markets.
For Labour, growth in and of itself is never enough, and that is why growth in every postcode is an important political priority for this Administration. But if we want growth in every postcode, then we need enterprise in every postcode, and if we want enterprise in every postcode, then we are going to need surge finance into every postcode. We have got to step further and faster ahead of the proposals the Chancellor has laid out today to back those little engine rooms of growth in each of our constituencies: they are the people who work out of white vans—where I started my working career; they are the people on market stalls, on high streets and in every business park; they are the wealth creators in this economy—the visible economy that employs millions of our constituents.
I welcome the statement from UK Private Capital today that said that the Chancellor delivered “pro-investment” measures that should
“make the UK a more attractive place to invest in and grow a business.”
That is a really important judgment. The Startup Coalition has said that today’s Budget delivered the best news for start-ups and scale-ups that has come out of a Government in years. Those are important credentials.
Of course I would have liked to have seen the Chancellor go further. Today, I am publishing our Committee’s analysis, setting out where we would like to see the Chancellor do more, including further changing the business rate structure; changing VAT thresholds for small business; ensuring there is real accountability to drive Government procurement into the bank accounts of small business; going further to tackle the peril of late payments—not just tackling rogue traders, but tackling rogue customers who do not pay on time; and getting much tougher on high street crime by tackling bogus self-employment that undercuts good and honest traders on the high street. These are all important things that will help our small businesses to grow. Crucially, as a nation, we have got to crack the challenge of investing in ourselves.
The former Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), who is no longer in his place, made some important changes with the Mansion House accord, but the reality is that our country is not short of long-term savings—we have £3 trillion of long-term savings. Our problem is that we invest the lion’s share in other countries rather than in ourselves. Eighty per cent of the long-term savings that we channel into equity investment goes abroad rather than here, yet the Mansion House accord is proceeding so slowly that we are going to miss our target by a decade. That is not good enough.
I would like to see the Chancellor go further and faster on repatriating pension fund investment. The £25 billion that has been announced today for the National Wealth Fund and the British Business Bank is incredibly important, but that now has to be used to leverage in more of our long-term savings in order to expand enterprise in every postcode. We heard evidence at our Committee yesterday that underlines that the enterprise rate in our country is now at the highest level it has ever been. We have doubled the entrepreneurship rate since 1999, but too few of those businesses are surviving for the long term because we are not investing in ourselves. Let us rebuild regional banking, let us put business banking back on the high street and let us couple that with stronger, sharper incentives for our angel investors and venture capitalists. We are making some progress, but it needs to be much faster. We are not short of long-term savings or of genius, but what we have got to do is match the money to the ideas and the entrepreneurs at a completely different scale for the years to come.
My final point is about artificial intelligence. The Chancellor made some very important announcements about investing in artificial intelligence, and in artificial intelligence safety and security for the future. That builds on a number of initiatives started under the last Government, in particular by the former Prime Minister. Again, we have to grasp the fact that the way that we are going to reindustrialise our country is by marrying AI to HI—human ingenuity, the British genius that we have in such abundance on these isles of wonder.
This is the home of the scientific revolution. This is the home of the industrial revolution. We have been inventing the future and making history for 300 to 400 years in this country, but if we are to reindustrialise in the way that the Prime Minister has set out, we have to marry artificial intelligence, traditional engineering and cyber-engineering on a completely new level for the years to come. The IS-8—industrial strategy 8—needs to become the AI-8.
Crucially, we have to recognise that we are not going to spread artificial intelligence through our economy unless people trust it. That means that we will need new regulation to keep it safe and secure for the future, and we will have to ensure that there is a just transition for workers as they go through this new industrial revolution. The Committee will announce important recommendations on statutory safety legislation, which we think is needed in the here and now, and we will have a report out before Christmas about how we think workers should be supported and reskilled for the future. We have a tremendous future ahead of us if we get this right, but if we pretend that we can somehow leave it to the market to decide, rather than building a strategic partnership between the public and private sectors for the future, I am afraid that we will miss the opportunity that lies before us.
This is a Budget that, by and large, will be welcomed by business. More and further reform is needed, which I hope our Committee will influence in the 10-year plan and the CSR next year. The Chancellor should take some pride in having delivered a Budget statement today that leaves our country stronger and fitter for the future.
Helen Maguire (Epsom and Ewell) (LD)
I welcome much of what the Chancellor has shared today, but I believe that the Budget falls short in several areas.
In Epsom and Ewell, hard-working people are being stretched in all directions. One constituent has shared how, even though she is earning more than ever before, she just cannot keep up with the increasing costs of everyday life. That is not a unique experience. Rising costs are making essentials feel like luxuries, and working hard simply is not enough. Food prices are mounting, and energy bills are spiralling. The Chancellor offers a few pennies off a jar of marmalade, which will save households only £21 a year. While Paddington Bear will appreciate the cost of sandwiches going down, that marmalade relief will not help my constituents. We need to bring costs down. No one should have to worry about the cost of energy because of the whims of Westminster or geopolitical instability.
I welcome the £100 cash payment for homes in council tax bands A to D, but if energy bills keep rising, it will only offset the escalation in price. Today, the Government’s tax band checker crashed as people checked to see if they were eligible. That just shows how desperate people are. Instead of offering a one-off reprieve, why not offer a sustainable solution, such as an essential energy guarantee that would save the average family £100 a year, every year?
Epsom and Ewell is home to many hard-working businesses—independent restaurants such as Bamboo Basket and family-run shops such as Fudge & Sons. When I speak to local businesses, one word repeatedly comes up again and again: uncertainty. Only one in six small businesses anticipate growth in the next 12 months. That is a dire assessment, and Labour has only added pressure with its previous jobs tax and national insurance hikes. I welcome the slashing of the endless form filling and pointless paperwork and the introduction of founders’ relief, and I am glad that the Chancellor has finally listened to Liberal Democrat calls to support business and reward entrepreneurial ambition, but more must be done. Businesses deserve a fair deal.
I welcome the efforts to ease business rates, but they do not go far enough. Dawn, the director of Word on the Street bookshop in Ashtead, told me that she fears the changes will not help. Her business is a microbusiness; it has a turnover of less than £1 million, a balance sheet of less than £500,000 and fewer than 10 staff, but her current business rates are more than £6,000. To pay that, she must sell around 1,300 books a year. The current system continues to punish high street businesses and, due to the high rateable value in Surrey, businesses will not benefit from the new exemption. The Government must overhaul business rates now.
Hospitality is on its knees, and the Government have failed to throw businesses a lifeline. Every week, I am told that the cost of doing business is suffocating. Fiona, the landlady at the Marquis of Granby, was forced to increase the price of a pint from £6.50 to £7.15 just in the last year, and now there is a rise in beer duty. Green & Bean coffee shop in Epsom told me that it did not have any hope for this Budget, and quite frankly it was right. Hospitality is not just about pubs, cafés and restaurants; it is a vital entry point into the world of work, giving young people, including NEETs, a chance to gain skills, earn a wage and build a future. When hospitality businesses close, we lose jobs, local growth and the heart of our high streets. We cannot let that happen.
High energy costs put real pressure on small businesses. It seems that big industry gets a discount today, but the high streets get the bill, and Fatima’s Hair Boutique in Epsom is no exception. Hairdressing is energy intensive, and Fatima needs hot water, salon machines and heating. In summer, her salon’s energy bills are around £390 a month; in the winter, they average a staggering £600 a month. The Government have announced that electricity bills will be cut by up to 25% for more than 10,000 businesses through the British industrial competitiveness scheme, but will the Chancellor confirm whether high street businesses are included in that scheme? Small businesses need a cut in their energy bills, not a trim around the edges.
Epsom and Ewell is a strong net contributor to the Exchequer and is home to major businesses such as Aviva, Wates and Slitherine, but that success depends on strong rail infrastructure, and I did not hear anything about that in the Budget today. Cuts to train frequency post-covid are having a huge impact on local businesses. Growth relies on people being able to get to work and contribute to the economy. We must restore train services in Epsom and Ewell to at least four an hour—an investment that would pay dividends back to the Treasury.
I have been in Parliament for just over two years, and in that time I have seen three Health Secretaries come through. What I have not seen is the Government deliver on fully funding the new hospital programme. St Helier is being held together by patchwork repairs, and now we are seeing the result of that chronic under-investment—pipework so old that Legionella and Pseudomonas have been found in the water in St Helier’s maternity ward. My constituents deserve better. The Government must stop dragging their feet and speed up the construction of the new specialist emergency care hospital.
I welcome today’s abolition of the cliff edge on carer’s allowance, but the details are less welcome. It will not take effect for four years, and it will act as a 100% tax rate for working carers. The Chancellor did not acknowledge the crisis in primary care—GP waiting times are through the roof, while dental deserts are the default. It is not good enough. There was also no mention of funding for the national cancer plan. We need action to save lives and increase cancer survival rates. Treatment must begin within 62 days of diagnosis.
The Chancellor resigned as Defence Secretary because, in his own words, the plan fell
“well short of what is required for defence”.
That was an honourable decision, but now that he holds the purse strings, he has failed to set out a clear route for defence spending with the urgency that is needed. With the general public being told to stockpile, it appears that Britain’s kitchens are going to be better resourced than our armed forces. As such, although I welcome much of what has been announced today, for many of my constituents this Budget has not been bold enough. We need real guarantees that support constituents and businesses, because life should not be this hard.
Catherine West (Hornsey and Friern Barnet) (Lab)
It is a pleasure to follow the hon. Member for Epsom and Ewell (Helen Maguire). There is much to be welcomed in today’s Budget speech. For me, it was solid but not flashy—it was from the man who has HP Sauce on his sandwich, rather than pesto alla Genovese or tapenade aux olives. It is a really good Budget for the everyday, supporting households, helping small business and doing all it can for our fantastic start-ups.
Today’s debate takes place in the context of the IMF having said that the fundamentals of the UK economy are solid: unemployment is down by 26,000 among the working-age population and productivity has improved. However, the cost of a barrel of oil today is $114. I do not think any other Budget over the past few years has faced that sort of impact on every single thing we consume as a country, so the timeliness, tone, careful presentation and panache with which it was delivered were a real pleasure.
In my speech on the Budget last year, I reflected on Attlee’s 1945 Labour Government. Labour rebuilt the country, built the welfare state, built the NHS and built council homes up and down the country, but this year, the more appropriate leader to reflect on is the Labour Prime Minister Harold Wilson. He once said:
“I want to show that as a government we are sensitive to little points which may be trivial in the context of government policy but carry a disproportionate weight in people’s minds.”
That is the paternity cover for white-van employees that my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) mentioned. It is the help that the children at Coppetts Wood primary school are getting with their breakfast clubs, on top of the school meals provided by the Mayor of London and Barnet council.
It is also the use of empty office buildings. Harold Wilson once proposed the nationalisation London’s Centre Point; that building ultimately gave its name to the homelessness charity Centrepoint, which is still going from strength to strength today. What price can we put on bringing somebody in from the cold to be given a night away from those freezing temperatures and served by people in our constituencies? Those people do not necessarily work for the council; they may be from the Museum of Homelessness in Finsbury Park in my constituency, the Muswell Hill community kitchen or the street kitchen on the Harringay ladder. All those volunteers do brilliant work with those experiencing street homelessness, and they have been in touch to say how much they like the style of our Prime Minister and the solid style of our Chancellor. I am pleased to see that £39 billion has been earmarked to deliver 300,000 homes from 2026 to 2036.
I know that there is a bit of gloom around the Chamber, but we can be positive about the fact that when the cost of a barrel of oil was down at $70 a barrel just six months ago, things felt a bit more hopeful. One of the things that is implied in this Budget is the redoubling of effort by the Foreign Secretary to use our might abroad to bring people around the table to talk about the link between conflict and household budgets. Even if we did not see a total cessation of violence, but at least people were talking to each other, we might move towards $70 a barrel again, as compared with $114 today. That would see things turn around, as the fundamentals of our economy are strong.
I welcome the Your First Home scheme, backed by £4.7 billion. Both Haringey and Barnet councils will be pulling out all the stops to ensure that everyone has a safe, secure and affordable home, and they will be working on those ever longer lists of homeless individuals. I also welcome the statements about assisting councils with the fiscal devolution road map, as it is being called.
I look forward to Dame Louise Casey coming forward with her plan. I hope that councils will be pump-priming their adult social care departments so that, together with the NHS and social care partnerships, we can see that national care service become a reality much more quickly. Barnet’s Labour-run council earned dementia-friendly status and has worked with residents on an engagement and co-production charter for adult social care, working closely with Unison and other trade unions. That is the sort of co-operation we want to see.
I have talked about why we need good housing and good social care. The final piece of the puzzle is good, well-paid jobs. I am incredibly pleased to hear that the minimum wage is set to increase once again under a Labour Government for 2.3 million of our lowest-paid workers. We often hear in the media, from different quarters, about the damage that the minimum wage or the London living wage are doing. We rarely hear from people who have had a pay rise, who think, “That really helped me this week.” I welcome that rise, particularly for people in entry-level jobs. They might have hoped to get on a career ladder, but through a twist of fate in their own lives, are on the minimum wage or the London living wage for their entire career until they retire. For those workers, these increases are crucial.
In 1967, Harold Wilson applied for Britain to join the European Economic Community. In my constituency, 81% of people voted to remain in the European Union, and they want me to point out how important it is to the UK economy that we get closer to Europe. We know that Brexit hit our economy, making it 6% smaller, and we all know the importance of allowing the Prime Minister to go to Brussels next month with as free a hand as possible. Let us not hold Britain back. What about our children and young people who want to look forward to travelling abroad and having experiences where they learn a language and meet other people in their region? They will then get to know the difficulties in Europe and understand what it means to defend Europe, and they will appreciate the opportunities that are out there. For our future prosperity and for our children, we need to be at the heart of that European debate.
Finally, today’s Budget speech laid out timely, carefully presented interventions, with families and small business at their heart. I like the style of the Chancellor. It felt safe and it felt like the right thing for today. As we see, I hope, an improvement in the international conflict picture, we will see an improvement due to the good fundamentals that this Labour Government have produced since 2024.
Sir Desmond Swayne (New Forest West) (Con)
It is always a pleasure to follow the hon. Member for Hornsey and Friern Barnet (Catherine West).
I believe that this is the cut-and-run Budget. Indeed, I read in the papers this morning that the Liberal Democrats—currently occupying the two front Benches below the Gangway—have taken the hint as well and are preparing for a December election, such is the electioneering of this Budget. This is Hamlet without the prince.
Mr Toby Perkins (Chesterfield) (Lab)
So is the right hon. Gentleman’s main criticism of this Budget that it is too popular? [Interruption.]
Sir Desmond Swayne
I will certainly address the hon. Gentleman’s question. This Budget is certainly not popular with me—I have interests, which are set out in the register.
The difficulty is that, in the absence of the spending review and any clear appetite to deal with the £3 trillion debt, the burgeoning growth of debt and, of course, our lack of productivity, this Budget lacks any credibility. It is the “Try not to upset too many people” Budget, to get us through to the spring with the Government unscathed. That is the meaning of the “breathing space”—breathing space to get this Government to a position where they can call an election decently, notwithstanding the fact that the Prime Minister assured the people of Makerfield, and indeed has said in terms since, that he has no such intention. That is the reality we are dealing with.
The problem that we have at the centre of our economy at the moment was defined—brilliantly and very candidly, I think—by the Secretary of State for Work and Pensions when he said that, in all the meetings he has, the question he is asked is, “Who can we tax in order to give benefits to others?” That is essentially the issue we are having to deal with. The Chancellor has decided not to address that question. He has made a calculation. He calculates that the pain for the Labour party in addressing that issue is greater than the medium-term financial damage of not addressing it. Of course, the financial damage of not addressing it is that we will all pay higher mortgages and endure higher costs, but his calculation is that he can get to the spring before those particular chickens come home to roost. That is the strategy of this Budget: not to do too much, but to have a few things that make it, in the estimation of the hon. Member for Chesterfield (Mr Perkins), “popular”.
The reality, however, is that there is going to be an election, and we are going to have to face the huge question of the enormous costs that the Prime Minister has pointed to in his ambitions, and how that will have to be addressed. He said today that he is going to soak the banks. Now, that has implications for us all, because it affects the cost of everything. It will affect the cost of our mortgages, it will affect prices and, of course, it affects investment. What a signal to send to investors! “If you’re successful, if you’re doing well, we’re coming for you.” That is the message that investors receive. Little wonder that we are haemorrhaging wealthy taxpayers. According to Bloomberg data, we have lost half the billionaire wealth since 2024, either because it has left the United Kingdom or because its exposure here has been reduced.
We might ask ourselves why. Well, it comes back exactly to the issue raised by the Secretary of State for Work and Pensions. We have terrified those people with mansion taxes and with the international reach of inheritance tax on all their assets, and by merely talking about the prospect of raising capital gains tax. I am very glad that we have not raised capital gains tax, but they can read the runes. Then, of course, we expedite their exit by talking about an exit tax. All those things have consequences. Into this milieu of burgeoning debt and surging unemployment, the Prime Minister hurls his latest grenade: talk of rejoining free movement within the EU. Nothing could be more calculated to be devastating for the prospects of our young people languishing in unemployment than to suck in European labour.
So I say we have that election. Let us go for the election that the Government are clearly building themselves towards, because at least that will give the British people the opportunity to get off this road to penury.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure, I think, to follow the right hon. Member for New Forest West (Sir Desmond Swayne), but may I challenge a couple of his points? He talked about the risk of higher mortgages. I might remind him that there have been six interest rate cuts since 2024, which will have supported his constituents by bringing down their mortgage bills. He also mentioned productivity. I remind him that the upgraded growth forecast from the OBR is due to productivity gains from investment in AI. There is positive news, and I am sorry that he has missed it so far, but he may want to spend a bit more time looking.
I welcome today’s Budget, because in these tough times we need to put in place the foundations to build the base for a competitive future and prosperity for all. I was surprised by the rather extraordinary response from the Leader of the Opposition, who almost denied the impact of the Liz Truss mini-Budget. Perhaps it may be worth reminding the House that the unfunded £45 billion of tax cuts led to bond prices plunging, sterling falling and the Bank of England having to intervene to prevent a financial stability crisis. It is important that we recognise what happened. That, alongside the fact that the welfare bill rose by £33 billion in the years to 2024, might help bring some honesty to the debate.
Let me speak about today’s Budget from the point of view of three key tests, because it needs to be a Budget for stability, growth and easing the cost of living. The Budget comes amidst unprecedented economic shocks, with conflict in the middle east and Europe, which has disrupted international energy and commodity supplies. The Bank of England identified the energy shock from the middle east as a major source of uncertainty in July 2026, so I welcome the Budget and, in particular, the Chancellor’s determination to combine fiscal discipline with a relentless focus on growth and tackling the cost of living.
Fiscal discipline matters. It is not simply about an accounting exercise at the Treasury; it is about credibility and national economic security. Indeed, the bond markets matter. In 2022 we saw what happens when investors lose confidence in the sustainability of public finances. However, fiscal discipline and growth are not competing objectives. Ultimately, having sustained economic growth, higher productivity, higher investment and more people in good employment is the surest foundation for sustainable public finances.
I am pleased that the UK economy has shown resilience, for which I pay tribute to my right hon. Friend the Chancellor and to the stewardship of the former Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves). It is important not to talk Britain down, because we were the joint fastest-growing economy in the G7 in the first half of this year, alongside the US. Borrowing last year fell to the lowest level for six years, the IMF has upgraded our growth to 1.3% for this year, and the IMF’s chief economist has said that we “stand out” on deficit reduction. I know that the Opposition may be disappointed by the OBR’s revision of the forecast.
I welcome the Government’s commitment as a priority to get energy costs down not just today, but for the future. I would welcome more clarity from the Government on whether they are reconsidering the expansion of the British industrialisation competitiveness scheme, which I believe may be coming forward in the 10-year plan. However, with global headwinds from the conflict in the middle east impacting us here and economies throughout the world, it is vital that we have our own plan for growth and for tackling the cost of living.
On growth, I will briefly speak about fiscal devolution and entrepreneurship. Business and industry must be at the heart of our plans for growth. It is important that we have a plan for building the principles of stability, partnership and innovation, with unleashing potential in every corner of the economy in the UK at the heart of our plans. That is why I was pleased to welcome the fiscal devolution road map, which is bold, ambitious and game changing. It recognises that we need to deal with the challenges of today and address the structural challenges to achieve higher growth tomorrow.
For too long Britain has been one of the most centralised major economies in the developed world, with only 5% to 6% of total tax revenue raised locally, while the OECD average is closer to 11%. However, fiscal devolution means more than devolving spending decisions; it is about enabling greater responsibility and stronger incentives to expand local economies and tax bases.
Graham Stuart
We have had devolution since the Blair Government, and Wales has become one of the poorest parts of the whole of Europe, although it has had serious and real fiscal devolution. If it has been so spectacularly painful for the residents of Wales to have such devolution, why does the hon. Lady think it will be so marvellous for people in other parts of the United Kingdom?
Seema Malhotra
I think there is an important debate to be had about how we make sure that fiscal devolution is successful and what the enabling factors are, but it has been successful elsewhere. As the right hon. Member will recognise, I was pleased as a London MP to see today’s commitments to establish a successor to the Elizabeth line business rate supplement and to support transport infrastructure in the future through some of the new mechanisms. It is important that we look at how fiscal devolution can accelerate projects that will unlock homes, create jobs and generate economic growth not just in the capital, but across the UK.
As we devolve—and I am putting this to the Treasury team—it will be important to confront another economic challenge, which is co-ordination. Economies do not stop at administrative boundaries; there are cross-regional economic spillovers. If we do not design institutions to take account of them, ensure appropriate accountability and evaluation, and help successful innovations in one region spread to others, what appears optimal for each region individually may not be optimal for Britain collectively. I look to the Treasury team to update the House on what can be learned from elsewhere about having co-ordination as well as devolution.
I was extremely pleased to see the measures supporting young entrepreneurs and also women entrepreneurs. I championed that in my previous work as chair of the APPG for entrepreneurship. Entrepreneurship is oddly absent from debates about youth unemployment. We celebrate success when people have an initial public offering or attract a big investment, but we do not talk about the preceding journey or the inequality that often characterises it. So I am looking forward to the Government’s measures having an impact in encouraging entrepreneurship among young people across the country.
Let me say a few words on opportunity and the cost of living. I believe that the Your First Home scheme will make a huge difference not just to my constituents in Feltham and Heston, but also across the country. It is vital to have measures such as the 20% equity loan scheme to help first-time buyers, with a minimum deposit requirement of just 2.5%, to ensure the scheme is accessible to those who have a regular income, but have been unable to save for a large deposit. The council tax rebate, removing VAT from domestic electricity bills and the reforms to standing charges, alongside the first rail fare freeze in 30 years that was announced earlier this year and the freeze in prescription charges, are all important measures.
In conclusion, this is a Budget for stability and growth, and one that eases the cost of living. It is designed to raise Britain’s productivity and investment, and to spread opportunity to every part of our country by investing to save and investing to grow. Taken together, fiscal credibility, empowered regions, effective co-ordination and investment in human potential will lead to better growth that is productive, inclusive and sustainable. This is the time and the challenge that we as a nation must rise to.
Kirsty Blackman (Aberdeen North) (SNP)
People desperately need support with the cost of living. They do not need brown sauce, gherkins or marmalade; they need help with the cost of living.
If we look at the documents the Chancellor produced today, he is less likely to hit his fiscal rules than the previous Chancellor was. That is what the back of the OBR book tells us. Real household disposable income is going to drop in the short term. Labour Members will be standing on an election platform saying “vote for us” when household disposable income, a fairly reasonable measure of living standards, is going to drop in the short term. It will rise again only if gas and energy prices do what the OBR hopes they do—the OBR has been very clear that that is not by any means set—but who would like to predict what Donald Trump is going to do next? I certainly wouldn’t. We do not know what will happen. The only way in which people’s living standards will increase is if the international energy markets reduce the price of gas and oil. That is what the Chancellor is pinning his hopes on.
The Chancellor is giving people £100 in this Budget, despite the fact that, as of January, energy bills will be £1,000 higher than Labour promised they would be in their manifesto—£1,000 higher. We have a situation where every single major household bill has increased over the course of this Government—every single one. We are seeing people really struggling with the cost of living, and what does the Chancellor decide to do? He decides to reprioritise capital spending. He decides to pull money from the Acorn project in the north-east of Scotland, which supports hundreds of jobs for carbon capture and storage, and which the Climate Change Committee said was one of the projects needed to get us to meet our climate change ambitions. That is one of the things the Chancellor has chosen to do today.
The other problem, for which the Conservatives have a significant responsibility for creating, is the fact that the UK has an incredible level of index-linked debt. I am pleased that the Chancellor is moving towards reducing the percentage of index-linked debt, but only three countries in the OECD have higher levels of index-linked debt: Mexico, Israel and Chile. Moving away from that legacy left by the Conservatives is really helpful in today’s financial climate. However, if the Government do not manage to make that, any slight change in the level of inflation or oil and gas prices could mean that the Chancellor massively misses his fiscal rules. The section on risk in the OBR’s Blue Book very clearly sets out how easily a very small percentage change could mean that the Chancellor will miss his rules. There is only about a 50% chance that is he going to hit the rules anyway—it is only about 52% in the back of the Blue Book. Therefore, given the volatility of the world, we should all be incredibly worried.
We needed something dramatic. We needed something major to ensure that people can survive this cost of living crisis. We had the child poverty strategy earlier in this Parliament. It was deeply, deeply unambitious other than the removal of the two-child limit, which I fought for and entirely welcomed. Other than that, every single thing had already been introduced or announced. In Scotland, we have a much better child poverty strategy and, in fact, the most comprehensive cost of living package in the UK.
People with children are looking at this Budget and thinking, “It does not help us.” Young graduates currently living with their parents up to the age of 25, which they have never done before, are looking at the student loans that they owe in England and thinking, “How can we possibly be paying our student loans until we’re 60, with no chance of a job?” Couples with children are looking at the fact that their parents could afford for one of them to work part time, could afford to have more children, and could still afford to go on an annual holiday. Couples now cannot afford that because they are poorer than the generations before. Folk in their 40s have no end in sight to their mortgage—whereas their parents had paid theirs off by then—because house prices have gone through the roof, and mortgage prices are even higher as a result of some of the decisions taken.
What is the Chancellor doing? He is providing cheaper gherkins—great! Disabled people who are desperate to work, but currently subsisting on universal credit, know that they cannot afford the fuel needed to drive their car to a job. They cannot do that, but what has the Chancellor delivered? One hundred pounds. That is not going to cut it. We have pensioners who are living in terror of their next energy bill. They have lost trust in this Government thanks to the winter fuel cut that came with no warning and what was done to the WASPI women.
The Chancellor has completely failed to recognise the huge number of people living in fear of the next bill dropping through the letterbox. He is living in a different reality from the rest of us. He is providing some changes around the edges. He says he is providing a little bit of breathing space, but it is not going to get people through this winter, never mind to the spending review or the Prime Minister’s wonderful 10-year plan that is supposed to be coming.
We have made different choices in Scotland. We provided the baby box. We provided a cost-of-living package that is the most comprehensive in the UK. We provided no prescription charges. We provided free university tuition. We do not have access to all the levers. We do not have the ability to do what we asked of the Chancellor, which was to cut energy bills by at least £300—not even close to the manifesto pledge but getting there. We asked the Chancellor to make a difference so that people can afford to get through this winter. We asked for the removal of VAT on various things, including petrol and diesel for the duration. We are pleased to hear the changes that have been announced on fuel, particularly on mileage, which makes a massive difference.
A couple of weeks ago when Jackdaw was announced, the Government talked about removing the gas standing charges. We know that this is going to put up the energy bills for those people who use the higher levels of gas. We know that people in Scotland have significantly colder properties because it is colder in Scotland than it is here. What is the differential change? How many people in Scotland will be losing far more, given the extra that they will be spending? How many disabled or elderly people, who spend more time at home, will have to pay more on their gas bills because of the Chancellor’s choices? Has he actually looked at that? Is it in any way a progressive measure, or will it continue to screw over those people who are already screwed over by the current situation? The Chancellor needs to do better.
Mr Toby Perkins (Chesterfield) (Lab)
The Budget will continue to make Britain more resilient, by supporting people and businesses in the current moment and investing in the future. In an increasingly uncertain and changing world, this Government are steadying the ship. The Budget will help families with the pressures they face now and invest in the long term to bring down the cost of living, making life easier and better for working people.
I welcome much of what has been announced. However, while members of the mineworkers’ pension scheme in my constituency are much better off as a result of the measures taken by this Government two years ago—and have seen further improvements with the position that the Chancellor has taken today—there will still be disappointment that the Government have not decided to return all the surpluses from the scheme to its members. Mineworkers paid a large health price for their commitment to keeping the lights on over many decades, and each day of delay means that more mineworkers die without receiving the full fruits of their industry and community’s commitment to our nation.
Turning to the positive news announced today, we have the second fastest growth in the G7, our growth forecast has been upgraded once again by the IMF and, as was generously acknowledged by the former Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), the FTSE has risen modestly. I remember being on the Opposition Benches when Kwasi Kwarteng was delivering his Budget and seeing hundreds of thousands of pounds—millions, even—crashing off the value of the stock market. It is important to acknowledge that those who have an independent view of this, outside of the political sphere, have welcomed this Budget, which is a sure sign that this Government are on the right track.
At every single Budget under this Government, the Conservatives have predicted catastrophe, and yet every time the economic figures have come out, they have been more positive than their predictions. We have seen measures today meaning that 43,800 Chesterfield households will receive £100 towards their energy bills this winter; a £50 reduction because of the changes in VAT; fewer pensioners being brought into paying tax; positive support for self-employed partners; a welcome increase in the threshold for small business rate relief up to £18,000, meaning that 54% of businesses in the east midlands will now pay no business rates; and no rises for the next two years on business rates.
The Government have made that economic progress at the same time as building huge amounts of home-grown renewable energy capacity; holding failing water companies to account; reviving council house building; bringing down national health service waiting times; introducing record increases in the national minimum wage; bringing more people into work than ever before; making record investments in our national health service; and bringing half a million children out of poverty. That is the difference that a Labour Government have made.
Possibly the greatest endorsement of this Budget is how weak the Opposition have been on it. When Opposition Members get to their feet to say, “Well, I think you could have been a bit more ambitious,” we know that they do not really have a line to attack us on. That is a very strong endorsement of this Budget. Of course, there is much more to be done.
I should say that while the Leader of the Opposition was making what we all know to be a difficult speech—apparently some facts were redacted in the copy she received—which is why her critique was so weak, but at least she turned up to make that speech. The leader of the Reform party did not even bother turning up to the Budget. It is extraordinary.
Mr Perkins
I was under the impression that the hon. Member for Clacton (Nigel Farage) was still the leader of the Reform party. Why did he bother seeking re-election? He never turns up to this place. He is mystifying.
There is so much more to be done. Russia’s illegal invasion of Ukraine and Trump’s ill-advised war on Iran have driven up fuel prices, energy prices and the cost of fertiliser, creating a cost of living crisis across the globe to which we are not immune. In that context, I welcome the Chancellor’s priorities of boosting Britain’s resilience and bringing down energy costs for good.
Climate change and biodiversity loss continue to be clear and present threats to Britain’s security and prosperity, with droughts at home and across the globe reducing crop yields and driving up food prices. The Climate Change Committee has been absolutely clear that climate impacts could cost the UK economy £10.7 billion over the next year in lower tax revenue alone because of lower productivity due to extreme heat or disruptions from flooding. Every independent analysis tells us that, because of the cost it will have on our economy, taking action on climate change is far cheaper than not acting.
Just a few weeks after a summer of wildfires and drought, when extreme heat caused more than 3,000 excess deaths in the United Kingdom in May and June alone, we need to be really cautious about anything that can lead to higher emissions. While I welcome the Chancellor’s desire to see data centres here in the UK, we need to be very careful that we do that in a way that does not damage our climate commitment.
Land managers and farmers are central to preparing the UK for the impacts of climate change. Investing in UK farming will also help to protect farmers from global events, in turn helping to shield consumers from rising food costs. Yet just a few weeks ago, the window for applications on the sustainable farming incentive was open for just six hours before it was fully subscribed. It is great that this Government are getting that money out the door and to farmers. It also shows the immense appetite for this funding and for nature-friendly farming. It is important that the Government take every step that they can to provide more support for farmers who are doing things the right way.
In conclusion, this is a Budget of stability and of hope for working people and small businesses. It is a Budget that supports entrepreneurs. It was extraordinary to hear the Leader of the Opposition say that this Budget does nothing for business when it specifically supports entrepreneurs and risk-takers in our economy. This Budget is progressive—it has the most value for those with the lowest income—and it takes the serious decisions to address the collapse in our economy caused by the Conservatives. It continues to deliver growth while reducing, over several years, the debt-to-GDP ratio of our country. For all those reasons, it is a Budget that I am very pleased to support.
Richard Tice (Boston and Skegness) (Reform)
Poorer—that is what every household in the country is, including in my constituency of Boston and Skegness. This year alone, real household disposable income is down 0.8%, and every single year between now and the end of this parliamentary term, the average household’s real disposable income is down compared to what the OBR forecast just six months ago. Let us look at the other main economic data: GDP growth for 2027 is forecast to be down once again—from 1.6% to 1%—under this failing Labour Government; and GDP growth per capita is forecast to be down from 1.3% to 0.9%.
And let us just look at what is up, shall we? Government borrowing in this financial year alone is up almost £20 billion compared to what the OBR forecast just six months ago. Over the lifetime of this Budget book for the next five years, Government borrowing will be over £65 billion more than the OBR forecast just six months ago. This is a Government who are completely out of control in terms of spending. That is why the bond markets are applying what is known internationally as “the moron premium” to the United Kingdom under this Labour Government.
Credit where credit is due, this Chancellor does know where the real problems are and he has tried to do a little bit. He understands that there is a crisis with energy bills, which are now forecast to go up by an extra £466 per household in January, and then by another £200 per household in April—all because of the madness of net zero and the rush to renewables, which is happening as we speak. Every single day, NESO is having to tweak and twiddle the dials and add balancing costs to the tune of some £50 million. That is ten times what it was just a few years ago. Next year, it will cost £200 per household for the balancing costs on the grid alone. This is completely out of control. The Chancellor has shuffled the cards in the pack. He has moved a bit from bills to general taxation, but he has not dealt with the real crux of the crisis, which is that the rush to renewables is driving up all our household energy bills at a catastrophically high rate.
Now, I am constructive sort of guy, so I want to give credit where credit is due, so let me say that the Government have done the right thing in approving Jackdaw—but they need to go further. Ministers know in their heart of hearts that they need to approve the oilfield at Rosebank—the Prime Minister was tempted to confirm it at question time today—and grant many more licences in the North sea, because that is our energy treasure; that is where the jobs are and where the growth is. This Government are completely failing on growth. The energy crisis is getting worse, and everybody needs to understand that. If we use our energy treasure, the bills will come down.
If we look at property and housing—again, credit where credit is due—the Chancellor has eased regulations to try to build more homes on brownfield sites. I think he might have read the teal paper I released in September on how to reduce the cost of construction and get more things built. He is right to remove the need for biodiversity requirements on brownfield sites, but there is so much more to do to reduce the construction cost of the new homes that I think we all agree we need to build. There is a £15,000 to £20,000 increase in the cost of homes because of unnecessary regulations, but again the Chancellor has not grasped the real opportunities to go for it and reduce the cost of building. That is what we need. We all agree that we need more affordable social housing, but to do that we have to reduce and remove unnecessary restrictions and the delays in getting planning consents.
We now know that the Secretary of State for Housing, Communities and Local Government has given up on her 1.5 million target. In reality, we will be lucky to get to half that number—750,000 homes instead of 1.5 million. These are the lost opportunities from a Government obsessed with regulation, obsessed with process and obsessed with bureaucracy. They cannot do the right thing to deregulate and get some growth.
Mike Martin
The hon. Member seems to be extolling the benefits of building houses, so can he explain why the Reform party in Tunbridge Wells is campaigning to restrict house building?
Richard Tice
Far from it—we are actually trying to build more houses on brownfield sites, because that is what we should do all over the country, including in the great town of Tunbridge Wells. We need to make it easier to build on brownfield sites. At the moment, house builders are giving up all over the country because the costs are too high.
I think the Chancellor has been looking at some of our excellent Reform policies, but while he is right to lift the income tax threshold for pensioners, he could have gone much further and lifted it for everybody—up to our recommended level of £15,000—by being more dramatic about cutting the vast amount of wasteful spending on welfare and cutting foreign aid to overseas nations that do not need it. Those are the differences between the right things to do and the lost opportunities of this Government.
I think the Chancellor has listened to another Reform policy, which is to lift the threshold on business rates, but he has not gone far enough. While the £18,000 threshold is better than £12,000, it needs to be much higher. That is another lost opportunity.
We have a nation of voters, and every household who looks at this Budget book and listens to the Budget will say, “No, thanks. Every single year between now and 2030-31 we’re all getting poorer than the OBR forecast just six months ago.” People feel it and they sense it. They know that their money is being wasted on bureaucracy and unnecessary quangos—more taskforces and quangos have been set up during this Budget. It could have been so much better. I feel that this Chancellor has just not had the courage or the strength. He has not risen to the occasion. He has tried, but it is not good enough. We are facing a financial crisis and an energy crisis, and we need a Government who do the right thing—a Government who cut our bills. This Budget is a lost opportunity.
Matt Western (Warwick and Leamington) (Lab)
It is a pleasure to follow the hon. Member for Boston and Skegness (Richard Tice), though I disagree with the vast majority, if not all, of what he said. As we have seen, growth is running at about 2.1%. We have not seen that economic performance for about 10 years, with the exception of 2022, as we emerged from the pandemic. In the 2024 general election, we promised that we would fix the foundations; that cannot be done overnight. We said that we would produce the highest growth rate in the G7 and we have done that.
I am proud of the Government’s record, as, I am sure, are all my colleagues on the Labour Benches. That is not just about what we have heard today; it is about what has happened over the last few years. I want to place on record my thanks to the last Labour Prime Minister and his Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), for their stewardship, because they delivered fiscal discipline, bold economic reforms and good growth.
We face the impacts of global events at home when doing the weekly food shop or filling up at the pumps, with Trump and Netanyahu’s war in Iran set to cost each household £2,500 by the end of 2027. Listening to the Chancellor, today’s Budget looks to build on the fiscal foundations and I welcome the measures laid out. It will give families the breathing room they need by extending the VAT on electricity bills this winter and spring into July next year, taking £50 off; cutting standing charges on gas bills, saving £45 for the average household; knocking green levies off bills; and providing a council tax rebate of £100 to help 20 million households with their energy bills—that will help almost 40,000 households in my constituency of Warwick and Leamington.
Today’s Budget cannot fix the cost of living overnight. Between 2010 and 2024, real weekly average wages rose by just £16, but if we had matched the wage growth seen in Germany, our earnings would be £3,600 a year higher. The extension of the 5p tax cuts on fuel duty to July is welcome, as is holding down red diesel. I congratulate the Chancellor for helping motorists, particularly business users, with the higher mileage rate increasing from 25p to 35p. That will make a significant difference.
The average house price in my constituency 30 years ago was five times the average annual salary. Today, it is 10 times the average annual salary. That is why I welcome the Government’s announcement; it is critical to increase supply to help young people to stay in their areas and to help key workers to locate themselves near their work. That is particularly relevant not just to the businesses in my constituency but to Warwick hospital. When it comes to the delivery of affordable housing and council homes, extending the discounts on the local authority borrowing rate is important, and the introduction of the £4.7 billion Your First Home programme is welcome.
I am delighted to see the Chancellor backing UK businesses by taking more of them out of paying business rates. The raising of the small business rate relief threshold means that 52% of all retail, hospitality and leisure businesses will pay no business rates at all, and the real-terms business rates freeze for eligible businesses will benefit 535 properties in my constituency. The Chancellor also mentioned the relief for family businesses, and the relief for entrepreneurs and founders, which is particularly welcome and innovative. I commend him on that.
On the reindustrialisation programme, the additional investment announced, totalling £20 billion and supporting 100,000 jobs in sectors such as AI, defence and green energy, will strengthen our economic resilience. In Warwick and Leamington, we are very well positioned to take advantage of that, in particular through our advanced manufacturing, automative and defence businesses. Let me highlight just one company, given that we have been talking about innovation and have heard that are no £1 billion businesses in the UK. A company just down the road in Oxford—a spin-out of a PhD project at Oxford University—had zero money in 2009, but by 2019, just 10 years later, it was worth £100 million and was subsequently bought by Mercedes.
To build on the point made by my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) about pensions, ISAs and encouraging greater investment in the United Kingdom, I believe that there is a lot of money in this country as liquid assets and we have to use much more of those assets, such as those in ISAs, to invest in the United Kingdom. I would like to see more encouragement and more fiscal incentive for individuals to use their savings to invest in the United Kingdom or in the UK’s defence sector.
On devolution, it is welcome that there is transitional growth funding. I agree with the combining of powers—for Warwickshire, Coventry or the west midlands, whichever way we end up—and believe that it is important. I really do hope, though, that areas such as mine will not lose out just because of the mistakes made with local government reform back in the 1970s, when Coventry was hived off from the rest of Warwickshire.
I welcome the long-term thinking that the Prime Minister is bringing to his role and how he sees Government. Working with countries such as Vietnam, we will see the benefits of a long-term plan and the strategy for delivering permanent growth and long-term prosperity for communities.
We must have AI sovereignty, either through strategic leverage of the AI stack or through a sovereign frontier AI model, so I welcome the Chancellor’s announcement on a sovereign AI unit.
I welcome the measures in the Budget, particularly what has been done to help households through this incredibly tough time—a tough time brought on by external events, whether it be the war in Ukraine or the unnecessary war in Iran brought about by Trump and Netanyahu, which has seen energy prices spike dramatically during the past 10 months. These are significant headwinds, and there is only so much a Government can do to battle them, but I really appreciate the measures that this Government and this Chancellor have introduced to address them.
I agree with my colleagues that this Budget has been delivered by a Chancellor who is renowned for his steadfastness, durability and seriousness. He brings all his personal qualities to the role of Chancellor, and his first Budget underlines his vision and the seriousness with which he wants to steer our country through a very difficult time. I look forward to supporting the Budget.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this Budget debate and to follow the hon. Member for Warwick and Leamington (Matt Western). Like him, I tend to think that this Budget reflects the seriousness and the vision of the Chancellor, but unlike him, I do not conclude from that that the Chancellor has a deep and serious vision of the future for this country. On the contrary, he, alongside the Prime Minister, has come up with a whole series of small measures. In fact, there are more measures in this Budget than in any previous Budget, and their average value is lower than in any previous Budget. In other words, the Chancellor is fiddling. He is playing with little gifts that he can highlight and say, “We are doing this for business. Look, we are we are taking 70,000 businesses out of business rates.” Of course I welcome that, but it is inadequate in a high street that is falling and losing.
The Conservatives have a leader and a shadow Chancellor with a vision, and that is why our policy would take 250,000 high street companies out of business rates so that we can have the shops, the cafés, the pubs and all the other businesses that give chances to young people and give them that first job so that they can learn how to talk to a boss, how to engage with customers, and how to understand tills and money. That first job gives them a chance, whether it is a Saturday job or whatever. I know that Labour Members did not mean to do it, but that door has been slammed in young people’s faces by this Labour Government. That is why we have seen youth unemployment go up.
Graham Stuart
I will happily give way to the hon. Gentleman in a moment. I am sure that, when he meets young people in his constituency, he is exactly the same as me. I am sure he meets more and more young people who feel a sense of hopelessness. They feel that they are further than ever before from getting on the housing market, and some of them cannot even look that far because they are struggling to get that first job—that first opportunity. Today’s Budget shows that this Government still do not get it, but perhaps the hon. Gentleman does. Perhaps we can finally hear a non-partisan Labour intervention from someone who takes deeply seriously the need to get business going in this country.
Noah Law
I thank the right hon. Gentleman for his kind words, but does he appreciate that, in the south-west at least, 56% of retail, hospitality and leisure businesses will be lifted out of the business rates system entirely? Is that welcome news to him? I hope he has some welcome news in his own patch as well.
Graham Stuart
I think—I am not an expert on this, let alone on all those jobs in the hon. Gentleman’s region—that most are already outside of that system and are therefore not being lifted out. UKHospitality has suggested that as few as 10% of these businesses will be affected by the measure. That is my point to the hon. Gentleman, who I know is sincere and wants to properly reflect the serious challenges facing his constituents and his part of the country.
This Government do not get it. Instead of the bold measure we should have had—250,000 businesses being brought out to bring life, dynamism and hope back to his high street and mine—we have a timid Government playing on the margins. That of course is the central problem of today’s Budget, as was laid out far more eloquently and—as Labour colleagues would doubtless say—more reasonably than I ever could by the former Chancellor, my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt).
The Leader of the Opposition said that the Chancellor had received a hospital pass on inheriting the economic situation from his predecessor, but I remember someone once saying to me, “Do you know what the best thing you can ever have in life is, Graham?” I said, “No, I don’t. What is it?” They said, “A lousy predecessor.” On that measure, the Chancellor has been quite fortunate. And yet he comes forward with something this timid, this pallid and this lacking in inspiration, and gives a speech that entirely aligns with those qualities, and he is met with a near rapturous reception from Labour Members who have had to put up with the two previous Budgets, with their disastrous impact on the UK economy.
Why were those Budgets so disastrous? I can tell the House: it is because growth and wealth, which the former Business Secretary, the right hon. Member for Hove and Portslade (Peter Kyle), spoke about so eloquently earlier, come from the private sector. They do not come from a mission-led Government having a tight deadline to go and help rearrange governmental boards and improve the quality of people on them—that is peripheral. It is private business that creates them, but what did the former Chancellor do? She raised taxes on business by £60 billion. [Interruption.] More than £60 billion, I am told. The small businesses that I meet in Beverley, Hedon, Skirlaugh, Withernsea and across my constituency really want to grow and have customers who want to come in, but the tax position has meant that they cannot offer jobs to the young people I also meet outside those shops, standing around listlessly, who want those jobs. That gap has been widened by the £60 billion in taxes.
According to Government Members today, that gap has been narrowed because of this business rates reduction for 70,000 businesses. But that is not telling the whole story, is it? It is a sleight-of-hand Budget as well, which is why I think it is a disappointment. Business taxes have not gone up by another £60 billion—praise the Lord—but they have gone up by over £2 billion through fiddly measures. On top of that, there is the ever-popular call of, “Let’s attack the banks to feed the Labour Back Benchers,” who are so divorced from economic reality. The banks will be paying £1.6 billion in 15 months—that is if we believe that in 15 months, the Chancellor will say to this particular set of Back-Bench Labour MPs, “Oh, I’ve got a great idea. Let’s look forward to the day we take the tax off the banks.” I rather fear that the 15 months will be extended because of those people who have done so much damage before by leaning on their Front Benchers. Anyway, let us assume that it is real and it only lasts 15 months: £1.5 billion or £1.6 billion will be taken out of the banks.
You know, Madam Deputy Speaker, being a long-standing and experienced Member of this House, that the capital of banks has a big multiplier attached to it. When the Government take £1.5 billion or £1.6 billion away from the banks, they are not hitting the rich and helping the poor; they are actually massively reducing the pool of funding available for the very businesses that, if only the Government started to get some of their policies right, might get to a position, as they profoundly want to, where they can offer a job to that young person outside who cannot get one today.
Amanda Martin (Portsmouth North) (Lab)
I thank the right hon. Member for giving way during his discussion about banks. Is he aware that Barclays’ profits are up by 1.6%?
Graham Stuart
I am delighted. Only one thing is worse than fat, greedy, complacent, lazy banks—if that is how the hon. Member wants to characterise them—and that is broke ones, because once we have a bust banking system, the whole of society is stuffed. People cannot get on the housing ladder, start a small shop or get anywhere. That is why I plead with Labour Members, who I know have had little to do with private businesses—they have come from their charities, social work and trade unions, and have no understanding of business. It seems a populist thing to do to attack the banks, but in fact it hurts ordinary people and means that that small shop on the high street cannot take on the unemployed youngster outside.
Graham Stuart
I will not give way if the hon. Member will allow me.
What is happening to business investment next year? According to the Government’s own figures, it is falling. What is happening to the debt of the nation as a result of today’s Budget, compared with the position earlier in the year? It goes up in every year of the forecast—five years of additional debt, and it was already scary. Labour Members such as the hon. Member for Warwick and Leamington (Matt Western), whom I respect a great deal, and the hon. Member for Chesterfield (Mr Perkins) have been trying to say that this is a great Budget for entrepreneurs, but it is not. It is a Budget that allows a listing ship of state and the economy of this country to drift ever closer to the rocks. Year by year we will see debt going up, taxes going up and incentives going down, and without those incentives, those businesses in Beverley, Withernsea, Hedon and Skirlaugh, or wherever they are in my constituency, just cannot offer that job to that person.
To look at the specifics of the Budget, how is some of this being funded? The Chancellor skated over it as best he could, but he is going to tax amusement arcades. As if coastal towns such as Withernsea and Hornsea up the coast are not hurting enough, he is going put up tax on the entertainment of ordinary people going to the amusement arcade. He is an enemy of fun.
Graham Stuart
I will not give way to the hon. Gentleman.
Coastal communities are losing out, and savers are being hit by a £500 million increase in tax—again, I do not think that has come through clearly. Some Members talk about this being good for pensioners, but it is not. Those who have saved and put money away for the future are going to be taxed again and again. We will see tax reach a new peak of 37.9% next year, and according to the Government what is going to happen? It is going to go up again. We will have sky-high borrowing and sky-high tax.
One would have thought that the central challenge for this Chancellor would have been to ensure we had a firm plan for defence spending to reach 3% by 2030. Did he deliver that? No he did not, which suggests that he resigned more to get the job than to do the right thing by defence.
Jim Dickson (Dartford) (Lab)
It is always a pleasure to follow the right hon. Member for Beverley and Holderness (Graham Stuart). He is always very entertaining, and I am always intrigued by how there seems to be an inverse ratio between the number of interventions he makes and the number he takes. I reassure him that on the lousy predecessor test, this Government were truly blessed in 2024 by the former right hon. Member for South West Norfolk and the right hon. Member for Richmond and Northallerton (Rishi Sunak).
Jim Dickson
I welcome the Budget, and it is a pleasure to follow distinguished members of the Treasury Committee from across the Chamber. As others have noted, when the IMF published its most recent forecast, it highlighted how despite the consequences of US military action in Iran, our economy is proving more resilient than expected, with 1.3% growth for this year and similar for next. That is largely underscored by the OBR forecast. I back our Government to exceed those forecasts, as they have done this year, and we wish them well in doing so. We should not underplay the damage done by the conflict, with price rises in important commodities such as oil and fertilisers pushing up inflation, but it is positive that the IMF has upgraded our growth prospects. That, I believe, is a testament to the work of the current and previous Chancellors, and it is welcome that we remain towards the top end of the G7 for growth, even though—as always—Members of the House would want growth to be higher, and we hope very much that it is.
In my view, it remains essential to reassure the markets that we will stick to the fiscal rules, and I welcome the Chancellor’s pledge today to keep doing so. We must ensure that we continue to keep sufficient headroom against those rules, and again the Chancellor has done that.That was recognised by the IMF, which singled out the UK among the G7 for the way that we are managing our debts. As shown in chart 3.4 in the Red Book, which sets out the distributional impact of the Budget, we are doing that while ensuring that those at the bottom end of the income scale do better proportionally than those higher up the income scale. I believe that means this is a proper Budget for working people.
This careful and fair economic management will allow us to ramp up defence spending to meet the spending target of 3% by 2030, after our armed forces, frankly, languished under the previous Government.
Stuart Anderson
I welcome the approach to move forward on defence, but since I have been elected I have even called my own Government out for not providing enough defence funding. Does the hon. Gentleman realise that today’s announcement on defence means that we are making in-year cuts for the next two years on defence because we cannot afford what we currently have in place?
Jim Dickson
I thank the hon. Member for his intervention, but I am very confident that the plans laid out today will take us to 3% by the end of this Parliament, and to 3.5% by the middle of the next decade. That is what we have committed to do and that is what I believe we will do.
Dr Murrison
Apropos the point that has already been rightly made, does the hon. Gentleman really believe that? The Red Book gives a very different story. What we are talking about is RDEL—the resource departmental expenditure limit or day-to-day spend on our armed forces. That means reserves—I am one—not getting their reserve training days, ships that cannot put to sea because of a lack of fuel, no bullets and no exercises. Is that what he wants? What does that say to the brave men and women who populate our armed forces?
Jim Dickson
The situation that the right hon. Gentleman is describing sounds like what pertained for the previous 14 years. We are turning that around.
Since the 2024 election, this Government have demonstrated a clear strategy to get on and fix the foundations of our country, most obviously in public spending, that had fractured under the previous Administration, and that includes defence spending. The Budget is built on long-term investment in infrastructure and crucial new projects. Nowhere is that better illustrated than in my constituency, in north Kent, where the funding for the lower Thames crossing—public funding, supporting big private sector investment of over £10 billion—will make such a difference to Dartford residents once it is complete.
The Chancellor’s announcement that he is expanding support to businesses and infrastructure projects through the National Wealth Fund and the British Business Bank is most welcome, and it has the potential for an investment boost right across the UK. As a tangible, practical example of how investment can make a difference in our constituencies, I commend the spending review that saw the announcement of the structures fund to invest in distressed transport assets across the country that were beyond the capacity of local authorities to repair. In Dartford, we hope to hear that funding has been allocated to repair the collapsed Galley Hill Road, which links Dartford with Gravesend, in the coming weeks.
As the Chancellor made clear, and as other hon. Members have pointed out, another long-term impact of the situation in the middle east is the rise in energy bills, which is likely to affect all of us over this winter. I remain extremely worried about the impact that will have, particularly on the most vulnerable households. Only this week, EDF Energy put out a new forecast that has the average household energy bill rising by more than a quarter, to £2,192 per year in January and potentially even higher in April. Clearly the blame for these price rises should be put squarely on the architect of the conflict between the US and Iran. I welcome all the work that this Government have done since 2024 to begin to transform our energy system.
I welcome very much today’s announcement that standing charges will be removed from gas bills next year, and the additional £100 of support for all those living in homes in council tax bands A to D, which will support over 35,000 households in Dartford over the next year. It may or may not be true, but I heard that Conservative spokespeople were taking to the airwaves following the Budget to say that they opposed the £100 discount. If that is the case, I think it is wrong and disgraceful. However, I hope that Ministers will look further at what we can do to shield the most vulnerable and accelerate the work to break the link between increasingly volatile gas prices and the prices that we pay for electricity.
I have also been among those calling for more support on business rates for small businesses. I am really pleased to hear about the changes that will see many cafés, shops and pubs taken out of business rates entirely, paid for rightly by a rise in machine games duty. I think most of us in this House can support that tax.
In my previous life as a local councillor, I saw the growing levels of homelessness on our streets, as I do now, and the dire consequences for those stuck there. It is therefore right that the Government are putting in place funding for the rest of the Parliament to offer a route off the streets to anyone sleeping rough. We have needed a comprehensive strategy to tackle rough sleeping for the past 14 or 15 years, and we finally have one.
I also support the proposed changes to bring in a first-time buyer ISA to replace the lifetime ISA. I look forward to more details on the Your First Home scheme, which I believe will be a boost to new developments such as those in Ebbsfleet Garden City in my constituency.
I am really pleased to see that the Red Book published along with today’s Budget confirms the formation of either a mayoral or foundation strategic authority for Kent. That is important news for our region. If a foundation authority or a mayor was in place, for instance, they could find the investment to ensure that we bring international rail services back to Kent after they were lost six years ago.
Max Wilkinson
Does the hon. Member think it is right that people in Gloucestershire feel somewhat left out of the devolution agenda? We have been placed on the pause list for local government reorganisation, even though there is local consensus, and we are the only place in the whole of the west and south-west region without a devolution deal, even though there is a consensus on that as well. I say that in the knowledge that a Minister sitting on the Treasury Bench, the hon. Member for Bristol South (Karin Smyth), is from the west of England, and—as I understand it, based on what I hear from local councillors—Gloucestershire would like to have the same as her region. Does the hon. Gentleman agree that Gloucestershire could reasonably feel a bit left out and miffed by what is going on?
Jim Dickson
I believe that the same case is being made strongly to Ministers on exactly that point by Members of all parties, not least Members on the Labour Benches—I have heard it being made myself. That really underscores how important devolution is. Every part of the country needs local powers and the ability to invest, which a foundation authority or a mayoral strategic authority gives. I wish the hon. Gentleman good luck with that, and I hope that it is made available to Gloucestershire as soon as possible. Devolution remains the right thing to do from both an economic and a democratic perspective, bringing decisions closer to people and giving our regions—Kent, in my case, but there are others across the House—more power over our future.
I believe that residents in Dartford will welcome the measures in this Budget, not only for the short-term relief that they bring, but for the promises to keep our economy growing in a sustainable way into the future.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Let me respond to the hon. Member for Dartford (Jim Dickson) in one respect. Harwich and North Essex is a very rural constituency, and any restraints applied to gas or electricity have limited effect, because a lot of my constituents in rural areas are on kerosene and heating oil—I confess that I am on heating oil. The Government have not even removed VAT on domestic heating oil. Why are the Government doing this pre-election council band A to D manoeuvre, which will benefit mostly their voters, but completely ignoring the interests of rural voters?
Forgive me if I detain the House a little on defence. We are in exactly the same position that we were in when the previous Defence Secretary resigned under Keir Starmer. In fact, the Chancellor said that he set a target date of 2030 for 3%. That is the same target as when the then Prime Minister appeared before the Liaison Committee. The Chancellor said that
“I am getting work under way to get there in a fiscally sustainable way.”
That was the reason the now Chancellor resigned from the Government, so what was that all about? It was obviously not about defence, because nobody can make any plans until the Treasury has signed off figures for increased defence spending, and it has not done so. It is still not going to sign them off until the public spending review, which may be after the next general election.
I am sure that Labour Members know that the next general election is going to be pretty tough for them. Their very large majority was a bit of an electoral accident, so many of them will lose their seats, but they can trust the Prime Minister, because he said on 25 September, “Don’t worry, the election will be in 2029”—just as he said, “We’re not going to reopen all the arguments about rejoining the EU” and, “We’re not going to reopen the argument about free movement.” Hon. Ladies and Gentlemen in difficult seats facing a difficult election next spring can absolutely trust the Prime Minister; he is not going to do that to them. Trust is rather important in a political party. I hope it is not getting too bad within Labour.
Let me say what I really think about this Budget. It is a non-Budget, exactly as my right hon. Friend the Leader of the Opposition and others have said. It is a breathing space. Another £2.2 billion of new taxes on business is by far its biggest effect, and the impact of the two previous, absolutely catastrophic Budgets remains embedded in Government policy. They hammered sectors such as hospitality, and businesses that used to enjoy employing a lot of young people can no longer afford to do so. Take Rix, a farm business in my constituency that is the leading supplier of potatoes and onions to Tesco. It employs mostly low-paid workers—a lot of young people—and its costs have rocketed as a result of the change to national insurance contributions.
Take the Cricketers in Eight Ash Green, a pub that has been virtually driven out of business by the increase in national insurance costs and business rates. By the way, there has been no cut in business rates—this Government put them up. I am very pleased that they have responded to the Conservative campaign to increase the exemption, but as we have just heard from my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), it is a very slight change. As has also been pointed out, all of these 59 micro-measures are minute. What the OBR actually says about national insurance contributions is that
“Sharper falls in employment among lower-paid sectors are consistent with our judgement that these firms would be most affected by the”
increase in national insurance contributions. That is the truth, and the Government have not faced up to it.
On the question of the real public expenditure outlook, let us look at the section in the OBR’s outlook that deals with welfare spending—the Chancellor is announcing £100 million here, £200 million here or £10 million here, but this is the real problem. Paragraph 5.21 says:
“Welfare spending is forecast to rise…by £19 billion (5.7 per cent) to £353 billion or 11.1 per cent of GDP… It is then forecast to rise in nominal terms by an average of £16 billion (4.4 per cent) a year over the rest of the forecast period”.
That utterly dwarfs any other figures that the Government have been talking about.
“This would be 1.3 per cent of GDP higher than its pre-pandemic level of 10.1 per cent of GDP in 2019-20, with 0.5 per cent of GDP of this increase occurring between 2025-26 and 2031-32.”
The Government are still spending on welfare, and they are not committing to spend on defence. That is the reality of this Budget.
Sir Bernard Jenkin
I beg the hon. Gentleman to listen to himself. What he is basically saying is that the reason there will be such gargantuan increases in welfare payments between now and 2031-32 is that it is all our fault—that it is because of what we did. [Hon. Members: “Yes!”] It is not. The Government have not begun to tackle the welfare state problem. We should have done; and they must do so, or we are heading for a fiscal crisis. It is interesting what the Red Book says about the forthcoming fiscal crisis.
Iqbal Mohamed
Will the hon. Gentleman share his assessment of the impact of increasing the retirement age to 66 and 67, with a target of 70, on the availability of junior jobs for young people to get into work?
Sir Bernard Jenkin
If the hon. Gentleman is saying, “If only we were not doing this later retirement thing, there would be more jobs for young people,” I have to say that managing the economy in that way is not very successful. It does not work.
On the forecast, the Government set great store by what the IMF says about the UK’s deficit reduction programme. The Red Book states:
“The IMF forecasts that the UK’s deficit reduction this year will be bigger than any other G20 country.”
I am afraid that there are a lot of lemmings rushing over cliffs in that G20 bloc. It is not a good benchmark for success. In any case, the forecast is based on the forecast that the Government have given to the IMF, and the reduction has not been delivered yet. The Government have not started to deliver the debt reduction programme. The OBR says that debt rises from 95.5% of GDP this year to 97.3% in 2028-29. The headroom is just £15 billion in 2029-30, which is £7 billion less than at the last Budget. The OBR says there is only a 56% chance of meeting the rule. As the bond markets digest this Budget, I am not sure they will be quite as sanguine as they have been.
I will end by responding to a point that we heard from the hon. Member for Hornsey and Friern Barnet (Catherine West). She talked about us getting back into the European Union and said that 60% of the economy is dependent upon trade with Europe. That is rubbish. What proportion of GDP do we export to the EU in goods? The single market is about goods. Incidentally, our record on services exports outside the EU is that there has been a dramatic, massive increase.
Sir Bernard Jenkin
No, I will not give away. Only 5.9% of the UK economy is goods exports to the EU. A much larger proportion goes outside the EU. Incidentally, during our period of membership, the proportion of GDP that we exported to the EU was in steady decline from 1992 to 2021. Other factors have led to the decline in our exports with the EU.
Overall—this is the astonishing thing, and I will end on this point—our economy has outgrown France and Germany since 1992. Leaving the EU has not reversed that trend. I wonder whether Government Members do not understand the irony when they say, “We are the fastest-growing economy in the G7.” That has often been the case, because the EU is not a very efficient market and does not add much value to our economy. In fact, we have grown our exports to the rest of the world.
Sir Bernard Jenkin
No, I am not giving way; I have given way twice. [Interruption.] Members may shout me down, but they do not want to hear the facts. The fact is that our economy is now growing faster outside the EU than it would have done, because of two sectors: financial services, and tech and AI. They are not regulated by the EU. Employment in the City of London has doubled since 2016. All the doom-mongers who told us that the City was finished were wrong.
Andrew Lewin (Welwyn Hatfield) (Lab)
This is a Budget that supports those who need it most through the winter and that ask the banks, which are on course to make record profits, to make a greater contribution. Crucially, it backs young people with the ambition to own their own home and to build a business.
There is lots to reflect on. As the newest member of the Treasury Committee, I intend to get into the detail in the weeks to come, but I will start with the international context. It is crucial that we have an honest debate in this House and in the country about the impact that context has on all of us. It is true that we are spending billions more on debt interest than was projected just a few months ago, but that is not because of extra borrowing by this Government; it is because of the global spike in inflation caused by the war in the middle east. It is also the case that the IMF has praised our Government for taking decisive action on deficit reduction. However, in the 21st century no country and no economy can stand alone.
Mike Wood
The hon. Gentleman will be aware that a key part of the deficit reduction strategy—according to the Red Book—is a reduction of 2% a year in the annual spend on mainstream schools after 2028-29. Will he go into the next general election promising that in his manifesto?
Andrew Lewin
It is news to me that I will be writing the manifesto, but I am always open to a promotion. Our spending review will cover all elements of spending on public services, but this is a Government who have backed public services, unlike the Conservative party.
In a more uncertain world, it is imperative that the UK lives by our values. I have been going through the Red Book, and—this is on page 103—the single biggest increase in investment announced today is in our defence, to fund the defence investment plan. That is a very important statement of intent at such an uncertain time for our country, Europe and the world, which is further demonstrated by the package of £10 billion for additional support in loans to Ukraine.
Before the Budget speech, I was pleased to hear the Prime Minister reassert how important it is to him that we have a stronger economic trading relationship with the European Union. Also—I will be honest—I am slightly pleased by how much it upset the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), because that means we are going in the right direction. It is a sad state of affairs that the Conservative Party has drifted so far away from mainstream business opinion that they are saying they will not countenance any improvement in our deal with the European Union. That is why people in areas such as mine, Welwyn Hatfield in Hertfordshire, are no longer voting Conservative.
Graham Stuart
It is not that we do not wish to see a better deal with the EU. After we left, every day in government was about trying to get the EU to be more reasonable, and that is always a good endeavour. I think the fear—the hon. Gentleman would probably recognise this—is that we have a Government who thought it was a good idea to negotiate the giving away of British sovereign territory somewhere far away and then pay tens of billions of pounds for the privilege. They are not the people we want representing us in Brussels, are they?
Andrew Lewin
I think the right hon. Member is talking about the issue of the Chagos Islands, which has absolutely no bearing on the speech that I am making today, but if the Conservative party wants to hold to its position that the current deal with the EU is a good one, I will take that debate any day of the week.
Andrew Lewin
I will not give way now, but I may do so later. [Interruption.] I am keen to make some progress.
Closer to home, in Welwyn Hatfield, 35,000 households will benefit from the £100 direct payment to help with energy bills this winter. The ending of standing charges on gas bills will particularly help those in smaller homes and flats, and it is unquestionably the right thing to do. I was also pleased, earlier in the week, to see the announcement about the warm homes plan, with low and zero interest rate loans for people who are able to make energy improvements to their properties, and cheaper public charging for electric vehicles. That is an all-round energy package that I believe we can support.
Let me now say a little about the national health service, which has not featured in the debate as much as it might have. Waiting lists have fallen sharply since the election of this Government, and ambulance response times in my region in the east of England have improved markedly in the last year. There is a great deal more work to do—there is no question about that—but this improvement has only been possible because of the investment made in this and previous Budgets. It is striking that £37 billion more is being spent on the NHS under this Government than was spent by the Conservatives.
Dr Danny Chambers (Winchester) (LD)
It was slightly disappointing that the Budget made no commitment to restoring the mental health investment standard. There is an economic imperative in that as well. Millions of people are on waiting lists for mental healthcare, but if we could get them off waiting lists and back into work, that would help to grow the economy. Does the hon. Gentleman agree that we should restore that mental health investment standard?
Andrew Lewin
Mental health support is hugely important—I absolutely recognise that. One of the things that this Government are doing is introducing mental health professionals in every school. I am sure that Members from across the House have had conversations with constituents and seen young people struggling terribly. There is more to do, but we are making progress.
Andrew Lewin
I am going to make some progress.
Today the Chancellor has asked the banks to contribute more via a surcharge, and it is really important that we look at the context in which we are having this discussion. I looked at the figures, and all the major banks that operate in the UK are on course for record multibillion-pound profits. That often happens in cycles in which there are high interest rates, so it is the case that banks can make a contribution via the surcharge and still have an exceptionally good year.
I have to say that I am surprised by the Conservatives. If they want to have an election, whenever it may come, in which they go around saying, “We oppose a slight increase in the surcharge on the banks,” they will find themselves on the losing side of that argument.
In the years to come, we need our entrepreneurs and young people to succeed, which is why I was so pleased to learn of the founders’ relief scheme for British entrepreneurs this afternoon. It is a statement that we will back people with the vision and ambition to build a business here.
I will let you in on a secret, Madam Deputy Speaker: the first conversation that I had with our new Prime Minister in Parliament—actually, the first one was about cricket, but the second was more substantive—was about housing and home ownership. I said to him directly that it is so important that we as a Government make the case for giving people the opportunity to get on the housing ladder, especially those who cannot rely on support from the bank of mum and dad. That is why I am so pleased by the announcement of the Your First Home equity loan scheme this afternoon. It has the potential to change thousands of lives in my constituency and many more across the country. The introduction of a 2.5% deposit means that people living in Hatfield or Welwyn Garden City have a chance of getting on the housing ladder with a deposit well under £10,000, bringing it into reach for many more people.
Iqbal Mohamed
I welcome the Government’s announcement that they will reduce the deposit for first-time buyers. Does the hon. Gentleman agree that the price of housing is so extortionate that, on today’s average wages, someone with a 25-year mortgage will never, ever pay off the debt accrued? Mortgages will end up lasting 30, 40 or 50 years, and young people who get on the housing ladder will end up paying for the rest of their lives. They may not have paid off their mortgages before they retire.
Andrew Lewin
The housing crisis is a multifaceted problem. We have to build more homes of all tenures, but Your First Home is a really important part of driving demand, particularly because young people who are renting at the moment are paying more than they otherwise would if they could get a foot on the ladder. That is why the deposit scheme will make such a difference.
If you need extra support with energy bills this winter, it is coming. If you run a small high street business, business rates are coming down. If you are an entrepreneur, risk will be rewarded and your tax bill will come down in the future. If you are striving to buy your first home, this Government are on your side. The world remains unstable and we are not immune to it, but this is a Budget that I believe can give confidence to people in Welwyn Hatfield and across the country.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. After Sammy Wilson, there will be a five-minute time limit.
Sammy Wilson (East Antrim) (DUP)
The advantage of this House is that the Chancellor has brought forward a Budget, albeit one that is inadequate. In Northern Ireland, we are seven months into the financial year and the Sinn Féin Finance Minister has still not brought forward a budget for Departments in Northern Ireland, leaving people in the dark as to what money is available for health, education, roads and all the other issues. I welcome the fact that in today’s Budget we have got a £270 million uplift as a Barnett consequential, as well as the £750 million that was available under the review, and I hope that that will stop any further excuses for not having a budget declared in Northern Ireland.
As far as the measures in this Budget are concerned, there are some that I welcome, although I think the Chancellor should have gone further. I welcome the fact that some pensioners at least will not be dragged into paying tax. I also welcome the support for people with their energy bills—although, as for other Members representing rural areas, 60% of people in Northern Ireland will not be impacted by it. They heat their homes using oil, and therefore will not be covered by the relief that has been made available. I think small businesses will appreciate the increase in business rates relief, although it is up to the Northern Ireland Executive as to whether they pass on those changes to businesses in Northern Ireland. The freeze on fuel duty is also welcome.
However, in a place in the United Kingdom that depends greatly on road transport for both getting goods in and getting goods out, the price of fuel is prohibitive. Given that the Government have made billions from the additional VAT on fuel as a result of price increases, I believe they could have gone further.
Jim Shannon (Strangford) (DUP)
My right hon. Friend has rightly outlined the issue for hauliers in Northern Ireland, where we have to transport everything in and everything out. Does he also recognise that farmers—for instance, with tractors—as well as the farming community and the agricultural sector, also need to be considered when it comes to such help and provision?
Sammy Wilson
Of course, any of the big diesel and petrol users would have benefited from greater support from the Government.
On the big challenges that the Government are facing, and which they admit they are facing, there has been very little in this Budget. First, if we are going to get out of many of our economic difficulties, the main issue is to have economic growth. While much has been made today of the micro policies that will affect businesses and encourage entrepreneurs, the fact of the matter is that we are stagnating because we are taxing the life out of businesses. We have the highest tax burden ever, and businesses tell us all the time that the tax on employment stops them recruiting and that the tax on profits stops them investing. If we are going to have economic growth, we must address the issue of the overall burden of taxation, but that has been studiously avoided in this Budget. I am thinking of the farming industry in Northern Ireland. Only yesterday, I met the Ulster Farmers’ Union, which told me that 90% of farmers have now stopped investment plans because of the inheritance tax fears, and I suppose that is true in many other places. With taxation halting people’s investment decisions, that will of course have an impact on economic growth.
Secondly, we have to reduce the debt, yet the Chancellor has told us today that we will actually be borrowing more year on year over the time of this Budget. If we are borrowing more, we are adding to the debt, and if we are adding to the debt, we are adding to the interest we pay on that debt. The Chancellor has even accepted today that £14 billion extra will be required this year just to pay for the increase in the interest we have to pay on the debt. As we continue to borrow, we are not going to get that debt down, and as we do not get that down, we have to tax to pay the interest on it. Again, that has an impact on economic growth, and there does not appear to be a willingness to address it.
Sam Carling (North West Cambridgeshire) (Lab)
May I draw the right hon. Member’s attention to page 22 of the Red Book, which states:
“The IMF also forecasts that the UK will deliver the biggest reduction in borrowing in the G20 between 2025 and 2031 and will have the second lowest government debt in the G7 by 2031”?
Sammy Wilson
We may be improving in relation to other countries in the G7, but the fact of the matter is that we still have a level of debt that, as the Chancellor has said, is absorbing more and more of our tax revenue to pay—and that is to pay only the interest. We are borrowing more and we are adding to the debt.
Thirdly, we have to reduce energy costs. Today’s announcements mean that we are going to shift some of the burden of the policies that have added to the cost of energy in the United Kingdom.
One of the biggest costs has been the Government’s net zero policy, because it has required investment in wind energy, 25-year commitments to paying premium prices for that energy, and increasing the grid network to bring that energy from dispersed sources, as opposed to the single power stations we used in the past. All of that goes on to energy bills, yet the commitment in the Budget today is to continue with that policy. On the one hand, the Government want to reduce people’s energy bills, but on the other hand they continue with a policy that has increased, will increase and will require infrastructure spending that will further increase energy bills.
The next big issue, of course, is defence spending. What have we got, despite the urgency to increase defence spending? We are going to have the review next year and we are going to have a taskforce, but we are not going to address the issue of spending more now. I understand why, because the Government are not addressing, in the first place, the issue of how we get in more revenue to spend.
The last big issue is the welfare bill, which has been well aired in the debate today, and how it is increasing day on day. As the Chancellor said, the increase in the welfare bill and the way we do welfare is condemning a whole generation to no work—to not working, being on benefits and being reliant on benefits—and it is taxpayers who are having to pay for that. Yet that issue has been pushed aside with the Government saying, “Next year, we’re going to have a White Paper”, etc.
The problem is this. We have a Government who know what the problems are. They talk about the problems in this House and they talk about them to the general public, but despite the fact that we have a Government with a majority of 170, they have still been unwilling to take the hard decisions to address these issues. Unfortunately, it seems that we have a Government who, instead of a backbone, have a wishbone. They wish certain things, but they do not have the courage to take the decisions to sort the problems out.
Cat Smith (Lancaster and Wyre) (Lab)
It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson) and to speak again in a Budget debate.
Often in debates on the Budget, I have heard announcements, as a Lancashire MP, about pots of money that my area has not been eligible for because we do not have a devolution deal, so I was really pleased to see in today’s Budget that we are now in the final stages of agreeing a devolution deal in Lancashire for a mayoral strategic authority. That opens up the opportunity for my constituents to have the same options as the rest of the north of England, which already has these deals. The indication is that Lancashire will now be able to access good growth funding worth £7.27 million, which will unlock prosperity in my constituency and right across the red rose county.
Leigh Ingham (Stafford) (Lab)
As the MP for Stafford, Eccleshall and the villages, right in the heart of Staffordshire, I too welcome the devolution announcement today. It means that, in contrast to the chaos we are seeing at Reform county council level—we are on to our fourth leader this week, if anyone is keeping count—residents in Stafford will be able to access that devolution funding. Does my hon. Friend agree that putting the power into community’s hands to direct their own future is central to making sure that we have good growth in every postcode?
Cat Smith
I do agree with my hon. Friend, and I wish her well in Stafford with the situation at her local council.
I urge local leaders in Lancashire to get this deal over the line. I hold my hands up and confess that I was perhaps the least enthusiastic of the Lancashire MPs when it came to the prospect of having a mayor, but I recognise that, without that, my constituents will be left behind. Therefore, we all need to work together in Lancashire to make sure we can access this funding.
The biggest issue my constituents raise with me— I was recently out doing street surgeries in Scale Hall in my constituency and was approached by several people who raised this same issue—is energy bills, so I suspect my Scale Hall constituents will be particularly pleased to see the £100 energy support payments, which should benefit over 37,000 households across Lancaster and Wyre in council tax bands A to D. On top of the extension of the 0% VAT on electricity bills until June next year and the abolition of the standing charges on gas, that will come as welcome relief to families right across my Lancashire constituency.
I regularly meet the business community, and recently met representatives from the Lancaster business improvement district, who made the case to me about the challenges facing the retail and hospitality sector. I am pleased to see the retail, hospitality and leisure business rates freeze, which is estimated to benefit 638 properties in Lancaster and 640 properties in the Wyre council area of my constituency—hundreds of businesses in my constituency will benefit.
Constituents have also raised with me the challenges on the high street. Increasing small business thresholds and removing eligibility for vape shops and adult gaming centres will go down really well with my constituents. I welcome that; it will mean that high streets, like those in Garstang and Lancaster, will thrive and be places where people want to spend time and money supporting our great local businesses.
There were also announcements in the Budget to cut fertiliser tariffs to give farming businesses more room to breathe. That will certainly go down well with my farming constituents. The rise in fuel prices is disproportionately affecting users of red diesel, so Lancaster and Wyre farmers will welcome the extension of the 3.7p cut to duty on red diesel for a further six months. That keeps the rate at its lowest level for 20 years.
My final contribution to this debate is about a missed opportunity. The economic cost of alcohol harm in England is estimated to cost us £27.4 billion annually. That includes costs to the NHS, the justice system, the wider economy and social services. The financial burden on the NHS alone stands at £4.9 billion, which is enough to pay the salaries of almost half the nurses in England.
The culprit is the very strong, very cheap alcohol that is available everywhere in this country, from supermarkets to corner shops—and increasingly from the delivery services that will deliver it to the door, day and night. This situation often makes vulnerable people drink far more than is safe and creates the ideal conditions for escalating alcohol harm. That harm that can be reduced by introducing minimum unit pricing—something that is already in place in Wales and Scotland, and has seen reductions in harm there.
Millions of people are consuming alcohol at levels that increase their risk of serious health conditions. The severity of harm rises as alcohol consumption increases, and cheap alcohol drives higher consumption. At a time when the NHS is under immense pressure and health inequalities continue to widen, there was a significant opportunity today for the Government to have taken an evidence-based approach to tackle alcohol harms. That approach makes economic sense and would rapidly improve public health and save lives.
I want to stress that minimum unit pricing does not damage pubs, restaurants or the wider hospitality sector. It is specifically designed to target the cheapest, strongest alcohol sold through supermarkets and off-licences—the products most associated with serious alcohol harm. We have to remember that alcohol-related deaths have remained high since the pandemic; they have not been coming down. I believe that we need to take radical action. Introducing minimum unit pricing would benefit the economy and save lives. The measure has support across the hospitality sector, which recognises the distinction and sees cheap off-trade alcohol as a broader market concern.
I leave the Front Bench with the concerns that I have around not addressing alcohol harms, and the benefit that minimum unit pricing could have for the economy and public health. I welcome the Budget overall. It offers breathing space for my constituents in Lancaster and Wyre.
Stuart Anderson (South Shropshire) (Con)
It is interesting to follow the hon. Member for Lancaster and Wyre (Cat Smith), who started by talking about not having a mayor, and then how getting a mayor will open routes to funding. In South Shropshire, we do not have a mayor, and we are not looking to get one; most of what was said today excludes areas like mine that do not have local mayors. That is a big issue. I would categorise this Budget as one that fails rural communities and does not protect our nation, and I will back that up by outlining why.
I will start with the gambling tax. Ludlow racecourse is in my constituency, which Members will obviously all agree is the best in the country; along with the point-to-points, like Bitterley and Eyton races, Ludlow is really going to suffer from the gambling tax. It will have a massive impact, and there is a whole ecosystem around racecourses.
Let me turn to heating oil. As 53% of my constituents are not on mains gas, over half over my constituents will not benefit from those announcements in the Budget.
Alex Ballinger
A few people have mentioned heating oil in the debate. For those who have not looked at the detail of the Budget, there is a 4% reduction in heating oil tariffs among the announcements, and anyone who uses heating oil this winter will be getting £100. There is substantial support for people using heating oil; it is not just about gas.
Stuart Anderson
The price of heating oil is more than double what it was six months ago. I understand that that is because of international headwinds, and I believe that prices will probably go up significantly again because of what will happen over the next few weeks. However, 53% of my constituents do not feel that the support they are getting is comparable to what residents on gas are getting.
Let us look at pubs. The 166 pubs and four great breweries in South Shropshire tell me that the various rate rises they have seen over the past few years are having a massive impact on them. The minimum wage makes it very hard for them to employ young people, whether to give them their first step on the jobs ladder or because they want to earn extra money while at university. It is getting very hard.
Jerome Mayhew (Broadland and Fakenham) (Con)
My hon. Friend is making a very good point. I wonder whether he is aware that since the last election, the minimum wage for 18 to 20-year-olds has risen by 30.1%, which is coincident with youth unemployment rising by 54,000. Does he think there is a link?
Stuart Anderson
My hon. Friend raises a valid point. There is definitely a link; it is getting harder to employ people because businesses are not making a profit.
In my high street survey, to which 4,500 residents contributed, businesses said that it is harder to make a profit on the high street. We have seen the rise of the internet alongside increases in taxes and the cost of employing people. Businesses are not investing—they are not taking the risk. Look at how hard the Government have made it for high streets. The Lib Dem council in South Shropshire decided to bring in what look to be catastrophic parking charges for Ludlow and Bridgnorth, and across the whole area. I stand firmly against those charges, because they are just another tax on my constituents.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Given that he raised the issue, could the hon. Gentleman set out by how much he thinks the minimum wage should be cut?
Stuart Anderson
I do not think the minimum wage should have gone up by 3.9% or 3.4%—whatever was announced today. I believe it should have been frozen for many years, or for several years. I definitely think we should have left it; I do not believe it should rise, because businesses cannot take it at the moment. We have to make firm decisions. Fewer young people will have work because of these rate rises.
I will turn to farming. The Chancellor spoke for an hour and a half, and there was not one thing about agriculture. Some 25% of my constituents work in agriculture, and the failed SFI26 window was a serious issue. Rural communities really do feel left behind. We have seen an attack on our rural communities, from the shotgun consultation to trail hunting—all those issues are vital to my constituency. This is huge. I think my constituency has the second highest number of shotgun licences in the country. It is a serious sport that is undertaken widely. There is just a continual drip, drip, drip of these policies.
I will finish on defence. The Chancellor resigned when he believed that defence was not funded well enough. In this year, there is a £3.5 billion cut, with a £1 billion cut in each of the next two years—that is in the RDEL figures on page 145 of the Red Book. That means that defence is now getting less funding than when the Chancellor resigned. The target to get to 3% by 2030—[Interruption.] It is! It is on page 145. Look at the in-year cuts. Look at the defence industry’s response to the Budget.
Stuart Anderson
I will not take any more interventions— I have already taken two.
Look at what the industry, from ADS across, is saying about these cuts.
Last week, the House found out that two or three Boxer projects were cut. We found out that DragonFire might not be on the Type 45s next year, as planned. We found out that there are training cuts that happen to have an impact on operational capability. We found out that there is a cut to single living accommodation. Does anybody seriously think that we are funding defence? We are nowhere near doing so.
When we were in government, I had many conversations saying, “This does not work,” and I publicly put it on record with the rest of the Defence Committee. We were facing serious issues, and we were not funding defence enough. I am very happy to say that. The strategic defence review set out almost 18 months ago that we face the most serious times since the cold war—though I believe it is since the second world war. Out of the NATO countries, only Iceland is rearming more slowly than us and it does not have a military.
I travel a lot within NATO countries, and I have been called out to speak on behalf of the UK by other countries’ Defence Ministers. I fed that back to the now Chancellor and he said, “I know; it is embarrassing.” On the international stage, we are nowhere near where we should be. Our approach to defence is seriously failing. This Budget fails rural communities and it fails defence.
Ms Julie Minns (Carlisle) (Lab)
I regard this Budget through two lenses. First, as the Labour Member of Parliament for Carlisle, I am asking what the Budget means for the people, families and businesses that I represent. Secondly, as a member of the Treasury Committee, I am examining whether these measures will strengthen our economy over the long term. I judge the Budget against four tests. Does is it improve the lives of working people? Does it strengthen the British economy? Does it make the UK a more attractive destination for inward investment? Does it help the north?
When assessing any Budget, economic stability must come first. Before entering Parliament—contrary to the view held by some Opposition Members—I worked for businesses that were backed by one of the UK’s largest inward investors. What investors look for is not political knockabout, the likes of which we have sadly heard from those Opposition Members this afternoon, but stability, credibility, infrastructure, skills and a credible long-term plan. On that test, the Budget passes.
Despite global instability, Britain recorded the joint fastest growth in the G7 in the first half of this year, while business investment has risen by 7.5% since the start of this Parliament. The Government continue to meet their fiscal rules, maintain a buffer against future shocks and put borrowing on a downward path. That matters because without stability there can be no sustained investment, no lasting growth and no durable improvements in living standards.
My second test is whether the Budget strengthens Britain’s attractiveness as a place to invest. This Budget backs investment in innovation, skills, infrastructure and artificial intelligence while continuing to support businesses with lower regulatory burdens and greater certainty. Those are exactly the ingredients that international investors look for when deciding where to place their capital.
My third test is whether the Budget improves the lives of working people. Ultimately, growth is not a statistic. It is about whether people feel more secure and have greater opportunity. That is why I welcome the extension of the fuel duty freeze and the 5p cut, which will help motorists and businesses across rural constituencies such as mine. I welcome the permanent increase in tax-free mileage rates, which will help care workers, community nurses and tradespeople who rely on their vehicles every single day. I welcome the expansion of parental pay, including to self-employed fathers and partners.
My final test is whether the Budget helps the north. Economic success cannot be measured solely by what happens in London. It must be measured by whether places like Carlisle share in that success. That is why I particularly welcome the Government’s commitment to devolution and look forward to electing Cumbria’s first mayor next year. I trust that they will be a Labour mayor.
We have in Carlisle ambitious businesses, skilled workers, a strategic location and enormous potential. We have a high street already on the up—one that will be further strengthened by the cuts to business rates. We have great local independent breweries. I welcome not only the £10 million boost in small producer relief but the introduction of a guest beer agreement in England that will ensure that the local breweries in my constituency are able to get their local product into our local pubs.
The Government’s approach to devolution, alongside good growth funds and greater local control, offers an opportunity for communities such as mine to play a greater role in the country’s success. This is a Budget that provides support for households today while laying the foundations for long-term growth. It recognises that when places like Carlisle succeed, the north succeeds—and when the north succeeds, Britain succeeds.
Kit Malthouse (North West Hampshire) (Con)
It is a pleasure to follow the hon. Member for Carlisle (Ms Minns), although she will not be surprised to hear that she and I have very different views about the Budget. I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a business owner and, frankly, to my interest as a father, although that is not because I think I am going to be particularly affected—I do not think anybody will be particularly affected by this rather bland bowl of muesli of a Budget from a Chancellor who was quite obviously decaffeinated this morning.
I am quite exercised about the Budget because, while a number of colleagues have said it is a missed opportunity, I think it is a lot worse than that. In many ways it is profoundly negligent of a Government to produce such a Budget in the face of three distinct emergencies—three distinct fires burning in the basement of the British economy—some of which have been made worse and are forecast to be worse because of the Budget.
The first of those, which a number of hon. Members have raised, is our debt. It is worth remarking, as some have, that the OBR has said that we will borrow even more in every year of the forecast—particularly next year. Combined with the massive downgrade of growth for next year, that is alarming. It is worth colleagues remembering that the OBR has quite a poor record in medium-term forecasting—it is generally optimistic. We can broadly agree that it gets the year 1 forecast right, plus or minus, but after that it is wildly optimistic, and every year it get the forecast completely wrong, particularly on debt. That matters, because the country is effectively running a structural deficit at the moment, and because of some of the measures in this Budget and the previous two, the public sector is basically eating the private sector every year we proceed. The private sector’s ability to support the public sector is reduced as a result, and we find ourselves caught in a weird kind of vice, exacerbated by the second emergency, which I will come to.
Even in some of the measures today, there seems to be no contemplation of that problem. Who does the Chancellor think will pay the bank levy—this 3% extra on corporation tax? Certainly not the international banks—they will manage to retain their return on capital. It will be the businesses, and the consumers who bank with them, who will see higher mortgage rates and higher interest rates on their loans. That money will be extracted from the private sector and sent directly to the public sector to be spent. If we continue on this path, I am afraid that the IMF has forecast that by 2050, well over half our GDP will be spent by the Government. That is a disaster, because once in that vortex it is hard to come out of it.
The second emergency, which is exacerbating the first—there was no talk of it today and, in fact, there were no measures to try to help with it—is our demographic problem. I am afraid we are not having enough children in this country. We are now down to 1.39 children born to every mother, which is below replacement rate, so we have a shrinking body of workers who are having more and more difficulty supporting an expanding body of retirees. The pyramid is inverting, as we have seen in other countries, such as Japan, to disastrous effect. If the public sector and the retired sector suck more and more money out of the private sector, we will find ourselves in a downward spiral, which will be much to our detriment.
The third emergency is one of capital. The Chancellor raised the issue of capital and spoke of trying to set entrepreneurs free. I have been a moderately successful entrepreneur during my life, and I can tell hon. Members that nothing in the Budget has done anything to reverse the assault on the return on risk that, sadly, has taken place over the last 20 years under Governments of all stripes.
Kit Malthouse
I am glad that the hon. Gentleman has raised that point. If he looks at the founders’ relief in the scorecard and puts it against the reduction in business asset disposal relief, he will see that effectively there has been a straight transfer of value from family businesses, high street shops and smaller businesses to the tech bros who are going to benefit from founders’ relief. We have yet to see the detail on that relief, but the scorecard shows a net cost to the Government of about £200 million. That is negligible in the face of an economy the size of ours.
That is a real problem, because we are standing at the bottom of the ellipse of human achievement, the like of which we have not seen since the industrial revolution. This country has got its capitalism wrong in the past. We missed the IT revolution of the ’80s and ’90s because we were too busy worrying about house prices. British capital has kind of stultified and failed to take advantage of these massive advances in technology, much to our detriment in terms of national wealth.
We still live off, to a certain extent, the wealth that was created during the Victorian era. Many of our largest companies came about because of British capitalism—naked capitalism—during that era. The palaces we live in, the Cavendish Laboratory at Cambridge, King’s College, Cambridge, and the NHS—all of that built from the profits of British capitalism. We have neglected it over the last 20 years or so, particularly by attacking the return on risk. The rise in taxation on dividends, the rises in capital gains tax, the reduction in any kind of relief for entrepreneurs, and the complexity of the enterprise investment scheme and the seed enterprise investment scheme—all that is a massive deterrent to anybody who wants to start a business and take a risk. Until we realise that we will not get growth until we set capital free, we will continue to be trapped in this vortex of a demographic pyramid inversion and ever-mounting debts as the public sector consumes the private sector.
The last thing I want to raise is the new powers that are being granted to the Revenue. All Members should beware of what is hidden in the detail of those new powers. We are getting to a situation where our economy is existing to support the Revenue rather than the other way around.
Chris Evans (Caerphilly) (Lab/Co-op)
Thank you, Mr Speaker, for coming especially to hear my speech; I am most grateful to you.
We have seen the rise today of a new political philosophy. It is called miserablism. They are so miserable about everything. The Chancellor could have stood at that Dispatch Box and said anything—he could have awarded £1 million to every single person in the country—and still the Opposition would have complained, because all they ever do is talk about prescription, rather than what they would do instead.
When I first came into this House, all I ever heard about was deficit reduction. I heard Members who have spoken today say, when we were on the Opposition Benches, that we should apologise. We hear no such apology now. The very tenet of miserablism is to ignore the good news, such as the fact the deficit is coming down. The Chancellor has said that we will be back in the black within three years, despite economic headwinds that we have no control over in Ukraine and the middle east. The fact is that, on the ground, people are seeing the change.
I will talk about three things in the limited time I have. First, on small businesses, my constituency is full of independent small businesses run by hard-working, innovative people. They add to our vibrant high streets and town centres, creating a sense of community. Small businesses will find it easier, thanks to this Budget, to serve their communities and provide local jobs. The increase in the threshold required to pay business rates, from £12,000 to £18,000, will lift 70,000 properties in the UK out of paying business rates and will help so many businesses in Caerphilly.
If anybody wants to see the good news in Caerphilly, just look at what has been happening in Caerphilly borough, which in September was announced as having the fastest business start-up rate in the whole of Wales. Caerphilly has experienced a 49% increase in business start-ups during the first eight months of this year compared with the same period last year. That is a testament to Jamie Pritchard, the leader of our Labour-controlled council.
People want to come to Caerphilly to do business because they believe in what we are doing there. Alongside that, the UK Government are channelling investment into south Wales, which has helped to unlock £23 million for Norgine, a leading European pharmaceutical company in my constituency, to develop its Hengoed facility, which is expected to create 44 new jobs.
If I was going to talk about one thing that does affect most people—if I had to take a straw poll in my constituency—it would be energy bills. Extending the VAT cut to July will help so many people. Not just householders will benefit from that. I remember visiting a business in my constituency, Rees Gym, which was worried about energy costs. The new British industrial competitive scheme will cut costs there as well. Gas standing charges will be removed from household bills. There will be a payment of £100 into people’s bank accounts if they are in council tax bands A to D, and the Plaid Cymru-led Welsh Government have already said that they will honour that in Wales, although they have also complained about some sort of cut. Miserabilism has found its way across the channel as well.
I also want to say something about the miners. I come from a mining family. My grandfather was a miner. He was buried under three tonnes of coal and was invalided out of the mines. He was an example of the hundreds of thousands of people who built our society and who sacrificed their life and their health to keep this country moving. That is why I am so pleased that 100% of the surplus of their pensions will now go to them. It is only the beginning, and yes, we need to talk about future bonuses, but I am heartened and I genuinely believe that the Chancellor is a good man. He comes from working-class stock, as I do. He will speak with the National Union of Mineworkers and we will come up with a deal that will be satisfactory to all sides. I want to say to all those ex-miners who live in my constituency: we are on your side, we hear what you are saying and we will continue fighting for you until you get the justice you deserve.
Finally, in the last couple of seconds, I want to talk about defence. It is all very nice and warm to say, “Let’s hit 3.5% of GDP by 2030”, but that only scratches the surface. I am looking at the right hon. Member for South West Wiltshire (Dr Murrison), who was a Defence Minister; he will know the same things that I know. The Ministry of Defence is a uniquely failing Ministry. It is wasting money. If we want an example, let us look at Ajax. The MOD has already spent £5.5 billion on an armoured vehicle that is still not in service. That £5.5 billion could have been used on other things such as training exercises or equipment.
I make this appeal to the Chancellor. When he was the shadow Secretary of State for Defence and I was the shadow Defence Procurement Minister, we came up with a policy that said that the Comptroller had to look at the way the Ministry of Defence spent its money. I hope he resurrects that idea and sends the National Audit Office in to make sure that every penny piece is accounted for, because that is the only way forward.
Mike Martin (Tunbridge Wells) (LD)
It is an honour to follow the hon. Member for Caerphilly (Chris Evans), and I want to pick up his last theme, which was the defence of our country. Specifically, I want to talk about our readiness to fight a war. The Defence Secretary said just last week that we had to be ready within 1,000 days to fight a war against Russia, so this is really about preparing for the war that is in front of us, rather than for a war.
I want to make a slight digression and pick up on something the Chancellor said today. He said:
“In today’s Budget, I am fully funding the defence investment plan”.
I want to compare the figures in today’s Red Book with the figures laid by the previous Chancellor when the DIP announcements were made on 30 June. For 2027, in the DIP, we see a total budget for the MOD of £73.8 billion. In today’s Red Book we see a figure of £72.8 billion, so there is a gap of £1 billion. It is the same for 2028-29. I am sure that those on the Treasury Bench will have heard me, but perhaps the Chancellor would like to clarify his statement, because it does not seem that he is fully funding the DIP, according to the figures that were laid before Parliament.
Going back to readiness, the defence investment plan is, by its very nature, about capital projects. Over the past decade in the MOD, capital expenditure has gone up by about 130%, which is obviously very welcome, but day-to-day expenditure has flatlined in real terms. Looking at the Red Book today, and the RDEL for the MOD in 2027-28, we see that day-to-day expenditure in the MOD is actually being cut by 2%. Day-to-day expenditure in the MOD means spare parts, maintenance, munitions, training and operations.
I chair the all-party parliamentary group on rearmament, and we are currently running an inquiry into the state of the British military. What we are hearing is sobering stuff. We have no submarines that are at sea, which is in part a maintenance problem. We have aircraft that we are unable to disperse around different airfields because we do not have sufficient levels of stocks. We have the Navy cutting training courses for tank commanders. We have not run a submarine course for submarine commanders for many years. We have to send them to other nations to train them. This cut in resource expenditure, in day-to-day expenditure in the MOD, is having a real effect on our ability to be ready for war now, and that has a direct effect on our ability to deter Russia by 2030, which is exactly what the Government tell us we need to be doing.
I always apply the Granny Martin test to these things, which is to look at what people do rather than what they say. The Government seem to be saying that we need to be ready to fight a war by 2030. We have had a whole slew of announcements, with the Defence Secretary and the Security Minister saying that we need to stockpile food. I think we get it: it is a dangerous world and we need to be ready for war by 2030. But then why do we have a defence investment plan in which two thirds of the capital expenditure is after 2030, and that will deliver projects well into the 2030s?
If we really need to be ready for war by 2030, we need to focus on readiness. That means taking some of that MOD capital expenditure and putting it in the day-to-day budget, because that means we can train our forces, maintain our equipment, and have stocks, spares and munitions. Without that, our forces will wither, the training of our people will decline, morale will decline, and we will simply not be able to get ships out to sea or planes in the air.
Last week the APPG ran a session on the RAF, and we heard that for just £50 million we could build hardened shelters on our airbases. At the moment, we have exquisitely expensive planes that are sitting out in the open on the airbases. Do these people watch the news? Do they see what the Ukrainians are doing to Russian airframes? For relatively small amounts of money, we could get ready for the war that the Government say we face. That is what we should be focusing on, rather than projects that deliver after 2030.
Gareth Thomas (Harrow West) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Tunbridge Wells (Mike Martin). Perhaps because of the time limit, he did not dwell on the dismal economic inheritance that the Government were left by the Conservatives, which we are still having to contend with—huge national debt, public services starved of investment, and dismal levels of productivity and growth.
It is encouraging that we are the joint fastest-growing economy in the G7, according to the OECD; that the IMF has lauded this Government’s efforts to tackle the national debt; and that unemployment is down. But the Chancellor is right that, with the war between Iran and the US driving economic uncertainty and pushing up inflation, there is still much more to do to help family finances and tackle more of the long-term challenges our country faces. I welcome, in particular, the Budget’s focus on the cost of living and the support for families with their energy bills.
One of the most pressing long-term challenges that our country faces is how ambitious we want to be in resetting our relationship with our European allies. Made in Europe is the canary in the coalmine—the warning that the more distant we get from Europe, the more vulnerable British jobs dependent on European export orders will become. In the European Union our voices would be louder, our reach would go further and our economic security would be more assured. I recognise that my constituents will want to know the costs as well as the benefits of rejoining, so I very much welcome the Government’s appetite to have that honest debate.
This time, however, there should be a plan B. An “all or nothing” choice to go in or not would be even more irresponsible than the Cameroons’ failure to prepare for the possibility of exit a decade ago. So the reset must deliver more. Greater access to the single market, of the sort the Swiss have, and a uniquely British deal, but one recognisable to our allies in Europe, would bring substantial economic gains, albeit not the full benefits of rejoining.
On some of the specific measures in the Budget, I welcome very much the focus on small businesses and the sensible measures that the Chancellor set out, but we need to go further: to offer better access to capital, to help small businesses find new export markets, and to explore offering tax relief to help SMEs hire those who are not in education, employment or training.
Securing affordable finance to grow a small business remains significantly difficult for many firms. It is a sustained market failure, with a gap of up to £4 billion holding back growth, and it is particularly acute for businesses outside the south-east, and for women, disabled and ethnic minority entrepreneurs. That market failure is made even more acute by high-cost credit firms offering easy-to-get loans without real affordability checks or clarity on annual interest rates, and often those who broker such loans are not open about the commission they charge. This is the payday lending scandal over again, with entrepreneurs and small-business owners being exploited.
The further investment announced for the British Business Bank is welcome, but it needs to drive a sustained expansion of community banks, or community development finance institutions. They must build capacity jointly with big banks such as Santander, Barclays and HSBC, which invest in community banks in the US, but as yet not in the UK.
There is a neglected sector of the business community that exists not to make a profit for shareholders but to serve a social purpose, and it is crucial to delivering sustainable growth in every postcode. Those co-operative and mutual businesses do not charge the highest prices and they often cannot secure traditional bank finance, but they exist to achieve social goals for the communities in which they operate.
Chris Evans
My hon. Friend is making an important point about the mutual sector. Does he agree that credit unions should be part of that, and that managing credit unions to become building societies would be a way of rebuilding our mutual sector in this country?
Gareth Thomas
I absolutely agree with my hon. Friend, who makes an important point about the need to do more to expand credit unions. It is for such businesses, and the communities that would benefit from other co-operatives and mutuals, that Labour Members committed to put in place policies to double the size of the co-operative sector. We now need to see enacted the capital reforms drawn up by the Law Commission, which would unlock significant investment from capital markets, crucially without requiring a co-operative or mutual business to have to sell up and demutualise. We should look at using the corporate tax regime to encourage investment in those third sector businesses. Why cannot the bigger co-operative businesses be allowed to offset some of their corporation tax liabilities if they invest in co-op development funds that help bloody minded co-operative entrepreneurs to bring the hopes and ambitions of their communities to life?
Finally, I welcome the investment in public services in my constituency that the Budget locks in. New investment in primary care in Harrow, for example at Alexandra Avenue clinic, will unlock another 100,000 face-to-face appointments with a GP, nurse or other health professional. A new state-of-the-art GP surgery and, over time, a neighbourhood health centre is coming at the White House in Harrow College in central Harrow. Work is under way to plan further investment in other local medical centres, and more than £27 million has been given by the Government to invest in new special needs places across the borough. Vital funding for electrical and safety repairs has been invested at Rooks Heath high school, Whitefriars school, Nower Hill school, Bentley Wood high school, Hatch End high school and Earlsmead school. It is proof that this Government are delivering for the people of my constituency.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The disappointment of today’s Budget is that, having put on his running shoes for the media earlier this week, the Chancellor spent his statement running away from the big challenges facing the country and ducking each difficult decision. The first big challenge that he ducked was getting a proper grip on the public finances, so that we do not have to leave our children and grandchildren with spiralling national debt. He tells us that everything is under control because the OBR says that his fiscal rules have technically been met, but the public are not fooled by Treasury scorecards, and neither are the markets.
Just like his predecessor, the Chancellor promises to bring borrowing down right at the end of the period covered by his fiscal rules, in this case with the hidden promise of 2.6% annual spending cuts, which includes those 2% a year cuts from mainstream schools every year, after the next general election. Those steep cuts will clearly never happen, and the markets know it. In the meantime, he did not say that he was increasing borrowing from 2.9% to 3.4% next year, and from 2.5% to 2.9% the year after—billions in extra borrowing. Like his predecessor, the Chancellor seems to take his inspiration from St Augustine: “Oh Lord, help me to be pure, but not yet.” Every year, the date for that fiscal restraint is pushed back another 12 months and borrowing revised up in the meantime. He speaks of fiscal discipline, but this is fiscal policy on the never-never.
Nowhere is the reason for that fiscal timidity clearer than on welfare. All hon. Members know that public spending cannot be controlled and Britain cannot get back to work without proper structural reform to a ballooning welfare bill, but where we needed action, all we got were yet more taskforces, reviews and procrastination.
That failure on welfare leads directly to the most sorrowful failure in the Chancellor’s entire Budget: national defence. The Chancellor knows the urgent need for an immediate plan to increase defence spending to 3% of GDP by 2030 better than anyone; it is why he said he resigned as Defence Secretary earlier in the year. He knew the Government were playing Treasury accounting tricks—tucking MI5, pensions, the Chagos Islands bills and even £200 million for doing up Barrow-in-Furness high street under the badge of “defence spending” to pad out a press release—but when we strip out those tricks, our armed forces are facing a real-terms cut in their day-to-day running costs over the next three years.
Finally, the Chancellor had the chance today to undo the terrible damage done by his predecessor and inject real, sustainable growth into our economy. Business distress is at a 20 year high. High street names like Poundland are collapsing, and young people have paid the heaviest price of all, with surging numbers of NEETs and a genuine youth jobs crisis. Nowhere feels the triple whammy of high employment costs, punitive business rates and relentless regulation more acutely than our hospitality sector. Our pubs, bars and restaurants are the heart and soul of communities like mine in Kingswinford and South Staffordshire—
Mike Wood
No, we are coming to the end of the debate.
Those pubs, bars and restaurants are the No.1 place where young people get their first foot on the jobs ladder. The Chancellor’s announcement on small business relief will clearly be welcomed by those firms that qualify, but the truth is that it will do little to help most hospitality businesses. Fewer than one in 10 restaurants and licensed premises are set to benefit, with the rest continuing to suffer from Labour’s business rates bill hike.
The Chancellor had a simple, practical lever right in front of him today—a meaningful increase in the alcohol duty differential for draught beer and cider pulled across the bar in a well-run local pub or restaurant, compared with cheap bottles and cans stacked high in supermarket aisles. It would have helped our British breweries, helped save community pubs and protected hospitality jobs for young people. Again, the Chancellor knows that: in opposition, he called for cuts in beer duty, but in the Treasury he is hiking the main beer duty rate. He ignores the cross-party pleas for big reductions in draught beer duty, and instead hammers publicans and brewers once again, with another hike in the beer duty he used to say should be cut.
The Chancellor needed to step up and take the decision needed to help pubs and hospitality. Instead, just like on debt, on welfare and on defence, he ducked it. Our businesses, our young people and our armed forces cannot afford to wait in a holding pattern until this Government discover their courage.
Janet Daby (Lewisham East) (Lab)
Unlike the hon. Member for Kingswinford and South Staffordshire (Mike Wood), I commend and welcome today’s Budget. My contribution will be around cost of living support, care leavers’ support and NHS funding, in particular funding for sickle cell emergency bypass units. I put it on the record that I am chair of the all-party parliamentary group on sickle cell and thalassaemia.
I welcome that the Chancellor and the Prime Minister have prioritised the cost of living. Since Liz Truss’s disastrous mini-Budget, my constituents have faced high prices and rising interest rates. In 2023, an estimated 11.5% of my constituents were in fuel poverty, over 2% higher than the London average. As fuel costs rise, that figure can only increase. That is why I welcome the Chancellor’s confirmation today that he is temporarily removing VAT on electricity bills this in winter. Further, the announcement of the £100 discount for council tax bands A to D means that most of my vulnerable constituents—in fact, over 45,000 of them—will benefit from that funding to help them stay warmer this winter. I also welcome the Chancellor’s help to make bills fairer by scrapping fees added to gas bills. That will all help people to maintain a decent standard of living.
That leads me on to care leavers, who are some of our nation’s most vulnerable young people. Some of them face life’s highest barriers. The Nuffield Foundation found that 40% of care leavers aged 19 to 21 were NEETs, compared with 30% among the same age group in the general population. The Children’s Commissioner found that 25% of care leavers experienced homeless in the first two years of leaving care.
I ask the Treasury to consider care leavers aged 18 to 24 living independently, who receive the same benefit rate as other people aged under 25. Most under-25s live at home, yet both groups receive the same rate of benefit. I ask the Chancellor to work with the Department for Work and Pensions to consider paying care leavers the rate of benefits for the over-25s to support them with their independent living. The other issue is that care leavers who are in work often experience in-work poverty because of the rent and bills that they have to pay. The information from the Chancellor today helps care leavers, but there is still more to do.
I cannot but mention the Bakerloo line, which I was pleasantly surprised to hear mentioned in the Chancellor’s speech. I thank the Chancellor for backing the Bakerloo line coming to south-east London. His announcement will allow the Mayor of London to retain income tax receipts, which will allow him to invest in this vital infrastructure project in Lewisham and south-east London to improve transport links. That will have a positive impact on our economy.
I also welcome the £37 billion spend on our NHS. The Chancellor spoke of spending £37 billion more on health next year compared with the last year of the last Conservative Government, and I applaud that. We need to do more to bring down NHS A&E waiting lists and get rid of corridor care, to name a few things, but I wish to focus on the benefits of funding for specialised health services—namely, sickle cell bypass units. There are currently seven such units in total in London and in the north of England, one of which is at my local hospital in Lewisham. I have spoken to the amazing staff and seen the provision of care there.
Sickle cell disorder is the fastest growing genetic condition in the UK. Around 19,000 people live with it, and roughly 250 babies are born with it each year. It causes sudden and excruciating pain. More needs to be done to ensure that we fund the right provisions and units to ensure that that provision continues for people who have sickle cell disorder. I ask the Government to carry on working to ensure that sickle cell bypass units continue to be provided in those seven places and are more spread out across the country.
Llinos Medi (Ynys Môn) (PC)
This was Labour’s opportunity to show the people of Wales that it is listening, following the Senedd election last May. Instead, it has delivered one of the worst funding settlements for Wales in years. The £450 million over three years announced by the UK Government today is a real-terms cut to the Welsh budget. The Welsh Government needed a further £350 million in one year for a standstill budget. That means a cut to public services. In addition, the capital budget will be cut by 10% in real terms by the end of the decade, because of decisions made here in Westminster.
This Budget should have begun to address the long-standing injustice of Welsh rail funding. Wales has around 10% of the UK rail network, yet it receives just 1% of the rail enhancement spending. To address that, we were promised a £14 billion rail pipeline, but today, Leeds gets £300 million for one station, and the entire Welsh rail network gets £30 million.
The Government should go further to support investment. In north Wales, we are fortunate, and I thank the Labour Government for their decision on Gwyndod. Gwyndod has the potential to reindustrialise north Wales, strengthen our energy security and create thousands of high-quality jobs, but that will only happen if the Government ensure that the manufacturing jobs and supply chain investments from that project are created in Wales. Today’s announcement that the M-SParc science park on Ynys Môn will be supported is a step in the right direction when it comes to supporting economic growth, but we must make sure that Ynys Môn and north Wales benefit fully from Gwyndod.
Dr Scott Arthur (Edinburgh South West) (Lab)
As always, the hon. Lady is speaking very passionately. She has talked about energy security in Wales. Would it not be a lot easier to achieve that if the Welsh Government did not proceed with their plan to ban electricity pylons?
Llinos Medi
I think those conversations will take place in every community where there is a grid connection, and it is respectful to have those conversations. Since being elected to this place, I have been having conversations about having a robust connection, which should include undergrounding, to respect our communities. Communities that are hosting nationally significant energy projects should also be getting energy transmission in a fairer way.
Another measure that should have been announced today is energy support. Wales has some of the oldest and hardest to heat housing stock in western Europe, and official figures show that one in four households are living in fuel poverty. As has been mentioned today, many households across rural Wales remain off the gas grid—including 52% of those on Ynys Môn—with many of them reliant on heating oil. Businesses, too, remain exposed to volatile energy costs, without the protection of a price cap. The Chancellor announced that standing charges on gas will not be removed until the end of 2027, so households will not see the benefits of that decision this winter. The Government have not taken immediate steps to end unfair electricity standing charges, leaving households in north Wales paying the highest standing charges anywhere in the United Kingdom.
The people of Wales deserve better—they deserve a Government prepared to match their rhetoric on fairness with meaningful action. We did not get that fair deal for Wales in this Budget.
Ruth Jones (Newport West and Islwyn) (Lab)
This is the right Budget at the right time. It delivers immediate relief, but also the long-term investment necessary to bring hope back to Britain. I welcome the further steps announced by the Chancellor to provide additional breathing room to households, which is essential. Energy bills will be cut, food tariffs will be slashed, the carer’s allowance cliff edge will be abolished, standing charges will be scrapped, parental pay will be expanded, and fuel duty will be frozen again, because Labour is on the side of working people. We recognise that times are tough, especially with the ongoing energy price spikes driven by Putin’s illegal invasion of Ukraine and, of course, the unnecessary US-Iran war.
This Government’s ability to support hard-working families while continuing to provide up-front investment in our public services is testament to our careful economic management. Our careful stewardship has been commended by the IMF and has allowed us to enjoy the joint highest growth in the G7 while keeping public debt under control. The cost of living relief announced today by the Chancellor only builds on that already announced by the Prime Minister in his first 100 days—taking VAT off energy bills, a £2 bus fare cap, business rates relief, and tackling rogue tradespeople and repeat subscription scams.
I am disappointed, though, that where this support relates only to England, the minority Plaid Cymru Welsh Government have not shown the same ambition or understanding of the everyday pressures facing households. We need to see that £2 cap on bus fares in Wales, as well as the extension of £1 fares for under-21s. I look forward to Plaid Ministers announcing how they will match the UK Labour Government’s reduction in bus fares—let us hope they do it quickly. Barnett consequentials on spending announcements are worth an additional £450 million to the Welsh Government, and I suggest that they spend it wisely, as people in Wales also want to benefit from this Budget for working people.
With my constituency being home to the Welsh semiconductor cluster, and as the chair of the APPG for semiconductors, I am extremely proud of this Government’s commitment to manufacturing. I recognise the role that reindustrialisation can play in bringing well-paid jobs to every postcode, including the £20 million to support UK reindustrialisation and high-value jobs. That builds on the existing strengths of the semiconductor cluster in Newport West and Islwyn.
Boosting manufacturing and the Prime Minister’s ambition to bring good growth to every postcode are particularly important in Wales, where we felt the impacts of 40 years of neo-liberalism at their hardest. Well-paid union jobs in our industrial heartland and coalfield communities disappeared and were never replaced. Despite the damage done by decades of Conservative Governments, Wales remains a proud manufacturing nation. The evidence is clear from my own constituency, with world-leading manufacturers choosing Wales for investment. Advanced manufacturing must be at the heart of a future Welsh economy. This Budget backs that ambition.
This Budget is another big win for reversing 14 years of Tory under-investment in Welsh railways. Last year, we saw £445 million of funding for new stations, and now we have an additional £30 million for the Cardiff Parkway station site. As my constituency neighbours that site, I particularly welcome that announcement. It will provide meaningful alternatives for commuters and shoppers wanting to travel between Newport and Cardiff. I look forward to further announcements at the spending review on the delivery of this Government’s £14 billion commitment to transform Welsh rail infrastructure, including the additional five stations across Newport.
Ruth Jones
I will carry on, because I am conscious that there are others who want to speak.
Labour’s investment-led approach stands in stark contrast to that of the minority Plaid Government, who propose to close a number of the M4 junctions across Newport. That will improve traffic flow by just 3% but will have a massive impact on air and noise pollution for those living in my constituency.
I welcome the Chancellor’s announcement today that tax-free mileage rates will now permanently be set at 55p a mile for the first 10,000 miles, which will go a long way to helping those who drive as part of their work, especially those providing domiciliary care. We need the Welsh Government to show the same ambition in making sure that when we push funding and powers from Westminster, it is not just hoarded in Cardiff Bay but is brought even closer to our communities. In my home city of Newport, we have a bold, ambitious Labour council led by Councillor Dimitri Batrouni that is ensuring that Newport is one of the fastest-growing areas of the UK. Think of what we could achieve by giving more powers and funding directly to local areas. This Budget marks another major step forward in delivering breathing space today and fresh hope for the future, and I support it.
Jerome Mayhew (Broadland and Fakenham) (Con)
I will go out on a limb and say that this is a terrible Budget. It is not just a “steady as it goes” Budget, because everyone in this Chamber knows that we have got some serious problems that have to be addressed by this country, both politically and economically. This will be known as the “kick it down the road” Budget. It has its eyes covered and its fingers in its ears, pretending that these problems are not real and are not now, and that we can afford to push them all down for another 12 to 18 months.
Look at national debt. We have already peaked above £3 trillion of national debt in the past couple of weeks, yet this Parliament is now on course to increase borrowing above what was planned in 2024 by £308 billion. That is an increase of more than a quarter of a trillion pounds in borrowing, with no plan to get it down and no credible plan to reduce welfare spending, which is the next major issue that we have to address.
Welfare dependency now makes it reasonable for 1,000 people a day to apply for the personal independence payment, because they know that they will get paid more on benefits than if they got a job. The Government recognised that needs to change and tried to make a very modest change last year, but that was voted down by Government Members, and it led to the defeat of the previous Prime Minister. What was the Government’s answer? The Timms report, which was created out of the failure of the debate last time round, and part of its objective is not to reduce spending—[Interruption.] I would be grateful if Members listened to the speech being made, rather than making their own from the Government Front Bench.
Welfare dependency has to be addressed, yet we are waiting for a report, and then a response from the Government, and then a White Paper sometime next year, apparently. Then, after that, there will potentially be legislation to go through this House. That is no way to address this issue. This country faces a key and present economic, social and moral danger, and this Government are pretending that it is not there.
Then we come to defence. We are told by this Government that we must prepare for a war within 1,000 days, but do we have a plan to get to spending 3% of GDP on defence by 2030? Not a bit of it. We have a plan for next year, so we are supposed to be satisfied with a plan to get to a plan. This is ridiculous. We have Ministers telling us that we have to stockpile food, but we have capital expenditure that is due to take place after that 1,000-day period. This is back-to-front government, and it is a negligent Treasury that is imposing this on our defence sector.
We have a plan that reduces next year’s economic growth from 1.6%, which is pretty anaemic, down to 1%, and at no point during the forecast period does it get as far as 2%. This is outrageous.
Jerome Mayhew
I will not. I have only a minute left.
We have tax rises being imposed on savers. What a weird argument that is—that increased taxes should be imposed on people who are doing the right thing. As for banks, which are the funders of growth, the CEO of one UK bank is reported to have said:
“Taxing the engines of growth to reduce VAT on gherkins is end-of-Rome level of stupidity.”
It is hard to disagree, is it not?
We have four really serious issues for our country, and a Budget that pretends they are not there. It is a Budget that kicks the can down the road. It is a Budget that says “steady as she goes” is the right answer. I could not disagree more.
Matt Rodda (Reading Central) (Lab)
I warmly welcome the Budget. It offers breathing space for both families and businesses, and, crucially, hope for the future. Although this is a time of really quite severe international headwinds, as we are all very aware, there are real signs of growth in the British economy. We are jointly leading the G7 in terms of growth, and the IMF is welcoming the Government’s measures to reduce debt and deficit.
Let me deal briefly with the key measures that will offer breathing space and support to families and businesses, before moving on to some of the longer-term measures. Many of my constituents live in older properties, in Victorian houses or possibly houses built in the 1930s, and I was delighted to note that they will benefit from a host of measures to reduce their energy bills in what will be a very hard winter for them. That shows a real understanding of the pressures on families at this difficult time. I particularly thank the Chancellor for his offer of £100 paid directly to residents, which I consider very sensible. That, and a range of other measures, will help to reduce the current severe pressure on family finances. The measures to support small businesses, particularly those in our high streets, will also be welcomed in Reading and many other towns and cities. Moreover, 47% of small hospitality, leisure and retail businesses in the south-east will now not pay business rates.
In the time available to me, I want to say something about the longer-term measures, particularly those relating to improved devolution to help businesses and development and regeneration, along with a series of other measures to support businesses and homeowners. When it comes to regeneration, the new mayoralties that have been announced present some real opportunities. I warmly welcome the Thames Valley mayoralty of Berkshire, Oxfordshire and Swindon, and, in particular, the scope for mayors to free up land near railway stations. As many Members on both sides of the House have seen, a huge pool of land is available.
On one side of the railway in my own town of Reading, a £1 billion regeneration project is bringing jobs, growth and new housing to the town centre. On the other side, where there are a series of small, fractured sites where developers are not working with one another, there is no regeneration. One of the significant advances is that bringing in mayors allows the creation of a mayoral development corporation, which can bring together those disparate sites and make them much more attractive to developers. I look forward to hearing more from the Chancellor and the Ministry of Housing, Communities and Local Government about that type of work as the whole mayoral scheme moves forward in the new year.
The support for home ownership, and the support for new council houses, is warmly welcome in my area. We have high house prices, and many people are struggling to get on the housing ladder. The growth of businesses in the Thames valley is partly due to the inward movement of people from across the rest of the UK and around the world, so housing is needed, and these are two important measures to support home ownership and ensure that there are homes for people to rent.
Finally, I warmly welcome the measures to support entrepreneurship, which I hope will significantly support our tech entrepreneurs. Some 300,000 people in Berkshire work in tech or telecoms, and they are driving growth in our county, across southern England and, indeed, across the country as a whole. We have benefited from a number of key infrastructure projects, particularly the Elizabeth line. I look forward to many others in the future, including the western rail link to Heathrow, but the help to support entrepreneurs is important. I warmly welcome that and commend the Treasury for its work.
Thank you, Madam Deputy Speaker; it has been a pleasure to speak today.
Dr Andrew Murrison (South West Wiltshire) (Con)
I could not really make up my mind, when listening to the Chancellor, whether the Budget was a gathering note for an early general election or simply a wasted opportunity. Well, we have been told in the last few minutes that the Prime Minister has said to reporters:
“I can rule out calling a general election in the next 12 months.”
So that has sorted that one. I am sure that many right hon. and hon. Members on the Labour Benches will be heartily relieved.
We are left with a wasted opportunity: a Budget that contains no growth strategy worth the name; nothing on welfare, except for one or two small rises here and there; and nothing on reducing the size of the state. While countries in Europe are giving serious attention to reducing the size of the state following covid, this Government are doing very little indeed, to put it politely. The Netherlands is reducing the headcount in its civil service by 15%, except in the military and the police. If we were to do something even approaching that, it would be the thick end of a headcount of 100,000, freeing up resources for deficit reduction in the interests of generational fairness.
I am particularly focused on good growth in the BA12, BA13 and BA14 postcodes, but my constituents are seeing none of it. What they did see, practically on day one of this Government two and a half years ago, was the cancellation of the A303 improvements. They saw the long-grassing of the north-south strategic study to link the south coast with the M4. That seems to have gone by the board, meaning no Westbury bypass after all these years. We see continuing fiscal encouragement for the much-loathed plan for an incinerator at Westbury. We have seen VAT and charitable rate relief changes for independent schools, which has closed a foreign languages college in my constituency that brought in a great deal of foreign investment. We have also seen the retrenchment of one independent school, and only yesterday we received news that a further school that is very close to my constituency is finally, after over 100 years, closing down as a direct result of Government policy. There is not much growth there.
We have seen the family farm tax. We have seen the family business tax. We have seen the carbon border adjustment mechanism, which was included in the Finance Act 2025. It will come in on 1 January to add to farmers’ woes—something that I had thought the Government might mention in the Budget. It was said earlier that farmers have hardly featured at all in this Budget. Well, CBAM was an obvious thing to look at to reduce the cost of fertiliser. There are farmers in my constituency who are seriously considering not planting this year because of the cost of fertiliser. This was the opportunity to put that right.
My constituency is very military. We heard a deafening silence on spending 3% of GDP on defence by the end of this decade, making a complete mockery of the now Chancellor’s resignation in June. Goodness me—his namesake, Denis Healey, must be turning in his grave. In 1969, he famously said that
“once we cut defence expenditure to the extent where our security is imperilled”
—the grounds on which the current Chancellor resigned in June—
“we have no houses, we have no hospitals, we have no schools. We have a heap of cinders.”—[Official Report, 5 March 1969; Vol. 779, c. 551.]
Yet it is precisely this issue—the welfare of our defence personnel and our ability to protect the state—that the now Chancellor resigned over in June. I have to say that that is quite extraordinary.
Now we find that RDEL will be cut in real terms over the next two years. In the time available to me, let me explain what that means. It means defence personnel’s accommodation will not be kept up to the extent that it should be. It means establishments will not be renovated. It means there will be no fuel for ships at sea. It means dockyard workers will not get overtime, which means ships will be anchored off at a weekend rather than service people being able to get home to their families. It means no exercises. I speak as a reservist, and it means no reserve service days, which means demoralising our reserve. This is catastrophic, and it is no way to behave. It is certainly not indicative of a Government who are halfway serious about the defence of this country.
Leigh Ingham (Stafford) (Lab)
To many hon. Members, it will not come as a surprise that I want to talk about town centres. Stafford, the constituency I represent, is a market town—the clue is in the name—but since 2024, Stafford has not had an actual market. It is really hard to think of a more powerful symbol of what has happened to towns like mine over the last decade and a half. Towns such as Stafford are full of hard-working people who really want to get on. They want a good job, a warm home and a safe community—and it is not a lot to ask for. Under the last Conservative Government, they watched as the foundations of their community life were stripped away. Youth centres disappeared, we had the third worst youth service cuts in the country, important buildings were left to decay and eventually the market closed. The damage that such neglect does to a town is more than financial; it starts to chip away at the heart of a place and changes how people feel about their home.
Stafford has a vibrant, independent business scene. People can get unbelievable hot chocolates in the Monk & Smuggler, bestsellers from That Little Bookshop or incredible vinyls from Double Double records, plus much more. These businesses are investing their own time, money and energy in our town, and they have told me many times that they need their market back. They want Stafford to be a destination once again, and so do I—a place that people choose to visit, to spend time in, to spend money in and to build a future in. That is why I am so proud that this Government have committed £10 million to a brand-new, all-day market hall and events centre in Stafford, which I have been working on for a good while now, as my hon. Friends can attest. This investment says that towns matter, and that my town matters. It is an investment that will support businesses, create opportunities and help breathe life back into our high street.
This debate is obviously about something bigger than one town and one project. It is about who gets the power to shape people’s future, because if we are serious about growth, opportunity and rebuilding Britain, we cannot continue to run every important decision through Whitehall. The truth is that the people who know Staffordshire best are the people who live and work there. That is why the case for a mayoral strategic authority in Staffordshire and Stoke-on-Trent is so strong. We have already seen the difference investment can make in Stafford over the last couple of years. We have seen growth and confidence start to return and investment at a scale not seen for many years.
Of course, there is so much more to do, but this commitment is a clear sign that this Government care about towns like ours, believe in their future and are prepared to back that with action. I look forward to working with Members across the House to make this vision a reality, and to ensure that Staffordshire and Stoke-on-Trent have the powers, the investment—my hon. Friends have talked about that—and the opportunities they need to thrive for generations to come.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Sadly, this Budget does not tackle the critical national issues that we face. It does not have a plan to reduce spending on welfare. It does not have a plan to increase spending on defence. It does not have definitive interventions to improve growth, tackle our spiralling debt or deal with the record high taxes all of us currently face.
What about locally? How does the Budget score for my constituents in Runnymede and Weybridge? Does it keep Runnymede and Weybridge moving? Well, there is nothing on level crossings and not much on rail or roads. On backing jobs and local businesses, it does not do anything about the catastrophic employer national insurance contributions.
What about defending our green belt and our natural environment? There is nothing on the Environment Agency. On protection from flooding—I am glad that the Minister with responsibility flooding is on the Front Bench—there is no mention of the River Thames scheme in the Budget. The largest infrastructure scheme put forward by the Environment Agency is notably absent, which is deeply, deeply concerning.
How about supporting children and families? Again, there is nothing on special educational needs and disabilities or on childcare.
The scorecard from Runnymede and Weybridge on keeping my constituency moving is nil, nil, nil, nil, nil. Why is that? It is because this Budget is a tomorrow Budget. It is a future Budget, with all the key decisions left until after a review or until this Parliament is over. I have some news for those on the Government Benches and those on the Opposition Benches to the left of me. We know what that means. The fact that the Chancellor and the Prime Minister would rather have a non-Budget and call a general election than make the hard decisions today tells us everything we need to know about this Labour Government. There is another way with the Conservatives, and I am looking forward to it and so are my constituents.
Ordered, That the debate be now adjourned.—(Michael Wheeler.)
Debate to be resumed tomorrow.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
On a point of order, Madam Deputy Speaker. Thank you for granting this point of order. I am seeking some clarity because both this week and last week, the Prime Minister and the Secretary of State for Energy Security and Net Zero indicated that no decision had been taken on whether they were going to grant approval to the Rosebank oilfield. However, the Office for Budget Responsibility’s “Economic and fiscal outlook” publication today states that the Government’s projected oil and gas receipts for the next year, which are now expected to raise £5.1 billion for the Treasury, include:
“production from currently producing fields (including Jackdaw), and the NSTA’s estimate of production from development of new fields, which includes Rosebank, and from future discoveries.”
Madam Deputy Speaker, might you be able to offer some guidance on how this House and the country can get some clarity on whether or not the Rosebank oilfield has been granted approval or will be granted approval, and whether the OBR’s forecast can be trusted at all?
Madam Deputy Speaker (Judith Cummins)
I thank the hon. Gentleman for notice of his point of order. I have received no notice from Ministers that they intend to make a statement on this matter. It is not a matter for the Chair, but Ministers on the Treasury Bench will have heard his point of order.
Support for Coastal Communities
Neil Duncan-Jordan (Poole) (Lab)
I rise to present a petition signed by hundreds of my constituents, which calls for urgent action to ease the cost of living pressures that many families face and for greater support for the many local businesses that make Poole the place it is. Ahead of the Budget, I shared these proposals directly with the Chancellor, because I believe we need to recognise the distinct challenges facing coastal areas.
The petitioners therefore request
“that the House of Commons urges the Government to implement a strategy for coastal communities that supports affordable housing, coastal economies, lower household energy costs, cleaner waterways and stronger representation for coastal communities within Government.”
Following is the full text of the petition:
[The petition of residents of the United Kingdom,
Declares that a budget for coastal communities would address their unique challenges, boost living standards, and support local economies; recognises that in Poole, above average housing costs collide with low wages while seasonal work leaves services stretched in summer and workers and businesses struggling through the winter; that families need immediate action to control rents and a long-term plan to deliver affordable housing, alongside supporting small businesses with a funded strategy for domestic tourism; that action is needed to cushion rising energy costs caused by Trump’s war with Iran together with sustained investment in renewables; that public ownership of failing water firms is essential cleaning up the water that defines coastal areas; and that a dedicated Minister for Coastal Communities should be appointed to coordinate this plan.
The petitioners therefore request that the House of Commons urges the Government to implement a strategy for coastal communities that supports affordable housing, coastal economies, lower household energy costs, cleaner waterways and stronger representation for coastal communities within Government.
And the petitioners remain, etc.]
[P003254]
Flood Resilience
(1 day, 8 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dr Ellie Chowns (North Herefordshire) (Green)
Not long after my election in 2024, I received an email from a father of three whose home had been flooded for the second time in five years. He wrote:
“The increasing uncertainty in the weather caused by global warming only increases the flood risk in the immediacy—and in future, we fear we won’t be able to secure insurance on the property. And we live in constant fear of repeat situations for something that, in theory, can be resolved.”
His words stayed with me, because they capture exactly what I hear across North Herefordshire, and what I am sure colleagues hear across the country. Flooding is no longer something that people talk about as a freak event or a piece of bad luck; increasingly, they expect it to happen again. As our climate changes, flooding is becoming something that communities now must plan around.
We recently marked Flood Action Week, and I pay huge tribute to everyone, from local volunteers to emergency responders, who worked tirelessly to help communities prepare. But for many, flooding is no longer an occasional emergency; it is becoming a part of life. We have already seen unprecedentedly deadly climate impacts this summer. The climate crisis is no longer a future threat; it is here now, and affecting homes, farms, businesses and critical infrastructure across the country.
As we head into winter, scientists are warning that a powerful supercharged El Niño could contribute to much wetter and stormier conditions during parts of this winter. We know that the risks are growing and that the cost of failing to prepare will be borne by our communities.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for bringing forward this debate—I spoke to her beforehand. This is not the Minister’s responsibility, but back home they have allocated £16,000 for flood resilience, which would hardly pay to get a JCB and a trailer down to where the coastal erosion and floods are happening. Does she agree that it is a case of penny wise and pound foolish? If we do not address flood resilience issues and coastal erosion now, we will pay substantially more later. The Minister should make the money available now.
Dr Chowns
Absolutely, and that is a point I will return to later in my speech. There is a huge benefit-cost ratio for early investment in flood resilience—it pays back many times over.
Let us recognise the scale of the challenge that we face: 6.3 million properties across the UK are already at risk of flooding. The Climate Change Committee estimates that flooding has already cost the UK around £3.3 billion every year and warns that annual damages could increase to about £4.5 billion a year by the middle of the century if we fail to adapt. As the hon. Member for Strangford (Jim Shannon) has said, it would be much cheaper to invest now to ensure that we are protected against that.
The costs are measured not only in pounds, but in the strain placed on families trying to rebuild their lives. The bill for flooding is already here; the question is whether we invest now to reduce those costs or pay far more later.
Perran Moon (Camborne and Redruth) (Ind)
On investment, residents of Bissoe, which is partly in my constituency and partly in the constituency of the hon. Member for Truro and Falmouth (Jayne Kirkham), are fed up with floods every winter linked to abandoned local metal mines. It is a persistent problem across Cornwall. The Mining Remediation Authority, the budget for which partly sits with the Department for Environment, Food and Rural Affairs, does not have adequate funding to deal with the challenges in Bissoe. Does the hon. Member agree that as the impacts of climate change worsen, Cornwall’s former mining community should not be left exposed without that flood resilience?
Dr Chowns
Once again, the hon. Member’s point is that as we face increasing frequency and severity of floods, existing problems are going to become worse, so we need to invest to protect communities against that. Investment early is going to be cheaper than paying the costs in the long run.
Manuela Perteghella (Stratford-on-Avon) (LD)
In my constituency, the Shipston Area Flood Action Group has led a natural flood management project, working together with local landowners to slow the flow of the River Stour upstream. Does the hon. Member agree that we need greater investment in natural flood management, so that communities are protected before flooding occurs while also helping to restore nature?
Dr Chowns
The hon. Member makes an excellent point that I was about to make myself. Natural flood management has got to be a core element of our response to flood risk. I have met families who have gone through the ordeal of seeing their homes flooded time and again.
I have met farmers who have watched valuable topsoil disappear from fields that they have worked for decades. I have met parents whose children cannot get to school because roads have become impassable. I have met business owners wondering how they will cope when the next storm comes. For all of those people, flood resilience is not an abstract issue; it is about whether they can live, work, study and plan with confidence.
Calum Miller (Bicester and Woodstock) (LD)
The hon. Lady is making a powerful case. Residents in my constituency have experienced the devastating effects of flooding and live in fear of it happening again. Does she agree that it is extraordinary that when a local flood agency looks into these matters and identifies the steps that can be taken, it does not have the powers to compel other agencies and, in particular, the water companies to take appropriate measures to prevent these things from happening again in future?
Dr Chowns
The hon. Gentleman’s point about co-ordination between agencies is absolutely crucial; it is another point that I will be coming to in my speech. This is an issue that crosses boundaries, because river catchments do not respect administrative or sectoral boundaries. We need to have a fully joined-up approach.
Herefordians know what severe flooding looks like. In 2020, Herefordshire experienced the worst flooding in more than 200 years of recorded history. Storm Dennis was absolutely devastating for many families and businesses. Six years on, residents tell me that it is not only the severity of flooding that worries them, but the frequency. The Minister may remember that I raised this issue basically every single month of my first few months in this Chamber because we were facing floods that frequently. Communities that have barely recovered from one flood are increasingly finding themselves preparing for the next. I hope that the Minister will be able to set out today exactly what action the Government are taking to better prevent, prepare for and respond to flooding.
Flooding means different things in different places. In Lyonshall, in my constituency, it means the worry that a new development may not have been built with the infrastructure needed to manage water safely. In Eardisland it means anxiety about whether support will be available when the next flood comes. One issue repeatedly raised with me by residents in Eardisland is the flood recovery framework. Following Storm Bert in late 2024, I attended a public meeting with more than 100 local residents—as ever, the people closest to the problem already knew what needed to be done. After those conversations, I wrote to Ministers to ask whether responsibility for activating the flood recovery framework should rest more with local authorities. From the perspective of someone whose home is flooded, distinctions about national thresholds make very little sense. Local people and local councils understand the impacts better than anyone else.
Dr Simon Opher (Stroud) (Lab)
The hon. Lady is making an excellent speech. I would like to talk about natural flood management and how it sits naturally with district councils. In my constituency we have had more than 1,200 interventions over 12 years—I think we lead nationally on this. I want in particular to praise Chris Uttley, who works for the district council, and who does an absolutely fantastic job with natural flood management—he has saved hundreds of homes and businesses from a repeat of the terrible 2007 floods. Would the hon. Lady join me in urging the Government to make it as easy as possible for councils to access the £25 million funding that the Government have earmarked for natural flood management so that we can unlock this tremendous potential in local government?
Dr Chowns
I am always in favour of Government making it easier for local authorities to unlock funding, as well as Government providing more funding to enable the good things, like natural flood management, to happen.
To finish my point on the flood recovery framework, will the Minister look again at whether local authorities should have a greater role in activating support under that framework.
Many of the flooding incidents that affect my constituency are caused not by rivers bursting their banks, but by heavy rainfall overwhelming surface drainage systems. As surface water flooding is becoming a greater risk, our planning system and development standards must catch up. Many colleagues across the House have called on the Government to commence schedule 3 to the Flood and Water Management Act 2010 and finally make sustainable drainage systems standard practice. Will the Minister therefore set out whether and when the Government will commence schedule 3 and make sustainable drainage systems standard in new developments?
Better planning must also be part of the solution. People understand that new homes are needed, but they expect flood risk to be properly reflected in planning decisions. This is at the core of the Green party’s policy of having the right homes in the right place at the right price.
I have seen this in my own constituency, when a constituent from Canon Pyon came to see me in my surgery a while back. They had moved into a new development relatively recently, and their neighbour had been flooded out of their house six weeks after moving in because the surface drainage provisions were inadequate—this was in a newly built development. I raised it with the council subsequently. This just highlights that we must integrate flood resilience into development, because we cannot be building developments that are going to flood so shortly after they are built. We need to have it much more clearly specified in the planning process and have much clearer follow-up to ensure that conditions placed on planning applications are actually followed through.
Flood resilience must also be better integrated into how we manage land. One of the absolutely lovely parts of my job is meeting farmers across North Herefordshire. They understand better than most that all of these strands are interconnected. Soil health affects water retention. Water affects crop yields. What happens upstream affects communities downstream, and what happens on one farm can affect flood risk miles away. That is why I am so impressed by schemes such as Wyescapes, which involves farmers working together to hold more water in the landscape to improve soil health, reduce pollution, restore nature and strengthen resilience, including flood resilience, across the whole catchment.
Adrian Ramsay (Waveney Valley) (Green)
My hon. Friend is making a powerful case. In constituencies that are vulnerable to flooding, such as Waveney Valley, farmers are indeed essential to managing water in a way that stores it on land and protects communities downstream. Countryside stewardship higher tier payments fund the work that creates wetlands, restores floodplains and plants woodland, but agreements are slow to reach farmers who are ready to mobilise, delaying essential work ahead of periods of heightened flood risk. Does my hon. Friend agree that DEFRA must properly resource both the budgets and capacity of Natural England and the Rural Payments Agency so that we can expand higher tier faster?
Dr Chowns
My hon. Friend makes an excellent point. The Government have a crucial role to play in supporting farmers to put in place the measures that are so helpful for our long-term resilience and have many wider community benefits too.
This work is key because healthy soils, healthy rivers and resilient landscapes are key to long-term food security. As the National Farmers’ Union points out, 58% of England’s highest quality agricultural land lies within floodplains, underlining the fact that flood resilience is not just an environmental issue but a food security issue. I know many farmers whose land has been at times completely under water, which has devastating impacts on their livelihood.
Farmers are increasingly having to manage both floods and drought as part of normal business planning. They want to be part of the solution, but they need the certainty and support to make long-term investments in managing water, improving soil health and restoring nature. Indeed, I met with the Herefordshire Rural Hub to discuss the local farmers’ water action group, which is looking exactly at how they can manage having excess water in the winter and not enough water in the summer, and connecting those two together to support our communities.
When farmers hold on to water on their land to protect homes and infrastructure downstream, they are providing a much wider public benefit. Does the Minister agree that farmers who help to reduce flood risk in this way should be properly recognised and fairly rewarded for the role they play?
More broadly, we need to invest much more in natural flood management, as my hon. Friend the Member for Waveney Valley (Adrian Ramsay) said. Restoring wetland, improving soil health, reconnecting rivers with their floodplains, planting trees, restoring hedgerows—all these things help to slow the flow of water through the landscape. Every drop of water held upstream is a drop that does not have to be managed in an emergency downstream.
As has been noted, rivers do not recognise administrative boundaries, and neither does floodwater. What happens upstream affects communities downstream, often many miles away, so what are the Government doing to improve co-ordination and co-operation between local authorities, farmers, the drainage boards, regulators and water companies across the whole catchment?
Flooding and drought are two sides of the same coin. I welcome the establishment of the new flood and drought resilience taskforce, which is currently looking at community engagement, water resilience and property flood resilience. Let me pay tribute to Flood Mary—one of my constituents—who has played a crucial role over many years in encouraging the adoption of property flood resilience. The test for me is how the work of the flood and drought resilience taskforce will translate into practical action on the ground for communities such as those in North Herefordshire. Met Office data shows that the winter of 2025-26 was the eighth wettest in England since records began, yet by August this year 71% of England had entered drought status. These are the extremes of flood and drought writ large, in our faces right now. It perfectly illustrates why flooding and drought can no longer be treated as separate challenges. What plans do the Government have to increase water storage, including new reservoirs, so that excess winter water can help tackle flooding while also improving resilience to summer droughts?
The case for action is overwhelming. Flooding threatens homes, food production, local economies and the long-term viability of communities. We know that investing now is far cheaper than paying for the damage later. In fact, the Climate Change Committee estimates benefit-cost ratios of 3:1 to 5:1 for natural flood management, 5:1 for property flood resilience, and 5:1 for other approaches to flood risk management. This is great value for money and a fantastic return on investment.
We know what works: better planning, better maintenance, stronger protection for homes, support for farmers and approaches that work with nature rather than against it. Indeed, I saw lots of that in action when I visited the Netherlands a couple of years ago with the Environmental Audit Committee. What was striking is that there they work out what needs to be done to protect communities, what the most cost-effective investments are and then how they are going to mobilise the funding. But in this country we seem to fight with the Treasury for a little pot of money, with everybody having to get their elbows out to engage in a bunfight about what resources can be secured for different places. We need a much more holistic approach. That requires more investment up front, but it will pay back many times over.
Dr Chowns
I am sorry, but I am going to finish as we are short of time.
The responsibility of Government is not simply to respond to flooding after it happens, but to build the resilience our communities will need in a rapidly warming climate. The question is whether the Government are ready to act at the scale that the challenge of flood resilience demands.
The Minister of State, Department for Environment, Food and Rural Affairs (Emma Hardy)
I will do my best to croak my way through the rest of the debate. I thank the hon. Member for North Herefordshire (Dr Chowns) for securing this really important debate. It was heartening that there was so much I found myself nodding along with as she was speaking.
I know that the emotional and financial impact of flooding can be devastating on families and businesses. Like the hon. Lady, I have spoken to many people who have been affected by floods, including farmers whose crops have been damaged. I have also seen and heard from communities affected by flooding. It is not just about the economic impact, but about the impact on their mental health and wellbeing. The scars of flooding remain for a long time after the floodwaters recede.
I completely agree with the hon. Lady’s points about climate change. The situation now is that 81% of the country in drought, but we saw some flooding just last week—and one area that is in drought had a flood as well. We are dealing with the impact of climate change, which is absolutely here and now.
On a slightly different note, I find it frustrating that some parties in the House do not seem to accept that climate change is both real and here. Luckily, I can look around the Chamber and see that nobody in here currently does so, which is positive. As the hon. Lady said, this year may be especially challenging because we are expecting a strong El Niño, with an increased likelihood of wetter and stormier conditions across the UK during autumn and winter.
We are better prepared this year than we were last, and last year we were better prepared than we were the year before. That is partly because of the number of flood defences we have been able to build successfully and partly because we have been able to restore and maintain more of our flood defences. It is also because with the original floods taskforce, after each episode of flooding each winter, we wanted to do some honest lessons learned on what worked, what did not and what we could do better and set up that cycle of continuous improvement; the hon. Lady was right on that. I am therefore pleased that now, through the flood and drought resilience taskforce, we are thinking about this together. I fully agreed with the hon. Lady on how the things that help with drought help with flooding as well. If the soil can retain more moisture, that helps with drought in the summer—that helps with groundwater levels—but it will also absorb more water when there is a flood.
It was interesting that the hon. Lady mentioned the Netherlands. Just last week, I met someone and talked to them about their regional planning and—exactly as the hon. Lady said—how they look at a region and decide what is the best intervention to take in that area. We are looking to introduce a regional approach for water in this country. That is what is on my mind—what is the best answer? Water pollution has not been mentioned in the debate, but we know that too much rainwater ending up in the system can create overflows. If we have areas where we can hold more water—this adds to why we should be doing this and why it is a good thing—that helps to decrease pollution.
Of course, I have huge admiration for Flood Mary, who is a wonderful person; I wholeheartedly agree with the hon. Lady on that. The flood recovery framework is run by the Ministry of Housing, Communities and Local Government, but I will ensure that the hon. Lady’s remarks are heard by the relevant Minister.
The existing flood resilience taskforce, which I have already mentioned, is all about how we prepare not only for more frequent periods of increased rainfall but frequent periods of low rainfall, looking at those two sides of the same coin. As the hon. Lady said, the eighth wettest winter in England since 1836 was followed in some parts of the country by the driest summer in a century. That brings the challenges together.
My focus at the moment is how we take the rain as it falls, and when it falls, how we use it to fill up our reservoirs so we are in the best possible position for March. It is also about how we make it easier for farmers. I am interested in what the hon. Lady mentioned about the work that her farmers are doing in their area. There is a great scheme by a water abstraction group in another part of the country, and it is absolutely one way to go forward. We have brought more people into the taskforce than ever before, and as the hon. Lady mentioned, some of the action groups are taking away specific actions.
I know the hon. Lady was on the Environmental Audit Committee, and one of the things that we have taken from the recommendations in the Committee’s report, which was a really good piece of work, was about how we create that one-stop shop for information. We have launched Flood Action online, which is about helping communities to understand their flood risk and to look for flood information. It would be so helpful if colleagues around the Chamber could help share that and get that information out. While I am asking everyone for favours, the Priority Services Register helps to identify people who are vulnerable and who would need water in case of an outage, because flooding can cause problems with water supply—anything on that would be super helpful.
We have changed the rules on investment. I know that the hon. Lady and I agree on our love of nature-based solutions and slowing the flow, which is a win for everybody. I was pleased to hear that there are some in her area as well. We are talking about a minimum level of investment, so the only thing I would correct my hon. Friend the Member for Stroud (Dr Opher) on is that it is not just a small amount of money that is going in; it is a minimum amount. We set it as a minimum because we want to encourage people to use more nature-based solutions where possible. The pushback I get is that it is not always suitable. Of course, it is not always suitable everywhere, but I think where we can, let us let nature do what it does best. If that helps slow the flow and creates and supports biodiversity, surely we can all get behind it.
While I have the Floor, and I am able to, I will talk a little bit about what we have been doing. After more than a decade of under-investment by the previous Government, we have invested £2.65 billion in our first two years, delivered real change, stabilised the condition of existing defences and done 250 flood defence projects, with new and improved defences coming online. The hon. Lady is right again: the money that we have put into that will prevent an estimated £10 billion in economic damage, provide communities with better protection, restore pride in our towns and defend valuable farmland from regular flooding.
Earlier this year, we announced our 10-year flood and coastal erosion investment programme, which will benefit 200,000 properties over the next three years. The targets are ambitious, but I am proud to get behind them. The programme is forecast to generate more than £27 billion of avoided economic damage, so I think that is pretty good for an investment of £7.9 billion. I think I should have mentioned that earlier in front of the Chancellor, but I will keep mentioning it—almost £7 of benefit for every £1 invested.
The Environment Agency continues to work with Herefordshire council and the River Lugg internal drainage board to reduce that risk faced by local communities. I am aware of the £276,000 investment in a new hydraulic model of the River Wye to improve the evidence base for future investment planning and development decisions along the river.
Turning to house building, although the hon. Lady knows that I am not directly responsible for it, I will reiterate the Government’s stance. The Government are committed to building the homes the country needs while ensuring they are resilient and safe from flooding, and a consultation on the new national planning policy framework concluded recently.
The updated policy clarifies how key flood risk tests should be applied and strengthens policies relating to coastal risk. Policy remains clear that inappropriate development in areas at risk of flooding should be avoided by directing development away from areas of highest risk. Where development is necessary in areas at risk of flooding, permission should be granted only if it can be demonstrated that the development will be safe for its lifetime, without increasing flood risk elsewhere. Additionally, the NPPF now requires sustainable drainage systems in new developments, designed to the national standards.
I am pleased that the hon. Lady also mentioned property flood resilience, which is another of my favourite things. The “FloodReady” report was published in October last year, with 22 recommendations and 50 supporting actions across six themes. We are looking at how we can move this forward and keep meeting regularly with the leadership group to see where we can make this something that is considered more of a normal part of something people do every day. The chair now sits on the flood resilience groups, which is really positive as well.
This Government are committed to strengthening resilience to flooding, not only to keep people safe but to support economic growth in rural and local communities across the country. By protecting businesses, reducing disruption and safeguarding jobs, these measures contribute to stability and growth in the face of increased climate change and flood risk. The Government’s record investment in flood defences will benefit communities across the country, and our reforms to the flood funding rules will ensure a more balanced system that strengthens rural resilience and delivers benefits for farming communities and the environment alike. This is a personal priority for me, and it is a privilege to be the Minister responsible for flooding. I remain determined to ensure that our approach to flood risk is effective and co-ordinated to support the public we all serve.
Question put and agreed to.
Draft Private Rented Sector Database Regulations 2026
(1 day, 8 hours ago)
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The Committee divided: - Ayes: 11 / Noes: 6 - Question accordingly agreed to.
The Minister for Housing and Planning (Matthew Pennycook)
I beg to move,
That the Committee has considered the draft Private Rented Sector Database Regulations 2026.
It is a pleasure to serve with you in the Chair, Mr Wishart. In our manifesto, we promised to overhaul the regulation of an insecure and unjust private rented sector. Our transformative Renters’ Rights Act 2025, which received Royal Assent on 27 October last year, delivered on that commitment. On 13 November, we published an implementation road map setting out our intention to switch on the provisions of the Act in three distinct phases.
The first phase, which entailed the introduction of the new tenancy regime, was implemented on 1 May this year. We are now progressing with the second phase of our reforms. That entails establishing a landlord ombudsman for the PRS to improve dispute resolution, settling issues between tenants and landlords without costly court proceedings, and introducing our innovative database of PRS properties to bring together key information for landlords, tenants and councils.
The regulations we are considering today concern the latter. They set out the registration framework for the database and are essential to enabling its roll-out, which will commence regionally from 15 December. The database will record information about private landlords and privately let properties in England. It will help landlords understand their obligations, give tenants better information before entering into a tenancy and support local authorities with enforcement. The service will be known publicly as the “Register your rental property” service, but I will refer to it as the database for the purposes of the Committee.
The regulations determine how registering for the database will work in practice. They cover who can make entries, what information must be provided and how the database can be kept accurate over time and up to date. Landlords will be required to make a landlord entry, which will include their name and contact information. Entries for organisational landlords will include information about the organisation and its management. Joint landlords will share the dwelling entry for the property, but each will need their own landlord entry.
Landlords will be required to make a dwelling entry for each property, which will contain information including its address, ownership, property type, rent level and relevant management details. Once occupied, it must include tenancy and health and safety information, including uploaded certificates and information relating to gas, electrical and energy performance information. Landlords will be legally responsible for registration, payment, renewal and compliance. Under regulations, they may, however, delegate the supply of certain information to an agent or property manager to reduce administrative burden.
The regulations also allow entries to be made, updated or renewed by certain third parties in discrete circumstances—for example, where a landlord lacks capacity or where a possession restriction is in place when a mortgage provider requires a court order possession of an unregistered property. Entries will need to be kept up to date for an entry to be deemed active. Recorded information will be treated as out of date where details no longer reflect the landlord, property, tenancy or relevant compliance position. It must generally be updated within 28 days. Regulations give the database operator the ability to correct errors and remove entries that do not meet the requirements for inclusion. We will issue guidance on the operational detail, including on the verification of entries by local authorities.
The regulations require landlords to pay a fee to make or renew a dwelling entry. The instrument does not set the fee, but it does delegate that to the database operator. The operator is required to set the fee by reference to the relevant costs as specified in the Renters’ Rights Act. We have separately announced the fee of £65 per property per year, pro-rated during the initial roll-out to ensure that costs remain fair and that those registering first are not paying more.
This is the first of two statutory instruments needed to implement the database. Following parliamentary approval of this first instrument, roll-out of the database will commence on 15 December. Each region will be rolled out in one-month intervals. When a region’s registration window goes live, landlords will have three months to register properties in the region. We have issued guidance showing the order and timings for that. All relevant entries are required to be made by the end of 14 November 2027.
A second statutory instrument will cover the public-facing side of the database, the addition of specified breaches and offences committed by landlords, and further data sharing. We will commence that as soon as possible following completion of the initial roll-out. It will concern what information is made visible to the public and wider data-sharing arrangements. Those matters are not in the scope of these regulations.
To conclude, these regulations put in place the operational requirements needed to begin the roll-out of the PRS database. They are a critical step toward a more transparent and enforceable PRS system, supporting compliance while giving tenants better information about the homes they rent. I commend the regulations to the Committee.
Gareth Bacon (Orpington) (Con)
It is a pleasure to serve under your chairmanship, Mr Wishart—in this case, I think it is my first time. I welcome the opportunity to sit opposite the Minister again, and I appreciate the remarks he has made in this debate. I also welcome this opportunity to address the regulations on behalf of His Majesty’s Opposition.
A fair, honest and accountable private rented sector is important for landlords, agents and tenants alike—I think there is no dispute on that. Indeed, any system concerning people’s homes and property must be transparent. From what I have heard, providers in the private rented sector are broadly united in agreement on that point. The National Residential Landlords Association said,
“If designed well, the Database should make it easy for landlords to demonstrate compliance with their obligations…whilst empowering tenants to distinguish between the responsible majority and the rogue and criminal minority of landlords.”
The Large Agents Representation Group said:
“With the correct design, it would make compliance easier to demonstrate for landlords and their agents…give tenants greater confidence about the homes they rent and provide local authorities with better information to target enforcement against those who fail to meet the required standards.”
However, the NRLA has described these regulations as “a costly mess”. The idea of a national register is not in itself disagreeable, but the proposed implementation and structure of this database is alien to any common-sense approach. First, and most strikingly, the Government have designed the database with barely a fifth of the providers in mind. Landlords with a single property are responsible for just 21% of tenancies in England, according to the 2024 English private landlord survey. The other roughly four fifths of tenancies are managed by landlords with more than one property, including some with thousands. Indeed, around one in five landlords hold nearly half of all tenancies.
It is 2026. Advanced technology is available, yet the Government’s proposals envisage the manual uploading of each individual property. The regulations as they stand make no provision for bulk uploads, forcing landlords to upload properties one by one—Noah processed more animals on to the ark at a time than that. Each property requires around 70 data points, so that is an awful lot of admin with huge time implications, and much of the information required is already submitted to councils through existing licensing schemes.
The Large Agents Representation Group, which represents some of the largest portfolios in the country through clients such as Chestertons, Hamptons, Knight Frank, Savills and Foxtons, calculates that if it takes 10 minutes to register an individual property, as the Government’s estimate apparently shows, that means over 1,600 staff hours for a 10,000 property portfolio—or about 3,300 hours for the 20 minutes it actually expects it to take.
On that point, larger providers disagree with the Government’s estimate of the time it will take to upload data, so the associated costs of uploading per property could be even higher. Assuming that it takes 30 minutes per property and there are seven productive working hours in a day, that amounts to 214 working days for a 3,000 property portfolio and 714 days for a 10,000 property portfolio.
That is a long way from being the only problem with the proposed database. The regulations stipulate that landlords must start and end the registration themselves, and agents can supply only certain information. That directly contradicts the Government’s impact assessment, which assumed that agents would register on the landlord’s behalf.
Then there is the lack of an audit trail. Because of the system favoured by the Government, landlords have no ability to verify and validate data on a portfolio basis. They have no access controls nor an audit trail for data uploads, changes or deletions. The consequence of that is obvious: a heightened risk of exposure to administrative errors, consequent fines, which can range from £7,000 to £40,000, and a host of compliance and audit risks.
Then we come to the subject of cost. The Renters’ Rights Act included in its impact assessment an estimated data registration fee of £28.85 per property every three years. Now the Government have confirmed a fee of £65 per property every single year, as the regulations require entries to be renewed every 12 months. For the 80% of landlords in the market who care for more than one property, that represents a significant and unplanned recurring cost, and no one in the sector knows where the £65 figure came from nor how it can be justified. Perhaps the Minister can provide a clear explanation in his closing remarks of how that £65 has been calculated.
Although the providers in the private rented sector are in broad agreement with the concept of a database, they are also united in viewing the approach of this Government as a total disaster. None of the concerns that I have outlined should come as news to the Government, because they have all been raised directly with Government officials by industry representatives. Many of those who I have spoken to thought that the Government had heard their concerns and were making adjustments, only to discover later that they had been ignored entirely. How do the Government expect to earn or maintain the trust of the whole sector when they ignore its concerns and blindside it with extra financial and labour costs?
The Large Agents Representation Group has summed up the Government’s proposals:
“Instead of making best use of data already held across Government and other established systems…the proposed approach required landlords and agents to manually and repeatedly input and maintain information that in most cases is already available elsewhere…creating unnecessary duplication, administrative burden and risk of inaccuracy for all stakeholders. The decisions being made now about its underlying architecture risk embedding unnecessary bureaucracy and practical problems from the outset. This is concerning when significant fees are being imposed and non-compliance carries substantial and lasting penalties.”
The significant additional costs and administrative burdens imposed by this approach are likely to have damaging repercussions. Voices in the build-to-rent sector, a sector vital to assisting in the delivery of new homes, have said
“This will inevitably deter much-needed investment in new homes…particularly at this time of ‘viability crisis.’”
These are just a few of the significant issues shared with me by industry. The database, as proposed by the Government, is not fit for purpose. It is not good enough to impose something that everyone knows is not going to work just so that the Government can claim that they are taking action. The regulations represent the very worst of a Government hellbent on regulating first and worrying about the consequences later. Empty promises of continuing improvements do not cut the mustard. The sector, already saddled by over-regulation and tax hikes, needs efficiencies, not even more constraints.
I implore the Minister to pause the impending roll-out of the regulations, which are due for implementation in just a couple of weeks’ time, scrap the current proposals and produce new ones after proper consultation with industry. I say that more in hope than expectation, so the Opposition will seek to divide and vote against the measures.
Gideon Amos (Taunton and Wellington) (LD)
It is a pleasure to serve the Committee with you in the Chair, Mr Wishart. I declare an interest as a registered social landlord.
The Liberal Democrats come at this from a somewhat different starting point than the official Opposition, in that we supported the Renters’ Rights Act and we strongly supported the introduction of a database of landlords as a source of really important basic information that tenants should be able to have. We have been consistent in supporting the concept of what is in front of us.
The system that has been devised, however, is nothing short of a fiasco and will undermine the whole purpose of the database. As well as being harmful—or challenging, to say the very least—to landlords and damaging to their business operations, it will frustrate tenants if landlords need to spend that amount of time updating the register one property at a time. Let us imagine that someone is an institutional landlord with 4,000 dwellings. If only one can be entered at a time, it will take weeks and months, by which time the database will be completely out of date for tenants looking at it. The problems of the database will affect not only landlords, but tenants.
We desperately need more build-to-rent landlords to build more rented accommodation. There is a debate going on about the Renters’ Rights Act and whether landlords have withdrawn from the market. I do not intend to get into that debate in detail—the Joseph Rowntree Foundation takes a different view and says that there is a certain amount of churn—but one thing is absolutely clear: the Act is challenging the sector to a huge degree and causing a great deal of change and churn. The last thing that it needs right now is a database that, for our biggest landlords, is completely impossible to complete in any economic or efficient way.
I am grateful to Real Estate:UK for its briefing, and I make no apologies for reading out parts of what it has told me. For example, it says that
“a single employee working through a 5,000-home portfolio would need 2,500 hours or around 312.5 working days”
to upload. That has to be done every year. It continues:
“Without any fee discount or integrative information provision process, a BTR landlord with a 5,000-unit portfolio can expect to spend c.£378,000 a year on registering their properties.”
Furthermore, it says:
“To comply both with selective licensing and the Service, a BTR landlord can expect to pay over £4,000,000 across a 5,000-home portfolio.”
As the Opposition spokesperson, the hon. Member for Orpington, pointed out, the costs are above what was expected at the time of Act’s passage.
It is surely not beyond the wit of Government to produce a database where someone can make multiple uploads and does not need to upload one at a time, and a database that is more efficient than the one we have at the moment where someone cannot even copy data across from one property to the next—even if they have 250 properties that are exactly the same, they have to enter each one individually without copying across any of the data. If the official Opposition press the measure to a Division, which they clearly will, we Liberal Democrats will also vote against it. It is bad for the Renters’ Rights Act, bad for tenants, bad for landlords and bad for the build-to-rent sector that we need to support our housing market.
Sir John Whittingdale (Maldon) (Con)
I will not detain the Committee for long. I just want to say that my hon. Friend the Member for Orpington has made some excellent points drawing on some of the information supplied by the organisations representing landlords with multiple premises, as has the Liberal Democrat spokesman, the hon. Member for Taunton and Wellington. I would like to declare that I am a landlord of a single small one-bedroom flat in Westminster. It already falls within the Westminster city council selective property licensing scheme, which costs in the order of £1,000 and requires me to upload a great deal of information, all of which, as I understand it, is now going to be duplicated in this system. I would like the Minister to explain how that will provide additional information to tenants in areas where it is already available through the local authority.
The Liberal Democrat spokesman referred to the effect of the Renters’ Rights Act, which I think has already increased the disincentives for landlords to go into the private rented sector. I have just listened to the Chancellor explain to us at some length why he is going to bring in better regulation, and at the same time commit to getting rid of homelessness, both of which are admirable objectives that I share, but I am not sure this measure will help deliver either of them.
Matthew Pennycook
I think it is the first time in this Parliament that I have seen the Liberal Democrats and Conservative party in unison. [Interruption.] But if they will let me finish, given that His Majesty’s Opposition opposed the Act outright, I am not surprised by their opposition to this measure, although I am somewhat surprised by the Liberal Democrats’ opposition. I take the challenges on the various points in good faith, however, so let me try and reassure hon. Members about what we are trying to achieve here.
First, on how the data is uploaded, I will make it clear that it is not the case that each landlord needs to log on and upload the same information each year starting from scratch. They need to update the information only if the information they have already entered has changed. Once the initial information has been uploaded, they will not need to change it if it remains unchanged.
We have explored options for enabling bulk uploads—something I have pushed officials on. I started from the same position that Opposition Members did: “Can’t we just allow bulk uploads?” We have concluded, after looking into the issue in some detail, with quite a significant amount of sector engagement, that due to significant challenges with data validation and error handling, traditional solutions such as uploading Excel files—one of the options put to us—would add complexity for the user. We are designing the service to be as straightforward as possible for landlords, including those with larger portfolios. To meet their needs, we will enable organisations to add multiple employees to their accounts, enabling easier administration.
We are looking at how to make it easier for landlords, particularly those managing large portfolios, to connect their existing property management systems directly with the service and to create some efficiencies in that respect. We will look to provide a secure digital connection that landlords and their technology providers can choose to integrate with, reducing the need to enter the information manually to register their properties. We will continue to explore opportunities to improve functionality and reduce burdens as the service develops. I hope that that has answered some of the points about bulk data entry.
Matthew Pennycook
Well, we are going to look to integrate the management systems of large portfolio holders. I was asked, “Does each large portfolio holder have to sit there and add in each entry every year?” That is not the case. I am trying to clarify some of the misconceptions that have been put to me.
On selective licensing, as we debated at length through the passage of the Act, selective licensing and the database have different purposes. The database will not duplicate or replace selective licensing. We recognise the important role that licensing can continue to play where it is used appropriately. The national database will provide consistent information about private landlords and rental properties across England, supporting transparency, compliance and local authority enforcement.
We will, however, continue to review how selective licensing and the national service interact as implementation progresses, with a specific view to reducing duplication. I very much agree that, in terms of the information currently held when a selective licensing scheme is put in place, there are ways to reduce the amount of that required once the database is in place.
The shadow Minister, the hon. Member for Orpington, asked why letting agents cannot register on behalf of landlords. One of the key goals of the database is to improve landlord awareness and capability. Responsibility for ensuring that registration requirements are met will remain with the landlord throughout. Letting and property agents will not have a mandatory role in registration and will not be separately registered through the service. Requiring landlords to initiate registration ensures that they engage with their legal responsibilities from the outset.
We do, however, recognise that letting and property agents play an important role in supporting landlords to meet these responsibilities. To reflect that, agents will be able to support landlords by providing certain information once the landlord has started the registration process. Again, I come back to the importance of the initial registration in this first phase of the roll-out. Where an agent agrees, the landlord will be able to delegate the provision of specific tenancy and health and safety information to them.
A series of points were put to me about the fee. The fee is set at £65 to fund a national service. It is fair, sustainable and capable of supporting effective enforcement. I think the shadow Minister has put to me on several occasions, as has the hon. Member for Taunton and Wellington, the need to properly fund local authority enforcement in the private rented sector—here we are with the means to do so. Every landlord is required to pay the annual £65 fee for each property they register on the database. As the fee is charged per property, landlords must pay each time they register a different property.
The fee has been set in that way to balance fairness and sustainability for landlords with the cost of operating the service and tackling non-compliance in the private rented sector. The shadow Minister is absolutely right that the NRLA and other organisations support the database in principle, because it will allow us to bear down on the unscrupulous landlords in the market who do much to colour the reputation of the good landlords out there.
Sir Ashley Fox
In my constituency of Bridgwater in Somerset, there is a chronic shortage of rented accommodation. I am concerned that this expensive and cumbersome system will deter further private landlords from renting their properties. If the Minister does not have a system that can process bulk uploads, he should tell his officials to think again—to go out into the private market and get a system that works. He should scrap these regulations and tell his civil servants to think again.
Matthew Pennycook
I do not think we need to think again, because we are already thinking about this issue. I say to the hon. Gentleman again that we are exploring how we can make it easier for landlords, particularly those managing large portfolios, to connect their existing management systems directly with the service and integrate them.
Matthew Pennycook
The hon. Gentleman shakes his head at me, but if landlords have a way of integrating their service and of providing that faster upload, that is precisely what we are trying to look at already.
Gareth Bacon
Would it not, then, be better for the Minister to pause these regulations now, explore that fully and come back once he has adapted the system, so that that can be incorporated? This comes back to the point I was making about regulating now and trying to fiddle with it later. It is not going to work, as large landlords are telling the Minister. Why not pause, work it out and then come back?
Matthew Pennycook
We are not going to pause—I say this to the shadow Minister quite plainly—because we want the database in place. It has benefits for landlords in understanding their legal responsibility, and it has benefits for tenants. This is the first of two statutory instruments, as I have made clear. We think we can do that work, working with the sector to understand how we might integrate their management systems.
Matthew Pennycook
I will give way, and then I am going to make some progress, because the same points continue to be raised.
Sarah Bool
I was formerly a commercial property lawyer, so I want to bring up a practical point about enforcement. The ambition behind the regulations—to make sure that everybody, including tenants, has the information that they need—is positive, but the practical reality is that if they cannot be enforced properly, it will cause problems and delays in the rental sector. I advocate for a pause—that is essential. If information needs to be gathered and uploaded for potentially up to 10,000 properties—an extremely large number—it will probably take a year or more to get that information up. Have we thought through the knock-on impacts? I encourage exercising caution, having seen the practical reality of being on the other side when I was a lawyer back in the day.
Matthew Pennycook
We have thought through the timetable and the implementation, and we are confident that we can proceed as we intend to.
Matthew Pennycook
No, I will make some progress.
Fees will support activity to identify and act on non-compliance with the reforms in the Renters’ Rights Act. The funding will support councils, ensuring that they have the staff and skills required to identify and tackle non-compliance and to drive landlords who persist in breaking the law out of the sector. Fees will be pro-rated during the initial roll-out, ensuring that landlords in regions required to register early are treated fairly. To go back to my opening remarks, we will roll-out the measure on a regional basis from December. I think I have answered all the points put to me.
Gideon Amos
As always, the Minister is being very generous with his time. He has answered a number of the points raised—I will give him that—but if institutional landlords are paying millions of pounds in fees, the least they should expect is to have a database that works. I welcome the Minister saying that he is continuing to look at the issue, but could he go a smidgen further and commit, on the record, that the Government will ensure that bulk uploads can be achieved? That is the huge failure of the system.
Matthew Pennycook
I cannot give the hon. Gentleman that commitment. The Government have looked into the practicality of bulk uploads, and we do not think it is, in the terms he has put it to me, a workable solution. As I have tried to make clear at several points, we are looking at how we can integrate the management systems of larger landlords into the database in a way that does not require them to manually input each of their properties, as has been put to me in this debate. We are looking for those efficiencies—why would we not look for those efficiencies?
On the hon. Gentleman’s point about fees, to be clear, it is not the Government’s intention to use the fees to fund wider costs that are not connected to the private rented sector, but some of the fees will go towards local authority enforcement. As we have debated previously, it is incredibly important that local authorities have the resources to properly enforce the Act.
To conclude, the regulations set out the practical steps required to deliver the PRS database, and set the registration framework that landlords, local authorities and the database operator will follow. In commencing the roll-out of the database, the regulations will support landlord compliance, strengthen local authority enforcement and give tenants better information about the homes that they rent. I therefore commend the regulations to the Committee.
Question put.
Draft Border Security, Asylum and Immigration Act 2025 (Specified Purposes Related to Policing) Regulations 2026
(1 day, 8 hours ago)
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The Minister for Border Security and Asylum (Anna Turley)
I beg to move,
That the Committee has considered the draft Border Security, Asylum and Immigration Act 2025 (Specified Purposes Related to Policing) Regulations 2026.
It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I will set out to hon. Members what this draft statutory instrument will do in broad terms before turning to the why. The regulations are made under section 36(8) of the Border Security, Asylum and Immigration Act 2025. They specify the meaning of “purposes related to policing”.
The draft regulations enable the Secretary of State for Transport—in practice, the Driver and Vehicle Licensing Agency acting on her behalf—to share trailer registration information with the police for use for policing purposes. Where the 2025 Act permits, the regulations also enable the onward disclosure of trailer registration information by police and Home Office recipients to a person exercising public functions for use in connection with the same policing purposes. In short, the instrument gives full effect to the information-sharing framework established by Parliament, enabling trailer registration information to be shared and used for the full range of specified policing purposes.
I now turn to the wider context in which the draft regulations sit. The overarching aim underpinning them is to strengthen the use of data in support of policing and border security. In 2018, Parliament enacted the Haulage Permits and Trailer Registration Act 2018, establishing the trailer registration scheme administered by the DVLA on behalf of the Secretary of State for Transport. For the avoidance of doubt, the trailer registration scheme does not collect biometric information.
Hon. Members will recall the tragic deaths of 39 Vietnamese nationals who were found in a lorry in Essex in October 2019. The police faced challenges in their response, because of obstacles to identifying who the trailer belonged to. Subsequently, the 2025 Act created an information-sharing gateway for trailer registration information to be supplied to specified law enforcement bodies. The Act allows the DVLA to supply trailer registration information to the police for specified purposes related to policing, and its onward disclosure by the police and the Home Office for the same purposes. However, Parliament also required the meaning of “purposes related to policing” to be set out in regulations subject to the affirmative procedure. That requirement has brought this draft instrument before the Committee.
Before I get into the specifics, I will make two important points. First, without the draft regulations, the relevant provisions that I referred to would not be fully operable. Secondly, in practice, police use of trailer registration information would remain confined to law enforcement and national security purposes.
Let me now turn to the detail. The draft regulations define “purposes relating to policing” by reference to well-established policing functions. They specify that the purposes include: first, protecting life and property; secondly, preserving order; thirdly, preventing the commission of offences; fourthly, bringing offenders to justice; and, finally, any other police duty or responsibility arising from common or statute law. That means that trailer registration information can be used where it is operationally necessary, ensuring that the DVLA can give forces timely access when they need it to carry out their vital functions. That might, for example, be in a safeguarding context. Other potential uses include roads policing or the response to serious incidents, as well as criminal investigations.
I should clarify what the regulations do not do: they do not create new powers, nor do they expand the categories of information that may be shared. They simply define the scope within which existing statutory powers may be exercised. Clearly, the sharing and use of information must be supported by appropriate safeguards. I therefore say to the Committee that the draft regulations are limited and proportionate. They do not impose new duties on the police or the Home Office. They do not alter the wider legal framework in which they sit. Existing protections continue to apply, including under the Data Protection Act 2018, the Human Rights Act 1998 and the relevant public law principles. The Information Commissioner’s Office has been consulted and has expressed no concerns in respect of this legislative change. Taken together, the safeguards are there to ensure lawful and proportionate use of trailer registration information.
Under section 36(9) of the 2025 Act, the Home Office consulted Scottish Ministers, the Department of Justice in Northern Ireland and policing bodies across the UK. Responses indicated broad agreement that the proposed definition reflects all policing functions. Where consultees suggested refinements, the Government concluded that these matters were already encompassed within the proposed definition, and that the approach aligns with the established policing codes of practice and information-handling frameworks. In Scotland, the Scottish policing principles will continue to apply and did not need to be separately referenced in the draft regulations. The draft regulations will apply across the UK, and they are expected to be implemented through existing operational and IT processes without the need for new systems or additional funding.
The draft regulations are necessary to give full effect to the trailer registration information-sharing provisions in the 2025 Act. They are designed to bring clarity and consistency to processes that, subject to appropriate safeguards, will support the police and the Home Office in their vital work. I commend the draft regulations to the Committee.
Blake Stephenson (Mid Bedfordshire) (Con)
It is a pleasure to serve under your chairship, Mrs Hobhouse. I thank the Minister for those detailed opening remarks. The protection and enforcement of our laws protecting our borders must be an absolute priority for Government. Whether individuals are coming across the channel in small boats or concealed in trailers, we must do all we can to prevent and deter these dangerous journeys.
Unfortunately, the tragic consequences of people smuggling in trailers are all too clear. It is right that the people who previously committed these crimes are now in prison, but that should not prevent us from remaining vigilant and taking steps to stop such tragedies from happening again. During the Border Security, Asylum and Immigration Bill Committee, the Government received our support for the clauses that underpin the draft regulations. Therefore, they will continue to receive our support for them today.
The specified purposes related to policing that are set out in the legislation are very sensible and will rightly enable the lawful sharing of trailer registration information held by the DVLA with policing bodies. Allowing the police and the Home Office to share that information where it is used for the same purposes is also an entirely appropriate measure. I hope the Government will utilise these powers effectively to identify and arrest anyone responsible for illegally bringing individuals into our country.
Given the time available to scrutinise the Government’s approach to border security in the ongoing Immigration and Asylum Bill Committee, which the Minister and I are enjoying session after session, I will not belabour the broader issues with this approach. However, I hope the Government will acknowledge that if we are to stop illegal migration, which should be the overall aim, we must not only seek to smash the gangs, as this legislation aims to do, but deter all forms of illegal entry.
Illegal entry to the UK is both incredibly dangerous and damaging to the British population, and we owe it to both parties to remove the incentives that encourage illegal migration. To overcome the failures that we have seen in tackling illegal migration, measures such as the draft regulations need to be accompanied by a message that anyone who comes to the UK illegally will not be allowed to remain in this country. I fear that without such changes, this well-meaning legislation, while an improvement, will prove unable to address the much broader problems.
Dame Karen Bradley (Staffordshire Moorlands) (Con)
It is a pleasure to serve under your chairmanship for what I believe is the first time, Mrs Hobhouse. I have a message to the Whips: if they put the Chair of the relevant Select Committee on a Delegated Legislation Committee, they may find that it takes slightly longer than they were expecting—[Interruption.] I am fine for now, but the Whips might want to think about that.
I want to take the opportunity put a few questions to the Minister. First, will this measure be used purely for immigration offences? When I was invited by the Metropolitan police to join the policing operation for Notting Hill carnival, I was very struck that the majority of the offenders who were picked up by the facial recognition technology being deployed were actually wanted for sexual and domestic abuse offences.
I thought that such an event was a very good way to attract those offenders, as it is one where people are scantily clad and therefore might attract those who are more inclined that way—[Interruption.] I can see Members’ looks of shock, but that is the point the police made to me. The Notting Hill carnival is an occasion that people want to attend purely for the opportunity to offend and sexually abuse those taking part, which is absolutely wrong. The facial recognition technology was picking up sexual offenders, not drug offenders or the other things that we might think of with Notting Hill carnival. This legislation could be used beyond just immigration enforcement—for violence against women and girls and other offences—and I hope the Minister can confirm that it will be.
I am also curious to know whether “policing” will include immigration enforcement. Again, from the work we have done in the Select Committee I have been struck by the number of people who have arrived, claimed asylum and do not have the right to work but do continue to work, and immigration enforcement should be able to share information on trailers and other vehicles if people who are here without the right to work are trying to work, so that we can stop that and remove that incentive.
My final point is wider. I wonder whether the Government are looking at extending the registration scheme to boat engines, perhaps in a Europe-wide scheme. If we had a Europe-wide register of boat engines, law enforcement across the continent might have more traceability of those boats that are trying to leave northern France, Belgium and other places. I wonder whether there may be scope to further the measure.
4.41 pm
Anna Turley
I thank all Members for their thoughtful consideration of the statutory instrument. I welcome them—that is why we are here. I will start by mentioning some of the broader context, which I hope will address some of the issues raised by the right hon. Member for Staffordshire Moorlands.
The statutory instrument is in the context of our broader work to strengthen border security and tackle organised crime, which we take extremely seriously. I am grateful to Opposition Members for their engagement through the Immigration and Asylum Bill Committee. We are looking through the border security plan to target the whole criminal model, as the right hon. Lady says, from smugglers to the supply of boats, engines, international routes used, criminal finance and online advertising.
We know that by the time people get to the beaches of France, it is almost too late. We are working throughout the whole process to try to address the causes, the supply chains and the organised crimes behind this. International co-operation is central to that effort, and we are strengthening co-ordination with France and other European partners while disrupting organised criminal networks, equipment and facilitators further upstream. To reassure the hon. Member for Mid Bedfordshire, that effort is producing results, as he knows: small boat arrivals down by over 40%, more than 6,500 organised immigration crime disruptions and over 80,000 removals. But these gangs are highly adaptable; they change launch locations, vessels, supply routes and operating methods when pressure is applied. We are therefore ensuring the system can identify those changes quickly, assign responsibility and respond when new methods become established.
In response to the question from the right hon. Member for Staffordshire Moorlands, I can confirm that the instrument will apply to all relevant policing purposes, which include immigration enforcement operations, the issue that she mentioned of sexual offending and other policing uses. Its purpose is far broader than purely immigration. It is to support the police to have access to trailer information that, by some anomaly, they have not had access to historically.
I am grateful to colleagues for their thoughtful and constructive questions and points, and for their support for the draft regulations. They are proportionate and focused, and do not introduce new powers to collect information, nor do they create new policing functions. They provide clarity and consistency, ensuring that trailer registration information can be used in support of legitimate policing activity, subject to the safeguards and protections that Parliament has already put in place. I commend the draft regulations to the Committee.
Question put and agreed to.
Westminster Hall
(1 day, 8 hours ago)
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Higher Education Funding
(1 day, 8 hours ago)
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Abtisam Mohamed (Sheffield Central) (Lab)
I beg to move,
That this House has considered higher education funding.
It is a pleasure to serve under your chairship, Ms Vaz. As co-chair of the all-party parliamentary groups on students and for international students and a member of the all-party parliamentary university group, and representing a constituency with one of the largest concentrations of students, I know at first hand the enormous value of higher education and the growing challenges facing the sector. It is worth saying from the outset that I am applying for a separate Backbench Business debate specifically on students that will cover the cost of living, maintenance support and the wider student experience. Those are important issues in their own right, but today’s debate focuses on the foundations and long-term sustainability of higher education itself.
My constituency is home to two outstanding universities: the University of Sheffield and Sheffield Hallam University. I have had the privilege of studying at both institutions and, like many people, I know personally the doors that higher education can open and the horizons it can broaden. We have a world-class higher education system whose institutions are often seen as a great equaliser, especially for working class communities. Walking into universities, we know right away why they are described as centres of innovation and industry. A good university acts as an anchor in our cities and is far more than just lecture halls and graduation ceremonies.
Mr Gregory Campbell (East Londonderry) (DUP)
I thank the hon. Member for giving way and congratulate her on securing the debate. On providing opportunities, particularly for working-class communities, would she agree with me that in my area, the likes of regional colleges, both on the north coast and the north-west, offer excellent opportunities, particularly for people who feel disadvantaged and who possibly left school without any qualifications and are really caught in a bind? The colleges offer them a way out of the position they are in with prospects for the future and for jobs.
Abtisam Mohamed
I agree with the hon. Member. He makes an excellent point. I will come on to talking about disadvantaged students and the role that universities play.
Universities train the nurses and doctors who treat us. They train the teachers who educate our children, the engineers who build our infrastructure, and the researchers whose discoveries save lives. They support businesses, attract investment, create jobs and drive progress. In Sheffield we see that contribution every day. Sheffield Hallam University trains around 3,900 healthcare professionals and 2,800 teachers every year. In a single academic year, those healthcare students contributed more than 365,000 hours through NHS clinical placements.
Meanwhile, the University of Sheffield generates an estimated £4.82 billion for the UK economy and supports 138 start-ups and spin-outs. Its research activity contributes billions more in economic value. Although those figures are impressive, behind them lies a fracture point. There is a growing disconnect between what we ask our universities to deliver and the resources that are available. We want universities to drive growth to boost productivity, tackle regional inequality and undertake world-leading research. We want them to support the NHS, public services and local economies, yet the sector faces a financial crisis that threatens its very survival.
We have to recognise the failed funding experiments of the last 16 years and bring them to an end. I draw colleagues’ attention to the Education Committee’s comprehensive report from earlier this year, “Higher Education and Funding: Threat of Insolvency and International Students”, that identifies the real-terms cut in undergraduate tuition fees as a huge factor, though one of many, in financial instability. It is also widely recognised that the UK’s public education funding levels rank well below the OECD average of around 70%. Funding levels have fallen so far that funding direct to universities now makes up just £2 billion out of a total of £16 billion—the complete inverse of what it used to be. The majority of Government funding is spent on a bloated student loan system that is wildly out of control, while current repayment threshold freezes are punishing lower-earning graduates. Last year, the Office for Students forecast that up to 40% of higher education providers will be in deficit. Put simply, far too many institutions are being forced into a cycle of cuts just to temporarily balance the books.
James Naish (Rushcliffe) (Lab)
My hon. Friend will be aware of there being around 600 job cuts at the University of Nottingham. There have been alternative proposals from staff—120 in total—but the impact will be significant. What has been noticeable in my conversations with the university is the emphasis on commercial elements, whether that is covenants, 30 days’ access to cash or access to a revolving credit facility. Does she agree that that emphasis has gone too far? We have forgotten what the public benefit of universities is, and the Government and universities need to reflect on that.
Abtisam Mohamed
I agree with my hon. Friend; he makes an excellent point. Nottingham is seen as a university that needs support, and I think colleagues across the sector will look to see how Nottingham is supported alongside their own universities.
As I was saying, far too many institutions are being forced into a cycle of cuts just to temporarily balance the books. Over recent months, I have spoken to university leaders, staff, representatives of trade unions including the University and College Union, students and employers. While they all have very different perspectives, they all present a common diagnosis: the current funding model for higher education does not work. That raises a fundamental question: if we recognise universities as national assets, as our rhetoric often does, why have we systematically stripped back public funding and left them to shoulder so much of the financial burden themselves?
Jessica Toale (Bournemouth West) (Lab)
I thank my hon. Friend for setting out the real challenges that our higher education institutions face. Does she agree that the difficult financial position universities are in is causing them to oversubscribe their courses, putting unsustainable pressures on their workforce, reducing the student experience and increasing financial instability as a result of that boom and bust?
Abtisam Mohamed
My hon. Friend makes an excellent point. Universities need to be supported, so that the financial burden is not purely left for them to deal with.
I now want to come on to international students. International students should be welcomed as an enrichment of our campuses and strengtheners of Britain’s international ties. International students’ fee income has become an essential pillar, propping up our universities, cross-subsidising home students’ education and supporting research that would otherwise be cut, but universities did not become dependent on international fee income by choice. They have increasingly relied on it because domestic teaching and research funding has failed to keep pace with the real costs of delivery.
I and many others remain concerned about using an international student levy to pay for maintenance grants. It is seen as little more than an additional tax on one of the UK’s most successful exports. At a time when global competition for talent is increasing, we should be asking how we can strengthen one of Britain’s greatest success stories, not how we can make it less attractive. A restructured maintenance support system for home students, separate from international fee income, would be a vastly more successful policy, and it is one that I will continue to support.
Fundamentally, any solution to the sector’s funding crisis and support for the most disadvantaged home students should not further destabilise university finances. That is especially important in a context where universities are already cutting staff, courses and research programmes. Data from Universities UK shows that nearly eight in 10 universities have pursued voluntary redundancies in the last three years, and the same amount have frozen recruitment. The UCU estimates that 30,000 jobs have been lost over the last three years. That is devastating, and we should be clear about what it means: it means rising workloads and pay erosion for remaining staff, and it means staff who support students every day losing their livelihoods.
In Sheffield Hallam University’s case, more than 1,200 posts have gone in just over two years. Having met staff representatives and UCU members, I know that these numbers are not abstract; they represent people who have mortgages to pay, families to support and bills to meet. I also hear from many talented academics who are moving from one short-term arrangement to another, with little certainty about their future. The consequences are felt by individuals and the community beyond the university gates, but there are also implications for the future of British research. A system increasingly characterised by insecurity will only drive talented people away.
If universities are one of the UK’s greatest assets, why are they not considered to be involved in our economic growth? Although we speak of growth, skills and Britain’s future competitiveness, we see growing financial fragility across the very institutions that help to realise those ambitions. We cannot continue to expect universities to do more with less. Chasing efficiencies erodes capacity, and once capacity is lost, rebuilding it is neither quick nor easy.
I have a number of questions for the Minister. First, what is the Government’s long-term vision for higher education? I want to know not simply how individual institutions will survive the next financial year, but how universities will fit into a national strategy for growth, skills, research and regional development.
Secondly, does the Minister recognise that the current funding model has become overly reliant on international student income, mainly because teaching and research funding no longer meets the real cost that universities face? If the Government continue with the international student levy, what impact will it have, and how will fluctuations in student recruitment affect university finances? Does the Minister recognise that the institutions are likely to pass on those costs through higher fees, potentially making the UK a less attractive destination in the international student market?
Thirdly, does the Minister believe that the current balance between public and private contributions to higher education funding is sustainable? The Government now contribute about 16p for every £1 spent on teaching. Does the Minister believe that that is a viable basis for the future funding of higher education? Will the Government examine how to move towards a fairer balance between the individual and state contributions in the long term in recognition of the enormous public benefit that universities provide?
Fourthly, how are the Government assessing the economic impact of university job losses? We cannot call universities regional anchors while simultaneously accepting the loss of thousands of highly skilled jobs across the sector.
Finally, where do universities sit within the Government’s growth mission? If they are engines of growth, they should be treated as such, and they need a funding framework that recognises the enormous contributions that they make to our economy, our public services and our communities.
I want young people in Sheffield to have the opportunities that education gave me. I want our universities to continue training the nurses, teachers, engineers and researchers that our country desperately needs, and I want Britain to remain a world leader in higher education and research. If we want our institutions to survive, we have to stop treating them as an afterthought.
Several hon. Members rose—
Valerie Vaz (in the Chair)
Order. Could Members please remain standing so that the Clerk can make a note of how many wish to speak? Given the numbers, I will have to impose a hard time limit of four minutes.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
“Crisis” and “world beating” are overused terms, and both apply to UK higher education, which, after an over-reliance on international fee income during years of underfunding, feels ready to snap. Four in 10 of the best universities on Earth are in Britain. Imperial College London, whose White City campus is in my seat, is one. It attracts the brightest brains for groundbreaking postdoctoral research, and its Scale Space facility incubates start-ups, but Home Office restrictions on dependants, the cutting of the post-study work visa, indefinite leave to remain changes and the new basic compliance assessment, which has inexplicably resulted in record visa refusals, have threatened all that. In a competitive world, international students have other options, which we see them opting for.
I am also the MP for the University of West London. It is not top 10, but it is a local anchor institution. It is a big employer and a vital hub for under-represented communities. Both universities are concerned by the international student levy. The return of maintenance grants, which the proceeds will fund, is welcome, but the £925 fee that universities must pay per international student per year of study at a time of falling student numbers is unviable. Given how course fees vary, why not a percentage—6% was originally mooted? What is the logic behind the the first 250 students being free of the charge? Sadly, the University of Suffolk has for the first time gone below that number—an unwanted situation—thanks to that perverse disincentive. Could we not increase the number?
Why are only the subjects in the Government’s industrial strategy funded by the grants? They include computing, maths and pure science, but no arts or social sciences, which potentially leaves those subjects to elites. Creative sector education—including at UWL, the old Ealing School of Art, which specialised for 100 years in art and the humanities and which was where the Who formed and Freddie Mercury studied—risks being wiped out along with jobs, as the University and College Union fears, because such subjects do not fit financial forecasts.
Our universities are not simply dreaming spires and ivory towers. They are essential invisible exports offering soft power and regional capacity building, with growth in every postcode. The University of Westminster, the first polytechnic, was founded to enrich the working man; its Soho Poly venue was where Pink Floyd played their early gigs, and things still happen there. We must treasure our wide diversity of institutions, not just throw them to the wall.
The Office for Students estimates that 119 universities—43% of the sector—will be in deficit this academic year, with 24 in danger of bankruptcy. After mergers and departmental closures, the next step, as predicted in the Education Committee’s excellent report, is insolvency. The Oxbridges will go from up here to down here, but where will the Suffolks and the UWLs go? Down there? Will it take someone to go bust before the Government finally take notice?
When I taught in the sector, international students, who spend money locally, were seen as the golden goose to compensate for real-terms funding cuts, but our over-reliance is now exposed. The basic compliance assessment’s red, amber and green ratings have become existential. The Government cannot rely on past laurels, then cash-starve a sector, demand gullible international students with limitless pockets, prop it up with staff good will and magically expect growth. The elasticity of demand inevitably snaps.
Jim Shannon (Strangford) (DUP)
As always, Ms Vaz, it is a real pleasure to serve under your chairship. I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for securing the debate, setting the scene so well and enabling us to make a contribution on this incredibly important subject. It is a matter of grave concern for the future of our people, our youth and our economic prosperity in Northern Ireland. The Minister has no responsibility for Northern Ireland, but I always like to bring a Northern Ireland perspective to debates, because what is happening on the mainland is happening to us as well. We are debating the broader systematic challenges facing higher education funding across the United Kingdom, yet, as is so often the case, the view from Northern Ireland reveals a distinct and far more perilous landscape. It is good to see the Minister in her place; I look forward to asking her at least one question, which I hope she will be able to answer.
While universities in England and Wales adjust to tuition fee caps rising to £10,000, our local institutions remain strictly bound by the Department for the Economy. We deliberately keep undergraduate tuition fees lower, at £4,750, to ensure accessibility for our working-class communities. It is important to me as an MP and to our Assembly that we look after them and give opportunity for all. The Labour party wants opportunity for all, I have no doubt, and I wholeheartedly support the motivation of the hon. Member for Sheffield Central.
We need look no further than the devastating crisis that is currently unfolding at Ulster University, where some 735 members of staff—nearly 24% of the entire workforce—have applied for redundancy. The university is forcing through a planned reduction of jobs to plug a catastrophic £25 million deficit. Dedicated lecturers, researchers and support staff across Belfast, Coleraine and Magee are watching their livelihoods vanish. It is gutting our regional skills base, cutting away the fabric of Northern Ireland’s future and threatening the long-promised expansion of the Magee campus in Londonderry.
Mr Gregory Campbell
Does my hon. Friend agree that the issue of the Magee and Coleraine campuses needs to be addressed, particularly the maximum aggregate student number cap, which restricts the numbers that universities in Northern Ireland can take? We have to review that urgently.
Jim Shannon
I thank my hon. Friend and colleague for bringing that issue forward and for backing up practically what he sees on the ground, as I do, from the Northern Ireland perspective. Any decision against the Magee campus in Londonderry means telling the local businesses crying out to fix the skills deficit that the talent will simply not be there. That worries me greatly.
The Provost of Ulster University warned just days ago that those consequences are not abstract, nor are they years away. They are happening at this very minute, as we sit here, and they are affecting student places and long-term investment. Once the intellectual capacity is lost to redundancy, it is incredibly difficult ever to build it back up. Our institutions create value far beyond their campus walls. These are difficult times, and when the Minister responds it is important that we hear of a strategy. Please will she discuss policy changes and strategy with the relevant Northern Ireland Assembly Minister to ensure that we can move forward towards a positive future, even though it looks incredibly black at the moment?
Unlike England, which boasts well over 100 higher education institutions, Northern Ireland has only two for our population: Queen’s University and Ulster University. In a region with only two distinct academic employers, the impending job losses at Ulster University represent not a standard corporate restructuring, but a catastrophic hollowing out of nearly half of Northern Ireland’s university network. Academics and researchers have practically nowhere else to turn locally. These cuts create an inevitable brain drain, forcing elite talent to flee across the water to Great Britain, while triggering course closures that push local students to follow them.
I will conclude, because I am conscious that others want to speak. When one of only two pillars of a higher education framework is forced to cut a quarter of its applicants through redundancy, the structural integrity of the entire region’s skilled economy faces immediate collapse. That is the serious issue we face in Northern Ireland, and that is why I seek the Minister’s help.
Dr Scott Arthur (Edinburgh South West) (Lab)
It is a pleasure to serve under you today, Ms Vaz. I thank my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) for the way in which she introduced the debate. Sheffield University was the first place I visited outside Scotland; I think the Red Deer pub, which is right next to the university, was the first English pub I ever went into.
Before I was elected to this place, I worked in the university sector for 20 years in Scotland. Our universities are among Scotland’s biggest assets. Across the sector, there is incredible innovation. Each year, our universities attract the very best staff and students from across the world. I always say that any country serious about its economy should be serious about its universities. It is great to see our Prime Minister putting universities at the heart of the triple helix model that he talks about so often. In a debate in Westminster Hall 18 months ago, I quoted the then president of NUS Scotland, who warned that Scotland’s education system was “crumbling”. At that time, I hoped our words would prompt the Scottish Government into action. Sadly, they did not, and Scotland’s sector has lurched from crisis to crisis.
Undergraduate university education in Scotland is free, but the sector is grossly underfunded. Broadly speaking, funding per undergraduate student in Scotland is well over £2,000 less per student compared with universities in England. That means less money for facilities and staff wages. I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests: I am a member of UCU and have an ongoing connection with Heriot-Watt University. Because of the huge stresses on the sector, there is industrial action at, I think, six universities in Scotland right now. Industrial action at one university might suggest a local issue, but when it is happening across the country it suggests that the Government need to step up and do something about it.
In my constituency, both Edinburgh Napier University and Heriot-Watt are internationally recognised institutions. They are home to dedicated staff, ambitious students and world-leading research, but both face serious challenges. In the past year, there has been talk of compulsory redundancies and course reductions. There are similar issues at Edinburgh University, which is outside my constituency, but quite a lot of staff and students are based in Edinburgh South West. This situation cannot continue. We need the Scottish Government to bring together universities, staff, students and trade unions to agree a way forward.
I want to talk briefly about immigration. During my time at Heriot-Watt, I worked alongside fantastic academics from around the world. Next door to my office, on one side I had Professor Adebayo Adeloye from Nigeria, and on the other I had Benny Suryanto, who came from Indonesia. Our students are lucky that these people choose to come to the UK. I felt lucky that students came from around the world to spend time in Edinburgh and enjoy its education and the opportunities that provides.
I am concerned that the Government are making it harder for both staff and students to come here. If we are serious about growing our economy, we have to recognise the benefits that universities provide, both nationally and locally in our towns and cities. It would be great to hear what is happening inside the Government to support universities and ensure that they can thrive. In Scotland, their funding is largely a matter for the Scottish Government, but I think the UK Government could do more to support the immigration status of students and staff.
Hannah Spencer (Gorton and Denton) (Green)
I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for securing this debate. Britain has a proud tradition of higher education. Our historic universities, our culture of learning and discovery and the world-class research carried out in this country have earned us a reputation that is recognised around the world. It is an asset that we must celebrate and that we must protect, because that tradition belongs to all of us.
Higher education is so much broader than a three-year degree. Higher technical qualifications, foundation degrees, degree apprenticeships and lifelong learning all have a vital role to play alongside academic study. I left school at 16 and built a career as a plumber and gas engineer through vocational training at Bolton college and, later, apprenticeships, including the Prince’s Trust’s brilliant enterprise programme. I raise this because too often the voices of working people, tradespeople and people who maybe did not get on with school or who just prefer steel-toe cap boots to suits are missing from the debates and decisions that shape higher education.
In the areas I represent, there is no shortage of ambition or of people willing to graft to make something of themselves, but far too many people struggle, through no fault of their own, to see a clear route into secure, well-paid work and a decent life. A strong and accessible higher education system should be part of that route. That system is clearly now at breaking point. Across the country, higher education institutions are facing a deepening financial crisis, driven by years of under-investment and a funding model that is no longer fit for purpose. Universities, specialist colleges and other higher education providers are grappling with a multibillion-pound funding gap, as tuition fee income and public funding have failed to keep pace with their rising costs.
Yesterday, more than 400 students graduated from UCEN Manchester. Many of them were the first in their family to enter higher education, while others were mature learners who had returned to education. Yet providers such as UCEN that specialise in widening participation are increasingly being asked to do more with less, with their funding being steadily eroded.
The consequences of that underfunding are already painfully clear: courses closing, experienced staff being forced out and departments having to make severe cuts just to make ends meet. At the same time, working conditions have worsened for all staff members, with growing workloads, stagnant pay and increasing job insecurity. In vocational education, things have got so bad that institutions cannot persuade people to leave industries like plastering to take up teaching the next generation, because the wages are far below what they are already earning. Students are facing exorbitant fees and the prospect of being burdened by decades of debt.
If we are serious about equal opportunity, we must recognise that higher education is a long-term investment in our people, in our communities and in our country. The inventions and discoveries made by higher education researchers, like the covid-19 vaccines or the development of famine-resistant crops, have the potential to benefit all of us. The Government face a choice in today’s Budget; they can continue papering over the cracks or they can finally make a long-term investment in Britain’s future.
The Green party’s position is clear. Higher education should be free, and students should be provided with adequate maintenance support funded through public investment, not private debt. A 1% tax on wealth above £10 million would raise around £15 billion a year—money that would more than cover the cost of scrapping tuition fees and would give our higher education institutions a vital injection of cash.
Higher education policy must focus on spreading opportunity and investment more fairly across the country in areas like Gorton, Denton, Abbey Hey, Burnage, Longsight and Levenshulme. People from those places have never, ever lacked talent or drive. We must stop wasting it, by properly funding higher education and finally recognising learning for the national asset it is.
Darren Paffey (Southampton Itchen) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this important debate.
Southampton is home to two excellent universities and yet in my constituency, only 7% of kids on free school meals will hold a degree by the time they are 22. Of those who do not receive free school meals in Itchen, just 19% will get there. If we go a few miles up the road to Winchester, however, that become 39%. We must make sure that higher education is not shut down as an option for young people. In my speech, I will focus on three points that are becoming worryingly clear about the funding system as it stands: it is not working for students, it is not working for universities, and—I fear—it is working only for the Treasury. I do not believe that is what this Labour Government are about.
First, on students, I was the first in my family lucky enough to go to university. I started in 2000 when fees were—wait for it—£1,025. My annual loan was about £3,500. We looked enviously on the generation before us, who did not pay fees and who received a grant to go to university. This generation is looking enviously on my generation, which is worrying. I went on to spend 20 years as university lecturer, so I saw every subsequent wave of student finance agreements. The Treasury Committee has concluded that we were essentially mis-selling some of the previous loan agreements on terms that no commercial lender would ever be allowed to offer.
Darren Paffey
My hon. Friend makes an absolutely salient point. Many of us never imagined that we would get to an even worse place, but here we are.
Only the top three earnings deciles of recent intakes will ever pay off their student loans in full. The nurse, the teacher or the engineer on £35,000 will pay 9% for decades and still never clear the balance. Dare I say it, but if it walks like a tax and quacks like a tax, let us call it a tax and treat it as one. If we properly sort it, it could well be a better deal than the current loan system.
John Slinger (Rugby) (Lab)
My hon. Friend is making a very compelling speech. I wonder if he noticed the coverage in The Telegraph, which reported that graduates on the minimum wage will be making repayments on three out of the five student loan plans from next year onwards. Does he agree that this, in many ways, breaks our social contract with the student population, who were essentially told that they would earn a huge amount more and should therefore contribute to their higher education?
Darren Paffey
I agree that this is not the deal that I think our country wants to offer its young people, particularly if the Government are about breaking down barriers to opportunity.
Secondly, on universities, the Office for Students reported in May that more than a third of English higher education institutes were already in deficit last year, and that if recruitment simply flatlines, nearly six in 10 could be in deficit within five years. International student numbers, as hon. Members have stated, fell by around 45,000 last year, and student visa applications in the first months of this year were down by a third.
In May, the Education Committee, which I sit on, warned of the real threat of insolvency. Universities such as those in my constituency—the University of Southampton and Southampton Solent University—are anchors of our local economy, and that is reflected around the country. We cannot afford to let them fail. They are not immune to the job losses that are affecting other HEIs.
Thirdly, I turn to the taxpayer. The Government estimate that the state meets 35% to 40% of the cost of higher education. Others take a different view: the Institute for Fiscal Studies put the figure for the 2022 cohort at around 3%, with 97% of the cost met by students. Sir Philip Augar recommended a 50:50 split. Whichever number we look at or choose to believe, we are a long way from the balance that Parliament intended, and the bill is quietly being passed to young people.
That brings me to the international student levy. Don’t get me wrong, I absolutely welcome the return of maintenance grants—for families on low incomes, they really matter—but a grant of up to £1,000 a year amounts to about £20 a week, and it is to be funded by a levy of £920 per international student from 2028. Last November, that was forecast to raise £445 million in its first year, but that forecast was made before visa applications fell by a third. I fear that a grant that depends on a shrinking tax base is a good intention built on sand. Before the levy legislation completes its passage, will the Minister commit to publishing an updated forecast of what it will raise based on today’s recruitment figures? Will she confirm that maintenance grants will be protected if they fall short?
Finally, the Government have said that the whole student finance system is under review, and I welcome that news enthusiastically. Will the Minister set out how and by when that review will report, and whether it will move us back towards a fair balance between the state and the individual? As hon. Members have very eloquently said, this is all about intergenerational justice. It is about whether 22-year-old me would look at university and say, “Yeah, I can risk that,” or whether I would now be more likely to say, “Nah, my family has never done that and I simply cannot afford it.” It is about growth and the 7% of kids in Itchen, and more across this country, who deserve better opportunities and better odds.
Perran Moon (Camborne and Redruth) (Ind)
It is an honour to serve under your chairship, Ms Vaz. I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for securing this debate.
As remarkable as it is to imagine, I also began university under Margaret Thatcher.
Perran Moon
Thanks, Jim.
The higher education funding settlement is currently failing both universities and young people in Cornwall. Institutions such as Falmouth University, based largely in my Camborne, Redruth and Hayle constituency, are central to our local economy and our skills base, yet they are increasingly being asked to educate students at a loss. Delivering a full-time degree costs more than £12,000 a year, so even when the maximum tuition fee rises past £10,000 next year, it will still fall well short.
No sector can remain sustainable if growth depends on losses, and the funding gap is particularly acute for regional and specialist institutions. Universities, therefore, are forced to compete for short-term grants and rely on international student income to balance the books. But when that income falls, courses and jobs are at risk. We have seen that play out over the summer at the University of Exeter’s Tremough campus, also in my constituency, with voluntary redundancies and the closure of its geography course.
The system is not working for students either, especially those from lower-income backgrounds. In my constituency, less than 23% of 18-year-olds went to university in 2025, compared with 51% in London. That is not because young people in Cornwall lack talent or ambition; it is because in one of the poorest regions of northern Europe, the costs of pursuing a degree with the associated debt are too great to even consider. The barriers to higher education are simply too high. Even students who remain in Cornwall but rightly want to live on campus find that the rent for a single room consumes almost their entire maintenance loan before they have spent a penny on food, travel or other essentials.
The loan system does not make things any better. Those from wealthier families may avoid taking out a loan altogether, while low-income students have no such option. A low-income student on a three-year course could be left with a £67,000 debt the moment they graduate. The interest on the debt often accumulates faster than repayments, leaving poorer graduates paying a higher effective rate for their entire careers.
Higher education should expand opportunity and drive growth in places such as Cornwall. Instead, we have a system that asks universities to do more with less while operating a student loan system that, for all intents and purposes, functions as a regressive graduate tax. We cannot build a fairer, more productive country on that foundation. I ask the Minister: what steps are the Government taking to make higher education funding fairer for students and more sustainable for universities?
Pam Cox (Colchester) (Lab)
I thank my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) for securing this debate. I declare an interest as a member of the University and College Union and the all-party parliamentary university group.
Everybody in this debate wants to see young people and lifelong learners succeed in their chosen path in life. Most would agree that the Government have done a great deal to invest in education and skills since 2024, and I want to pay tribute to that. We have seen that uplift in schools, special educational needs and disabilities provision, youth hubs, colleges and apprenticeships.
This debate, however, is focused on the situation in higher education. My discussions with those who work in and represent that sector give me cause for concern, as I know is the case for other hon. Members present. Other south Essex MPs and I have spoken in this Chamber and elsewhere about the very significant challenges that my former colleagues at the University of Essex have faced over the past year. The university closed its Southend campus and made large numbers of staff redundant there and at its main Colchester campus.
The University of Essex is not alone, as we have heard, in facing these painful challenges: many universities are closing departments and issuing redundancies. At least two other universities are considering campus withdrawals or closures. The University of Buckingham has withdrawn from its Crewe campus, to be replaced as the main operator by Apollo Education. The University of Brighton is closing its Eastbourne campus and is considering closing its Falmer campus.
Other institutions are merging: the University of Kent with the University of Greenwich; City, University of London with St George’s; and King’s College London with Cranfield University. These new arrangements are the start of a new era in higher education. They raise the very thorny issue of how universities that were brought into being by the Privy Council via royal charters merge with those that were brought into being as companies limited by a guarantee. I suspect that this is a policy rug nobody really wants to lift. Other universities are being bought out or privatised. Lincoln Bishop University, for example, is now operated by Global University Systems, a global body with millions of students around the world.
This new era of campus closures, redundancies, mergers and buy-outs comes at a time when many in the sector face huge financial challenges. The Education Committee has already been referenced. It recently reported:
“The higher education sector in England is facing a financial crisis that now poses a real risk of institutional insolvency.”
This situation requires our close attention. We need our universities to thrive in our rich research and teaching ecosystem—they are part of an ecosystem. Our industrial strategy depends on that, as does our ability to create sovereign innovations in every sector.
Universities are very ready to adapt, and have adapted over the years, but they need us in this place to have more open conversations about how they can best do that. I ask the Minister to continue to champion our universities, but to support them by enabling more open conversations like this one about the scale of the challenges that they face.
Neil Duncan-Jordan (Poole) (Lab)
It is a pleasure to serve with you in the Chair, Ms Vaz. I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this timely debate. My constituency does not have a university, but many of my constituents study and work at the two nearby universities in Bournemouth. However, my interest in this subject comes from the fact that when I was a regional official for Unison, I was head of the HE section in the south-east. That experience taught me a lot about the way in which the sector is financed.
Today, a growing number of institutions are forecasting deficits, and many have introduced or will soon be introducing the cost-cutting measures that hon. Members have mentioned, including redundancies among academic and support staff. For years, there has been a financial over-reliance on international students. We saw that decline greatly during covid, when I was working as a trade union official, and it has not yet been able to come back. Coupled with changes to visa restrictions, international students are being put off from coming to the UK.
There are also rising operational costs—energy costs, pensions and national insurance rises; those have all had an impact on large campuses—and a tuition fee funding model that has failed to keep pace with those rising costs, but the real reason for the state of HE funding is the marketisation of the sector. Pitching one university against another to compete for students has driven an arms race to build the shiniest buildings they can, often at the expense of the teaching and student experience. At any time, many of our campuses look more like a building site than a university.
The financial risks, however, are not evenly spread across the sector. Institutions with smaller reserves, limited international recruitment and weaker balance sheets are particularly exposed. The most invidious result of these financial pressures is the move to make staff pay for the failure of the system. At a number of universities, including those with whom I used to negotiate, we are seeing the creation of subsidiary companies to transfer staff out of direct university employment. That removes them from either the local government pension scheme or the teachers’ pension scheme. Staff who refuse to transfer often face the threat of redundancy. Despite the Government’s best efforts, this looks remarkably to me like fire and rehire.
The Government cannot secure the future of the HE sector simply through further fee increases for students. I believe we need an immediate cap on student numbers for each institution, rather than allowing the larger institutions to hoover up all the available students in an area. We need financial support for those universities facing immediate financial pressure, and we need to put a halt to the redundancies and wholesale course closures that are taking place across many of those institutions.
The Prime Minister has made it clear that his growth agenda is based on a triple helix model of business, Government and universities working together. For that to succeed, we need a healthy HE sector, and to achieve that, we need greater Government intervention and support.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Vaz, and I thank my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) for securing this debate.
Access to higher education can be life changing for young people. However, this opportunity is already harder to grasp for young people in Cornwall. Students face the high costs of travelling from remote, disconnected areas or, if they stay local, the high costs of private renting in a tourism-heavy region. Students across the south-west face the second highest monthly living costs in the UK, at £1,212 per month, which is only £114 less than London. These financial barriers directly impact whether young people pursue higher education. While the 2025 UK-wide entry rate for 18-year-olds was 36.3%, the rate in the south-west was joint lowest at 30%, and in Truro and Falmouth it was 27.2%, which is the lowest rate on record since 2016.
Having universities close by with a variety of courses and offerings is key for young people in Cornwall to be able to access the higher education opportunities. HE is an investment in place, and nowhere more so than in Cornwall. It leads to economic growth, productivity and innovation, including higher wages, skills and regional development.
There are ongoing funding concerns in relation to higher education institutions in Cornwall, and it is integral that support for these vital institutions is considered. Losing higher education opportunities there, especially with the campus that is across the border in the constituency of the hon. Member for Camborne and Redruth (Perran Moon), means that Cornish students risk losing out on these opportunities.
Falmouth University, which began in my constituency, offers traditional creative arts alongside technical and entrepreneurial courses and produces nearly 7,000 highly-skilled graduates each year. Tuition fee income does not meet the costs of delivering these degrees, particularly in creative and technical universities like Falmouth. That leaves universities with a difficult choice: sacrifice their core academic delivery for research investment or engage with more corporates. Government funding is cost-intensive to obtain and competitive, and frequent changes to Government funding models make it very hard to plan effectively. Specialist institutions like Falmouth are unevenly affected by those higher costs to secure fewer grants.
Funding for these integral institutions cannot fall by the wayside. They offer local employment opportunities, produce wider economic benefits and give young people in Cornwall a tangible place to pin their aspirations. I welcome the Government’s reintroduction of funding for higher education through targeted, means-tested maintenance grants, which will support low-income students from deprived areas to access and excel in higher education. We need to ensure that funding for a diverse range of courses that allow young people to gain skills and access to new experiences is accessible, realistic and enables the higher education sector to continue to foster ambition in Truro and Falmouth, Cornwall, the south-west and across the UK.
Dr Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
It is a pleasure to serve with you in the Chair, Ms Vaz. I thank my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) for securing this important debate.
Sheffield is my university. I attended the 45th reunion last weekend and, apart from the fact that many of my former student colleagues had decided to dye their hair grey, everybody was looking remarkably well. I would also like to say that I actually went to university before Mrs Thatcher was the Prime Minister.
I am a former NHS surgeon and a father of three children who have all been through our university system. Our universities are among our greatest assets, as we have heard during the many thoughtful contributions this morning. They drive research and support our local economies, but we cannot take them for granted. They are facing considerable financial pressure. Rising operating costs and an increasing reliance on international student income have left many of them in a precarious position.
We all know that the importance of universities goes far beyond the lecture theatres. Just this Monday, I spoke in the House about genetic research at the University of East Anglia to help us distinguish between dangerous and less dangerous prostate cancers—a subject that we absolutely need to sort out. That sort of groundbreaking research depends on well-funded universities with the confidence to invest in the long term, particularly in subjects such as my own, medicine, but also in the sciences and many others, where the costs of providing higher education and training are considerable.
The Government’s decision to increase tuition fee caps in line with inflation rather than allowing their value to erode makes sense. I also welcome the return of maintenance grants. Those are important steps towards supporting universities and students, but we must recognise that there is a difficult balance at the heart of this debate. Universities need more money, yet increasing tuition fees means that we are asking students to take more debt. I can see that generational difference in my own family. My two eldest children studied under plan 1, my youngest is on plan 2 and the students I met at Thurston community college in my constituency face the prospect of something called plan 5, with repayments potentially stretching over 40 years.
I graduated from medical school without tuition fee debt. I began my career, I entered the housing market and I gradually became more secure, but that looks very different for today’s graduates. A maths graduate who recently attended one of my constituency surgeries brought home just how complicated our student finance system has become. He brought a very well worked-out spreadsheet that explained it to me—at least at the time; I could not possibly explain it to Members today. We must avoid a situation in which the financial sustainability of our great universities is secured simply by transferring the ever-greater burden on to the next generation, for generational unfairness is the great challenge of this Parliament.
I ask the Minister to consider just two things. First, how can we provide universities with greater long-term funding certainty rather than leaving them so dependent on tuition fees and unpredictable international student recruitment? Secondly, how can we ensure that efforts to stabilise university finances are accompanied by a fair and transparent student finance system so that young people really understand the financial commitments they make? Our universities need financial stability, but our students need financial security. That is a hard thing, but our Government know how to do hard things.
Lewis Atkinson (Sunderland Central) (Lab)
I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this debate and I congratulate Members from across the Chamber on their contributions.
It should not be said that issues facing our universities are the preserve of MPs from big cities or the leafy suburbs. As Sunderland Central’s MP, I want to highlight the importance of the University of Sunderland to my city. This is as much a red wall issue as it is anywhere else in the country.
I want to mention the university’s educational and economic impact, and what the higher education funding environment means for our city. The university comes from the proudest of polytechnic traditions. It is rooted in the city, with a mission to be open to anyone who can benefit from higher education. It is shaped by what local employers and professions need. Nowhere is that clearer than in health. Sunderland trains the nurses, pharmacists, paramedics and doctors whom our NHS rely on. Its medical school was explicitly set up to bring more working class and local students into medicine. It is now moving into dental education, in a region where too many people struggle to see NHS dentists. When it was named university of the year for social inclusion, more than six in 10 of its students were the first in their family to go to university. If I may, I will associate myself with the remarks of my hon. Friend the Member for Southampton Itchen (Darren Paffey) on the intergenerational and social mobility missions of our universities. That is crucial in Sunderland, as it is elsewhere.
This is what widening participation looks like in practice: young people from Pallion, Hendon or Southwick in my constituency having the chance to get a degree and, by living at home, de-risking some of the financial issues facing students that we have talked about. The university, as we have heard, also brings people to the north-east from across the country and, as successive Governments’ international strategies have encouraged, from around the world.
On its economic impact, independent analysis found that the University of Sunderland adds around £250 million a year to our city’s economy and supports more than 4,000 jobs in the city. It is one of our biggest employers. The university, however, is under real financial pressure, which has serious consequences for the city as a whole. Home tuition income has fallen behind costs, and the visa landscape for international students has changed rapidly and unpredictably. As a result, the university has had to set out plans to save £40 million over the next two years, and staff are understandably worried about their jobs.
That pressure did not come from nowhere. For years, the previous Government froze tuition fees while costs kept rising, with no long-term plan. As others have said, the Government now expect to fund just 16p in every pound of home student funding. Universities that do the most to open doors, like Sunderland, are left the most exposed. I know the Government are working with significant fiscal constraints. I know they have taken steps to set stable expectations for future fee income so that proper financial planning can happen. I, of course, welcome the return of targeted maintenance grants. But in previous responses the Government have been keen to highlight that universities have always been autonomous institutions. I understand that. In my experience, they take the responsibility to be financially sustainable seriously, even when that means making deeply painful and locally unpopular decisions such as the withdrawal of funding from our National Glass Centre in Sunderland. But we cannot treat them as autonomous institutions and assume that they will always be there as anchors in communities like Sunderland and across the country. I hope we will hear more about the Government’s long-term strategy.
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
It is a pleasure to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Sheffield Central (Abtisam Mohamed) on securing this debate. Sheffield is an excellent place to ground this debate because it has two great examples of the origin stories of many of our universities. The University of Sheffield is a civic university in the truest sense. When it sought its charter in 1904, steelworkers, factory workers and other local people raised over £50,000 in penny donations to support it. Sheffield Hallam traces its roots to the School of Design, which was founded in 1843 to train designers for the city’s industry, and became a university in 1992. One red brick, one post ’92: both serve the city and both embody the idea of universities as anchors of their community. That idea is now at risk.
Later today the Chancellor delivers his first Budget; every signal is that universities should expect very little from it. We cannot continue to ignore the stark choice before us when it comes to university policy. Either we carry on with a managed decline—courses cut, talent lost, places left behind—or we can choose transformation with universities as engines of learning throughout life, as innovation hubs driving economic growth and as civic institutions embedded in the places they serve. The Liberal Democrats would choose transformation, and I hope the Government will do the same.
At the moment, too many universities are fighting for survival. More than a third of English providers were in deficit last year. The Department’s own costing study found that universities lose about £3,000 on every home undergraduate they teach. Research is worse: universities now recover only two thirds of research costs. According to the Russell Group, universities put in £6.3 billion of their own money into research last year.
For many years now, the funding gap has been filled by international students, but that income is now also falling away. Visa applications in August—the peak month—were down by 17% on a year ago. Of course, education as a great British export is about much more than money, but the business model that has saved the Government from spending more on home students and research is being undermined. The Government have said that they intend, in the Finance Bill that will follow today’s Budget, to legislate for a £925 levy on every international student. Only a tiny sliver of that money will go to the maintenance grants put forward as a justification for it.
This crisis does not simply affect an ivory tower elite who sit apart from our communities: in many towns and cities, the university is one of the largest employers and the source of the next generation of teachers, nurses, engineers and members of many other professions. Such universities produce graduates who are likely to stay and work locally and serve the students who are often least able to move away to study. When a nursing course or engineering department closes in such a place, it does not relocate; it disappears from the region. With it goes a route into a profession for everyone who cannot simply up sticks and leave.
Post-’92 universities carry a burden that their older neighbours do not. For no other reason than institutional history, they are tied into the teachers’ pension scheme, for which employer contributions reached 28.7% last year—roughly double what many older universities pay, and about £8,000 extra a year for a typical member of staff. In July the Government ruled out any help, but part of solving this crisis in the sector must include working towards a single, fairer pensions framework.
There is also the question of what happens when one of these institutions does not survive. The Office for Students told the Education Committee that 24 institutions could exit the market within a year. The Committee recommended a special administration regime so that a failing university could keep teaching while its future was resolved, but the Government have said that they are “not currently persuaded” because legislating would be too complex. I would say that that is an argument for starting now, not for doing nothing.
Further education colleges have had a special regime since 2019, and having no regime has its own risks. With no orderly way to fail, many simply assume that the Government will step in. Sir Philip Augar has said that a handful of universities are already getting secret bail-outs. When I asked Ministers about that, I was told that emergency support is not provided, but also that officials meet universities and their banks regularly in confidence. Discussing potential rescues behind closed doors gives us all the moral hazard and none of the transparency.
Liberal Democrats see universities as essential national infrastructure, not cost centres to be squeezed. That means a new settlement: in the short term, reform the levy before it reaches the statute book; reprofile student loan fee payments to ease the cash flow; offer low-interest loans for restructuring; and remove the VAT penalty that stops universities from sharing back-office services, so that they merge finance and HR rather than cut teaching. We need to fund the breadth of subjects in every region and make sure that public research grants actually cover the 80% of costs that they are supposed to. But this needs to come alongside obligations on universities. The money alone will not fix the problem.
After 2030, the number of 18-year-olds will fall by 17%, yet 82% of the growth in priority occupations in the industrial strategy sectors will require a higher education qualification. Put those two facts together, and a model built around school leavers simply will not work in the long term. Many of those who will fill the jobs in that growth are already in work and will need to retrain as technology reshapes what they do. Universities need to open up to adults through modular lifelong learning, which we suggest needs to be through lifelong skills grants, not simply loans. Universities also need to work hand in hand with further education colleges, with credits that transfer between them, and they need to turn British research into businesses that stay in Britain.
Dr Arthur
The hon. Member is diagnosing the problem excellently and detailing all the issues. I do not want to go back too far, but we have to think about the role the Lib Dems played in the coalition Government and the decision to go back on their pledge not to raise fees but instead raise them to £9,000. The Budget this afternoon is not just about spending money; it is also about raising money to pay for policies. A range of policies—
Valerie Vaz (in the Chair)
Order. May I remind the hon. Gentleman that the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) only has a minute left?
Ian Sollom
A lot of the interventions that I have suggested on the university side are cost-neutral and would involve restructuring.
I have three questions for the Minister. First, will the Government update their impact analysis to reflect this year’s fall in international recruitment and publish the effect by region and type of institution of the international student levy before the Finance Bill is debated? Secondly, will they think again about special administration before rather than after a university fails? Thirdly, will the Government commit to working with the sector to end the pensions penalty on post-’92 universities? Universities did not get to this position overnight and they will not recover overnight, but today’s Budget is a chance to stop the managed decline and start the transformation. I hope the Chancellor takes it.
Rebecca Smith (South West Devon) (Con)
It is a pleasure to serve under your chairmanship, Ms Vaz, and to respond on behalf of His Majesty’s official Opposition.
I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for tabling this important debate and all Members for their contributions this morning. I have to say that I did not expect to hear quite so much agreement for Margaret Thatcher’s education policies this morning. I am particularly grateful to the hon. Members for Edinburgh South West (Dr Arthur) and for Camborne and Redruth (Perran Moon) for their positivity about that.
Let me pick up on the points made by the hon. Member for Southampton Itchen (Darren Paffey). Although I think we are the same age, he started at Southampton University a year after me, but we have many mutual friends from our time at university. It is worth noting that the changes we experienced as the first cohort that had to pay fees and take on a loan were due entirely to the Teaching and Higher Education Act 1998, which was snuck through by the new Labour Government and then conveniently forgotten about, in a time where social media did not exist. I dread to think of the furore if today’s students realised that that was going to happen to them, but I for one, aged 16, thought I was going to university for free, but by the age of 18 that was not the case.
Rebecca Smith
I am going to make some progress.
I do not want to burst the bubble of the hon. Member for Sunderland Central (Lewis Atkinson), but Plymouth has also had dentistry offered as a subject. Unfortunately, only about 5% of the students are from Plymouth and nearly all of them leave the area, so although we absolutely need more dentistry students, so far that has not quite been the mechanism to solve the crisis that we hope it will be—although that is a debate for another time.
To respond to the topic of the debate, let me put it on record that the Opposition recognise the enormous value and significance of the UK’s university sector in terms of its economic and societal contribution. The National Centre for Universities and Businesses argues that the UK’s universities are
“one of our greatest strategic assets. They educate the future workforce, conduct world leading research, and act as anchor institutions in their regions—supporting businesses, driving innovation, and powering local growth.”
Economically, universities contribute around £265 billion to the UK economy and support more than 800,000 jobs. The return on investment is also staggering. For every £1 of public money invested in the higher education sector across the country, £14 is put back into the economy.
In addition, there is no doubt that universities are some of the most critical engines of growth and prosperity at the regional level. As the proud Member of Parliament for South West Devon, I know the huge role that the sector plays across the south-west. We have 10 universities with more than 200,000 students between them, employing more than 31,000 people and contributing £7.8 billion of gross output. Plymouth Marjon University, Arts University Plymouth and the University of Plymouth are certainly playing their part. I am meeting the vice-chancellor of Plymouth University tomorrow to discuss this very topic. Although I unfortunately cannot add any more today, I know that he wants to talk to me about the struggles that the university is facing.
Notwithstanding this vital economic contribution, it would be wrong to look at universities purely in terms of their economic output. Universities help to shape the society we all live in. They equip young people with the skills needed to navigate an increasingly fractured society. They teach young people to think critically and outside the box, skills that I believe will be essential in a Britain where communities are more divided than ever and the spectre of the AI revolution looms over us all. It is beyond clear that universities will play a central role in Britain for decades to come. That is our view, but we are not blind to the big challenges facing the sector.
It is no secret that real and imminent challenges face the UK’s university sector. A May 2026 report from the Education Committee went so far as to claim that the sector faces a financial crisis that poses a real risk of institutional insolvency. The report laid bare the terrible state of some universities’ finances, with the Office for Students fearing that 24 providers could face insolvency within the next 12 months. Against this uncertain backdrop, universities are being forced to close courses and sell buildings to cut costs and make efficiencies.
The difficulties facing universities are explained well in the Policy Exchange report, “Tarnished Towers”. It argues that high inflation, pension pressures and a reduction in international student numbers have created a perfect storm for our universities. It all seems to be compounded by a lack of action from the Government thus far. A Universities UK report from February 2026 found that Government policy decisions will
“lead to an estimated £3.7 billion reduction in funding to higher education providers in England from 2024-25 to 2029-30.”
Its analysis shows the impact of Government immigration policy, but also the damaging shock that the sector received through increased pension and employment costs.
In 2020, Keir Starmer made scrapping university tuition fees the centrepiece of his leadership campaign. Indeed, in June 2023, the previous Education Secretary even had the audacity to claim that graduates would pay less under a Labour Government. Students right across the country felt betrayed and let down by the Government’s broken promises when the previous Education Secretary announced in November 2024 that Labour would push up tuition fees for students. In that debate, the shadow Education Secretary, my right hon. Friend the Member for Sevenoaks (Laura Trott), said that she would be willing to work with the Government to support universities and students. His Majesty’s Opposition are yet to be invited to work constructively with the Government on that—indeed, we have heard very little at all from the Government about what they want to do. I hope the Minister can shed some light on the Government’s plans to support our university sector.
The new Education Secretary has been keen to talk about her plans to reform technical education, but aside from providing a statement on that issue in the House, we have heard little else. She has not come to the House to clarify when the Government will bring forward the legislation they promised at the King’s Speech to support children with SEND and their families, or to talk about the challenges facing the university sector.
I am grateful to the hon. Member for Sheffield Central for securing this debate, as it gives His Majesty’s Opposition some time to ask the Minister, whom I respect very much, some important questions about higher education funding. First, can the Minister shed any light on how the Government intend to support the 24 institutions that the Office for Students claimed are at risk of insolvency in the 12 months from May 2026? Secondly, can she confirm whether the Government intend to make any changes to plan 2 student loans? Thirdly, can the Minister tell the Chamber whether she has had any meetings with institutions that might be facing significant financial uncertainty during the remainder of this academic year? Lastly, will the Government rule out pushing up student tuition fees again before the end of this Parliament? His Majesty’s Opposition, the higher education sector and, most importantly, students right across the country need answers to those important questions. Universities need them to begin to develop long-term financial plans, and students need to have certainty about their finances and about the stability of the institution they are studying at and the course they are taking.
Regrettably, I hold little hope that the Government have answers to those questions, given the lack of focus that the new Education Secretary seems to have shown to higher education since coming into office. That is in stark contrast to the official Opposition: we have outlined detailed and fully costed plans to lower interest on plan 2 student loans and set out reforms to the university sector to ensure that the Government stop funding dead-end university courses. That is all part of our new deal for young people.
I reiterate His Majesty’s Opposition’s firm belief in the strength and value of the UK’s higher education sector; it is indeed a huge strategic asset. However, we must be honest and recognise that it will face huge challenges over the next decade. The digital revolution means that universities need to rethink how they prepare students for the world of work, and they must be open to accepting that they must adapt to stay solvent in the new economic reality.
The Government should be there to guide the sector through these turbulent headwinds, but we have seen little indication that they are. The new Education Secretary urgently needs to shed some light on what steps they will take to address some deeply concerning reports about the financial health of our institutions. The Budget is a little over an hour away; I hope that the Chancellor will set out steps to solve these problems, but I hold out little hope.
The Minister for School Standards (Georgia Gould)
It is an honour to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this really important debate. She is a passionate advocate for these issues: she has chaired the APPG on students and has regularly raised issues related to universities and students, and from her speech we heard how thoughtful and knowledgeable she is on these issues.
I also thank my hon. Friend the Member for Colchester (Pam Cox) for her characteristically thoughtful speech. She called for a wider debate, discussion and focus on these issues, and we have had a very important debate today. We have heard the range of expertise in the Chamber, from lecturers to others who have real experience of working in universities, and about the range of decades when everyone went to university—I cannot believe that anyone here looks old enough to have gone to university under Margaret Thatcher.
We should rightly be proud of our world-class higher education sector, which remains, by any objective metric, one of our nation’s greatest exports and a global beacon of intellectual excellence. We heard from my hon. Friend the Member for Ealing Central and Acton (Dr Huq) that the UK’s university sector includes four of the world’s top 10 universities, of which we can be very proud. It contributes more than £265 billion to the UK and supports more than 750,000 jobs. In my work as Schools Minister, I get to see directly the contribution that universities make to places and how integrated they are in local innovation, support and access.
I have spent quite a bit of time in Sheffield and have seen the contribution that the University of Sheffield and Sheffield Hallam University make to the local area, whether through their pioneering work on opening up participation to university or some of their wider research: Sheffield Innovation Spine, the work that Sheffield Hallam University is doing on early years and Sheffield Children’s University, and the work that the University of Sheffield is doing on adult social care.
As my hon. Friend the Member for Sunderland Central (Lewis Atkinson) was talking, I was reflecting on being in Sunderland two weeks ago, where we are working on Mission North East, and the role that Sunderland University is playing in partnership to support better outcomes for children in the area.
The Government are committed to maintaining a world-class higher education sector that delivers for students, our society and the economy. We of course recognise that the sector’s financial environment is challenging. The sector is rightly independent from Government, with providers managing their finances and ensuring that their business models provide long-term sustainability. However, I recognise the long-term challenges that many Members have raised and the strain that we saw over the last decade, including the legacy of seven years of frozen tuition fees. Universities have had to deal with the issues caused by that.
Dr Huq
I know the Minister is really passionate about this subject, and her Department has done excellent work with the Department for Work and Pensions on the phenomenon of those not in education, employment or training. A statistic shared by my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) was that the UK has the lowest proportion of public tertiary education expenditure among OECD countries. Could the Minister have a word with Treasury colleagues about nudging that upwards, because that is a statistic we are not so proud of?
Georgia Gould
Of course, I always support greater funding for education and young people, but I was just about to talk about some of the changes the Government are making to support sustainability.
After they were frozen for eight years, we increased tuition fee caps in line with inflation for 2025-26. We will increase them once again in line with forecast inflation in 2026-27 and in 2027-28. We will then legislate when parliamentary time allows to increase tuition fee caps automatically for future academic years. Over the coming year, that is £6 billion-worth of safeguarded indexed increase in income underpinned by the Government, which will make a real difference.
My hon. Friend the Member for Sheffield Central asked about the Government’s vision for universities. We have set out an ambitious programme of reform through the post-16 education and skills White Paper, with a clear vision for a more sustainable and collaborative higher education sector. We want providers to be clear about their distinctive roles but to be working in collaboration.
My hon. Friend also mentioned the importance of research. My hon. Friend the Member for Bury St Edmunds and Stowmarket (Dr Prinsley) talked about the pioneering research on prostate cancer at East Anglia. Research is a critical role that universities play. The Government are investing a record £86 billion in R&D from 2026-27 to 2029-30; as part of that, UK Research and Innovation will deliver an expected £38.6 billion of research investment, rising to nearly £10 billion per year by the end of that period. In the Department for Education, we are working closely with the Department for Science, Innovation and Technology to deliver the White Paper’s commitments, which include research funding reform and improvements to research grant cost recovery.
We heard from almost all the Members who spoke in the debate about the importance of opening up access and ensuring that young people who want to go to university can always pursue that route. That is why we do not support the Conservatives’ proposals, which would pull up the drawbridge because they are about reducing the number of young people going to university. We know that young people from disadvantaged backgrounds will be the ones who do not get that opportunity.
Jayne Kirkham
It is important to note that in the 1980s, only about 10% of people went to university. The Blair Government opened that up to 50% of the population, and that is worth putting on the record.
Georgia Gould
We want two thirds of young people to participate in higher-level learning, whether that is going to university, pursuing an apprenticeship or a technical route. We see all of those as deeply connected.
Jim Shannon
I thank the Minister for her helpful response. She has outlined a very clear strategy to try to address the issues that we have all raised. I ask her a specific question: would she consider sharing the strategy with the relevant Minister back home?
Georgia Gould
I regularly talk to colleagues across the four nations, and my right hon. Friend the Minister for Universities, Baroness Smith, does the same. It is very important that we have that spirit of learning.
Those different routes are deeply connected. We think that the relationship between higher education and the Department is important, particularly on supporting outcomes for young people and as we think about how we respond to the changing nature of education, the introduction of the lifelong learning entitlement and long-term flexible learning. We want people to have access to education throughout their lives.
Georgia Gould
No, I must make progress. The lifelong learning entitlement will transform the student finance system, giving people flexible access to high-quality education throughout their working lives. From January 2027, for the first time learners will be able to use their entitlement to fund individual modules as well as full courses at levels 4 to 6 at colleges, universities and independent providers.
A number of Members, including my hon. Friends the Members for Sheffield Central and for Edinburgh South West (Dr Arthur), raised the issue of international students and support for them. I want to be clear: international students are welcome in the UK. They enrich our campuses and communities, and are ambassadors for this country long after they graduate. They made a vital contribution of £12.7 billion in fee income in 2023-24—almost a quarter of the sector’s income, as other Members said. The new international education strategy confirms our commitment to welcoming students who meet the requirements to study here.
A range of questions were asked about the international student levy. That is part of a wider package that also includes inflation-linked fee rises, and it is important to stress that every penny it raises will be reinvested in higher education and skills—including new maintenance grants for disadvantaged students, which many hon. Members raised, to remove some of the barriers around the cost of studying. We know how important those are. The levy is simple and proportionate: a flat £925 fee per international student per year from 2028-29, paid for by providers with an allowance of 220 students each. We listened to the sector; the flat fee is equivalent to around 4% of international fee income, down from the 6% first provided. To answer the questions asked by my hon. Friend the Member for Southampton Itchen (Darren Paffey) and others, we will publish an updated impact assessment ahead of the Finance Bill.
I was asked a number of questions about the pressure that many students are facing, including from my friends from Cornwall, the hon. Member for Camborne and Redruth (Perran Moon) and my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham). We know that cost of living pressures have hit students hard. The previous Government removed maintenance grants and the real-term value of loan support for students fell by almost 20% between 2020 and 2024. We are taking action to put that right.
We are introducing a targeted maintenance grant from 2028-29 of up to £1,000 a year for disadvantaged students on top of their loan, putting cash in their pockets without adding to their debt. The new grants will support students from low-income households studying full-time courses, which is in line with the Government’s mission and industrial strategy. We are future-proofing maintenance loans by increasing them in line with forecast inflation every year, with the biggest cash increase going to students from the lowest-income families.
My hon. Friend the Member for Southampton Itchen raised the issue of student loans, and I want to address that in the time that remains to me. As we have heard from across the Chamber today, giving those who want it and have the ability the chance to study in higher education changes lives. We are determined to support students who want to go to university to fulfil their aspirations. We cannot lose sight of the value that student loans provide in enabling that and levelling the playing field at the point of access. They remove that upfront financial barrier to studying and enable students to repay when they are earning. We inherited a student loan system that is not working as fairly as it should, and we recognise that some students and graduates feel the impact of that.
We are making the tough but necessary decisions to deliver a fairer and more sustainable system. We increased the plan 2 thresholds in 2025—its first increase since 2021—and we again raised the plan 2 repayment threshold in April, to £29,385. We have also capped interest rates for plan 2 and plan 3 loans at 6% for the academic year 2026-27. There are a whole range of very important discussions that came up today. I know that myself—
Motion lapsed (Standing Order No. 10(6)).
Rugby League Clubs
(1 day, 8 hours ago)
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Valerie Vaz (in the Chair)
I will call Jon Trickett to move the motion. I will then call the Minister to respond. I remind other Members that they may make a speech only with prior permission from the Member in charge of the debate and the Minister. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Jon Trickett (Normanton and Hemsworth) (Lab)
I beg to move,
That this House has considered Government support for rugby league clubs.
It is a great pleasure to see you in the Chair, Ms Vaz. I am sure that you will be very firm with us, but very fair as well. It is also a special privilege to see the Minister in her place. I know that Barnsley, which she is very proud to represent, has a strong rugby league tradition.
I will start by explaining why this issue is so important and why it is such a great privilege to speak on this sport. As we know, there are two codes in rugby: rugby union, which is very familiar and offers great sporting spectacle, and rugby league, which also offers great moments of sporting prowess.
I vividly remember attending probably the most iconic rugby league final ever in 1968 with my dad and granddad at Wembley. It felt like the whole of the north of England came down to invade London—quite rightly, bringing our civilisation to the south. It was one of those great days when the rain never stopped—it had not stopped for several days. The pitch was a mud bath, literally covered in mud and water. It was very exciting, and in the last two minutes it was 11-10 to Leeds. In those days, I was supporting Leeds, as somebody who was born there, against Wakefield, where I have proudly been an MP for 30 years.
In the last minute, a penalty was given to Wakefield, right under the post. We would have expected it to be converted by the great rugby league player, Don Fox—who came from a great rugby league family and was born in my constituency—but the weather was atrocious. Everybody turned their back, because they could not bear to watch—Wakefield supporters hoping to hear the victory and Leeds supporters fearing what might happen. It was an amazing moment, and I will never forget it: he missed the penalty. That is not to show any disrespect to the Fox family, who were brilliant, but it meant that Leeds were victors. It is something that is fondly remembered. I am sure that I am the only Member of Parliament who was there at that great sporting event.
Rugby league offers great spectacle, but it has been treated in a way that has not been fully appropriate, and I fear for the future unless we can correct things.
Ian Lavery (Blyth and Ashington) (Lab)
I congratulate my hon. Friend for securing this important debate to Westminster Hall. My constituency, Blyth and Ashington, is well renowned for some world-class sportsmen—as it is commonly said, “You shout down the pit shaft, and world-class sportsmen will emerge.” Given my hon. Friend’s great wisdom and knowledge of rugby league, I wonder if he could say why, despite it being a traditionally working-class sport and despite the many opportunities, rugby league has not flourished areas such as mine in working-class Northumberland.
Jon Trickett
My hon. Friend is right that rugby league is a sport that grew up in working-class communities and especially in mining communities, so it is surprising that it has not taken root in his constituency. However, when we consider the discrimination that rugby league has suffered from over the years, it is maybe not so surprising. One of the things I will argue is that we need to do more to develop the sport across the whole country, especially in communities such as his. My hon. Friend is right, too, that whenever a player was injured in Featherstone in my patch, they would go to the pit head and shout down, “Send us up another forward,” or whatever it was, and one would emerge quickly, get changed and get on to the pitch. It was very much part of the mining tradition.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for securing this debate. Rugby union was my game—I apologise to him—but rugby league has had a magnificent, transformative impact across the United Kingdom. It is the beating heart of towns, providing vital structure, mental health support and community pride for young people, yet it is facing a financial squeeze. Does he agree that the Government must extend rugby league funding to support the sport’s future and enhance the funding strategy to protect these invaluable community assets from the financial ruin that they face?
Jon Trickett
The hon. Member makes an important point, and I agree.
To develop a bit about rugby league, in the areas I am most familiar with, rugby league—and sport in general—can be the most important agency for social cohesion. Sport can provide something that brings everybody together, whatever their different points of view or life experiences. In my constituency, Featherstone Rovers have played for decades, and there is a massive amount of pride in the fact that we have that team. I will come to the difficulties they are facing, and I hope we can find a way forward.
Let me remind the House that the BBC used to cover rugby league more or less weekly on “Grandstand”. Most people in this room are probably not old enough to remember the famous commentator, Eddie Waring, but I do well. So familiar was rugby league in those times, because of the BBC coverage, that many of Eddie Waring’s favourite expressions were well known across the whole country. Mike Yarwood, who was a great mimic at that time, used to talk with Eddie’s accent—which I cannot do. He used to talk about “up and under”, which was one of the ways a ball could be kicked. More importantly, when somebody was sent off, his favourite expression was, “Well, he’s been sent for an early bath”—I very much hope that you will not send me for an early bath today, Ms Vaz.
Rugby league ought to be a nationally recognised sport. I will come to the discrimination and the problems with television in a second, but let me remind the House that anyone who wants to watch rugby league on TV now has to go to two separate pay-per-view channels. It costs £61 a month, which is 5% of the total income of a person living on the minimum wage. People are being priced out of the spectacle, which is a great shame, because it is leading to the atrophy of the sport across the communities where it ought to be played. It is also stopping us from spreading rugby league further—I will come back to that in a second.
Rugby league was a product of the class system that operated in sport in those days. The so-called gentlemen, who did not need to be paid, would play rugby union. Those who were too poor could not afford to play rugby union, so rugby league was set up, so that players could be paid. That was the start of rugby league as a code; but the truth is that the divisions that existed then continue today.
I have identified one or two statistics that may surprise the House. If we look at the honours system, eight rugby union players have received a knighthood; there have only been two from rugby league, one of whom is the great Kevin Sinfield, who was knighted for his contributions to charity. That difference shows a level of discrimination. When we look at the national squads for rugby union, two thirds or more went to public school. I cannot find a single player for the national rugby league side who went to public school. It shows the class divisions, which surprisingly continue in sport after all these years.
It is disappointing that fewer than 40 universities have a rugby league side, whereas every single university that I can find has a rugby union side. Again, that shows that something is not quite working between the two codes. When it came to covid, as we know, sports were remunerated, but here is an astonishing fact: rugby union received about £130 million, whereas rugby league got £10 million or £11 million—ten times more went into rugby union from covid. I do wonder—perhaps the House would agree—whether those in the civil service making these decisions are often people who went to universities and schools that had rugby union, but have little comprehension of the importance of rugby league in areas such as mine. I think that demonstrates clear discrimination, and I hope that the Labour Government are aware of that—if they were not, then they are now, because I have drawn it to the Minister’s attention.
I want to move on to the situation facing Featherstone Rovers. Wakefield, which I now represent, has the honour of having three separate professional rugby league sides: Wakefield, Castleford and Featherstone. Unfortunately, due to bad management, Featherstone has gone into administration, and we have been struggling to find a way to bring the Rovers back to life. The team is the core of the people of Featherstone’s identity, as was mining—mining was stripped away many decades ago, but references to mining can still be seen everywhere in the township in Featherstone. The rugby league side, Featherstone Rovers, is a matter of great pride, and the fact that it went bankrupt and there is nobody playing on the pitch at the moment is heartbreaking for so many people I represent.
Gradually, we have been putting together a plan to try to bring Featherstone Rovers back to life. That has been difficult, and I have spent many hours trying to achieve it, but thanks to the recent appointment of a new chief executive at the Rugby Football League, we are now making progress. The RFL has said that it is prepared to help to acquire the assets, bearing in mind that there is a stadium with buildings around it and several acres at the back of it. The administrator has been difficult, but he has come to the view in the end that, because it is a community asset, he is prepared to sell it for slightly less than he might have thought it was worth in a completely commercial sense. We think that it can be acquired for about £1 million. When Labour was in charge of the council—it has changed hands recently—it put aside several million pounds for each of the three rugby league clubs. There is £700,000 still unallocated to Featherstone, and the council, under its new management, has now said that a substantial part of that, possibly half a million, will be made available to the rugby league for it to be able to acquire the assets.
Here comes the interesting part, because in Featherstone, thanks again to the Labour Government, we have something called Pride in Place, and we have been allocated £20 million over the coming ten years. I am a member of the Pride in Place board, by virtue of being the local MP—I do not know if I need to declare an interest, but I do in any event. The board has said that it is prepared to make a substantial contribution to the acquisition of the stadium and the surrounding land. It has been difficult to put this together, but the board is unanimous, and, led by the by the chair Kay Binnersley, we are now in a position to say that, when the money arrives from the Government in the next financial year, it can then be made available to the RFL.
I have met the new chief executive of the RFL, who is a dynamic and progressive individual, and we have agreed that we want to create a partnership between the Pride in Place board and the RFL to try to take this whole thing forward. That is desperately important, because without Featherstone Rovers playing, it has not been easy to create a fixture list, because there will be one less team than is required to set up the fixtures. There is an urgency to this. I have to say that it has been frustrating dealing with the RFL over the last year and a half on this matter, as it went from one temporary chief executive to another, but now it has a decision maker in place, and I am confident that he is determined to make this happen, and clearly he needs to do that for all the other teams in the rugby league.
Mark Sewards (Leeds South West and Morley) (Lab)
I could not agree more with my hon. Friend’s point about Pride in Place. I commend his efforts with the Pride in Place board. I have done something similar in my constituency. Our Pride in Place Farnley East board is giving money to Farnley Falcons. The club is at the heart of our community, bringing in young people from across the constituency and further afield. Will my hon. Friend join me in encouraging all those with Pride in Place boards to give some money to local rugby league clubs?
Jon Trickett
Many years ago, as a builder and plumber, I did lots of work on Morley Labour rooms, which my hon. Friend is probably familiar with to this day—that is completely by the by.
My hon. Friend is right that Pride in Place is there to give or reinforce pride in communities, now from the bottom up, with local people deciding what they need. Rugby league is part of that, but decisions needs to come from the community, not from above. In Featherstone and other areas, local councils need to be aware that their rules and codes do not apply to Pride in Place, although they currently manage the finances. The board itself has to decide the priorities.
We have a vision for a town of sporting excellence, bringing together all existing services. That could mean education, for which there is much to do in Featherstone, or health services, as there are many people with long-term illnesses and mental health problems. We have a vision for a town built around sporting provision, reaching out to the various cultural, health and educational needs of Featherstone people. They may have different views and experiences in life, but the one thing they have had is Featherstone Rovers, so it is important that the club is brought back together.
Our vision is for a renewal of the town, building on its existing pride, so that it is a place where people are extremely proud to live. They will be able to join in social and cultural activities as well. That all requires Featherstone Rovers to be brought back. We understand that the RFL cannot own the assets for ever, because other clubs will begin to resent it. The other clubs need to understand that, without Featherstone Rovers playing, they will not have a functioning league. It is important that the RFL does the things that the chief executive has said he wants to do.
The Labour administration at the council put in place a resilience fund. We have had different figures from the current leadership of the council, but I believe that there is still £700,000 in the kitty, with £500,000 going to the RFL. The other £200,000 will be needed for renovations to the stadium. I have now explained the background. It has been helpful for me to speak about rugby league in general, including the discrimination that it suffers and the situation in Featherstone.
As I said, I am delighted to see the Minister in her place, and I will press her on three matters. Could the Department consider carefully the RFL’s bid for funding? We need to develop the sport and take it into new areas. Many people are hungry for that kind of sporting experience. Secondly, could she take a close interest in order to ensure that the partnership I have described between the PIP board and the RFL proceeds at speed? We have an empty stadium and people asking what has happened to their team.
I have a final point. The problem for rugby league is that the feedstock has been cut off—that is, the ordinary kids who watch sport on TV and who live in poorer families. A lot of rugby league clubs are in deprived communities, such as Featherstone, where people are not able to pay for pay-per-view TV, so they do not see their heroes and they do not see the sport, its code or how it is played. That leaves us with a problem.
The Department has the power to list sporting events. It is disappointing and tragic that the rugby league world cup, which is happening right now, is not on terrestrial television. Of course, the BBC says that it has a deal to broadcast the event on the radio, but listening to it on the radio is not the same as watching our heroes on the pitch, as I did at 17, when I watched the match that I referred to earlier.
Will the Minister consider carefully whether we can list some of those matches so that communities everywhere can see the great sport that is rugby league? I look forward to hearing what I hope will be a positive response.
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to serve under your chairship, Ms Vaz.
I congratulate my hon. Friend the Member for Normanton and Hemsworth (Jon Trickett) on securing this debate. He is a constituency neighbour of mine, and, as a fellow Yorkshire MP, I know how important rugby league is to his area. He is such a champion for the sport, both in this place—as he has shown this morning—and beyond.
For over 130 years, rugby league has made a huge contribution to our society. Week in, week out, local people come together to support their clubs, their children’s teams and the players. Rugby league clubs are places where thousands of people play sport and get active every week. My hon. Friend spoke passionately about the impact of rugby league in post-industrial towns such as those we represent. He was right to say that I am very proud to represent Barnsley South in Parliament. We have fantastic grassroots teams in Barnsley, such as the Dearne Valley Bulldogs and the Dodworth Miners. This week, the Dodworth Miners under-12s became the first junior rugby league team ever from Barnsley to win a league and cup double, and I am sure the whole House will join me in congratulating them.
We see such teams all across the north of England, and the vital role that they play is reflected in the interest in today’s debate. We know that community sport, and especially sports such as rugby league, can play a major role in building confidence and teamwork, supporting the life skills of future generations and improving community cohesion. The social value generated by community sport and physical activity is vast—in excess of £122 billion a year—and every £1 spent on sport by rugby league community clubs generates a social return of more than £4. Such figures underscore the vital role that sports such as rugby league can play in driving positive public health and societal outcomes. That is why the Government believe that someone’s access to sport should never be determined by their postcode, background or gender.
Jon Trickett
The Minister is right to raise gender. It is fair to say that in the dim and distant past, rugby league was kind of a male sport, but now there are women’s teams all over the country, including in universities. We are very proud that Featherstone Rovers has one of the most successful women’s rugby league teams in the country. I thank her for giving me the opportunity to celebrate their success.
Stephanie Peacock
My hon. Friend is absolutely right and makes a really important point. That is why, as Sports Minister, I have set up the women’s sport taskforce. I will say more about women’s sport later in my speech.
The single biggest thing most likely to get a child active in sport is watching it live. If kids cannot watch their rugby heroes, they are far less likely to pick up a rugby ball. My hon. Friend is a huge champion for his local club, Featherstone Rovers. Featherstone Rovers has been at the heart of its local community for many years, and the uncertainty since it entered administration has hit the town hard. I commend the collective efforts of my hon. Friend, the local community and the RFL to revive the club.
Indeed, I met my hon. Friend to discuss this issue earlier in the year. As he mentioned, I understand that Wakefield council has set out proposals to provide £500,000 of emergency funding, match-funded by the RFL’s resilience fund, in a bid to get the team back on the field by 2027. Under those proposals, the likely scenario is that the RFL will take control of the ground and lease it to an ownership group.
On Pride in Place funding, power is being put in local hands through the resident-led Featherstone neighbourhood board, which is working with the local council and, of course, the constituency MP, my hon. Friend. Although spending choices rest locally with that board, I am fully supportive of local communities choosing to use the funding to protect and revitalise vital sporting institutions such as Featherstone Rovers, and I will raise that with the relevant Minister from the Ministry of Housing, Communities and Local Government.
I have seen at first hand the importance and impact of rugby league, having taken part in the Yorkshire versus Lancashire match at the Labour party conference at Everton stadium. I was joined by my hon. Friend the Member for Leeds South West and Morley (Mark Sewards), who is in attendance today, and I am pleased to report a Yorkshire win. It was a great opportunity to showcase the sport and to learn more about its work with Community Integrated Care, a registered charity that supports people with learning disabilities, autism, mental health needs and dementia. It was a great opportunity to talk to the RFL, and I look forward to meeting members again soon.
Sport England has committed £15.7 million to rugby league up to 2029. In the constituency of my hon. Friend the Member for Normanton and Hemsworth, that support is already delivering on the ground, funding new facilities at Hemsworth Dragons and pitch maintenance at Rycroft Hammers. Nationally, we are directing £400 million into upgrading grassroots sports facilities, deliberately prioritising the areas with the highest levels of deprivation and inactivity. My hon. Friend highlighted the RFL’s bid for funding the sport, facilities and community programme. I cannot make spending commitments today, but I would be happy to discuss that further with him and the RFL.
My hon. Friend made an important point about broadcasting, and I have heard his concerns. Under the listed events regime, the Challenge cup final remains protected on free-to-air television, but I acknowledge the concerns raised before the world cup. The Secretary of State expressed that she was disappointed. There was a last-minute agreement that the BBC would carry highlights, but I appreciate concerns that that did not go anywhere near far enough. We must help sports rights holders to strike the right balance between broadcasting revenue that keeps clubs solvent and ensuring that matches remain accessible to the public.
On the subject of watching England play, this time last year I was pleased to be cheering on England at Wembley as they played in the Ashes. The team are now down under to compete in the world cup. I wish them all the very best as they prepare for their final pool game in two days’ time.
The value of rugby league goes well beyond the 80 minutes on the pitch. Through our £330,000 investment in Rugby League Cares, current and former players are in our schools and towns having open and honest conversations with young men about mental health, isolation and loneliness. My hon. Friend was right to mention the social impact of the sport. Over the summer, I was delighted to go to the home of the Castleford Tigers to meet Rugby League Cares and Men in Sheds, seeing at first hand the powerful role that sport, including rugby league, plays in tackling social isolation and loneliness.
I have heard my hon. Friend’s concerns about honours, which he has put on the record. I know that the Secretary of State is on the record as sharing those concerns. We have all witnessed the extraordinary bond between the late, great Rob Burrow and Sir Kevin Sinfield—a reminder of the loyalty, courage and compassion that define the rugby league family. We are seeing the same spirit drive the growth of the women’s game, through initiatives such as RugBees and the inspiring expansion of the wheelchair super league. Just a few weeks ago, the Secretary of State visited Leigh Sports Village to support Sinfield during a leg of his “7 in 7” endurance challenge, in which he ran seven ultramarathons in seven days. Sinfield’s runs raise awareness and funds for motor neurone disease in honour of his former teammate and close friend, Rob Burrow.
I thank my hon. Friend once again for securing this debate and for standing up so effectively for his community and his sport. I look forward to working closely with him and the RFL in our coming meeting to ensure that rugby league gets the fair treatment, support and long-term investment it so richly deserves.
Question put and agreed to.
Causing Death by Dangerous or Careless Driving: Sentencing
(1 day, 8 hours ago)
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Mr Alex Barros-Curtis (Cardiff West) (Lab)
I beg to move,
That this House has considered the matter of sentencing for causing death by dangerous or careless driving.
It is a pleasure to serve under your chairship, Ms Lewell. I am grateful for the opportunity to open this debate, although I cannot honestly say that it is a pleasure to do so. We are here because people have lost their lives on our roads. Families have lost children, parents, partners and friends, and too many are left feeling that the justice system has not reflected the enormity of their loss. This debate is about accountability, public confidence and whether the law does enough to punish those responsible and deter others from making the same devastating choices.
I want to begin with the tragic case of my constituent Keely Morgan, a 15-year-old girl whose life was cut short while crossing the road in Cardiff. She was a much-loved daughter and a cherished granddaughter, sister and friend with so much to look forward to. On 1 May 2023, Keely was struck by a car while crossing at a pedestrian crossing in Caerau, in my constituency. She died at the scene.
The court heard that the driver was travelling above the speed limit, had been driving erratically and showing off, and had removed the vehicle’s black box, invalidating his insurance. The judge described him as an “irresponsible show-off”. He received 16 months’ imprisonment for causing death by careless driving, and 11 months for causing death by driving while uninsured, to be served concurrently. He was also disqualified from driving for two years and eight months, yet he was released after serving only around six and a half months.
Keely’s family must live with their loss for the rest of their lives. Her mother, Sian Morgan, has channelled her grief into campaigning for change. Her petition has attracted nearly 12,000 signatures, and I am pleased that Sian is in the Public Gallery today. I pay tribute to her determination to ensure that other families do not have to endure the same tragedy. Her campaign deserves to be heard, and, as her Member of Parliament, I will ensure that it is. This House must take seriously the questions that it raises.
I recognise that courts must consider the individual circumstances of every case. The distinction between careless and dangerous driving is important, and not every offence should result in the same sentence, but where a driver’s actions demonstrate a serious disregard for the safety of others and a life is lost, we must ask whether our sentencing framework adequately reflects such conduct.
Sadly, these concerns are not new in my constituency of Cardiff West. Almost a decade ago, my predecessor raised very similar concerns following the death of another constituent, in a case involving dangerous driving in Adamstown, Cardiff. The constituent was killed after two drivers deliberately pursued her and drove her off the road. Both were convicted of causing death by dangerous driving and sentenced to just six and a half and seven and a half years in prison respectively. The outcome then left the victim’s family members feeling that justice had not fully reflected the gravity of what had happened. How can I find myself, almost 10 years later, representing the same constituency, arguing the same point in the same Chamber? Why and how can history continue to repeat itself in this way?
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank my hon. Friend for shedding light on those cases. It cannot be easy for the families to hear again what happened. The reason we are back here, I expect, is because the sentences are not a deterrent, and because the term “death by dangerous driving” completely underplays what happens, particularly in the cases my hon. Friend explained. This is manslaughter. Does he agree that we should think not just about sentencing, but about how we present such cases to the courts?
Mr Barros-Curtis
I entirely agree. I will shortly come on to some actions that I am calling on the Government to take forward, some of which I think my hon. Friend will be pleased and will agree with.
In 2024, a collision in Carmarthenshire claimed the lives of two young people. In sentencing the driver at Swansea Crown court on 2 April this year, Judge Huw Rees observed that, although the driver had not exceeded the speed limit, his driving was
“simply not appropriate for the prevailing road conditions”.
Visibility was limited and conditions were extremely poor, yet the driver accelerated when greater caution was required. That driver received 16 months’ imprisonment suspended for 12 months on both counts of causing death by careless driving, with the sentences again running concurrently. He was disqualified from driving for 18 months and ordered to complete 200 hours of unpaid work. Two young lives were lost in that case, yet the driver did not receive an immediate custodial sentence.
That outcome and the others I have talked about in the cases of my constituents inevitably raise questions about whether the seriousness of the conduct and its consequences are adequately reflected in sentencing. Road safety cannot be measured solely by whether someone exceeds the speed limit: drivers must exercise judgment, adapt to conditions and put the safety of others first. When two lives are lost, the public must have confidence that the sentences reflect the seriousness of that failure.
Of course, sentencing is not solely about punishment; it must also be a deterrent. If we want drivers to think twice before speeding, showing off, using their phones at the wheel, taking risks in poor weather or disregarding other road users, the consequences must be clear and meaningful. When families repeatedly see outcomes that they perceive as inadequate, public confidence suffers. Justice must not only be done, it must be seen to be done. We must also consider what happens after an offender has been sentenced. Driving is a privilege, not a right. Where a driver has demonstrated a serious failure to meet their responsibilities, we must ensure that their return to the road is subject to appropriate safeguards.
I urge the Government to take action in four areas. First, driving disqualifications must be reviewed. Where a driver has demonstrated that they cannot be trusted to drive safely, there should be a robust process for assessing their fitness to return to the road. The Government should consider Sian’s proposal for automatic licence revocation following serious traffic incidents, notably before an appearance at or a conviction by a court. Such steps should be considered alongside mandatory reassessment before driving privileges are ever restored.
Kim Leadbeater (Spen Valley) (Lab)
I thank my hon. Friend for securing this very important debate. Road safety is a key issue in my constituency, and he is absolutely right to say that the sentences should reflect these hideous crimes. Does he also agree that we must look at prevention? As part of that, will he encourage the Government to look at the introduction of graduated driving licences, which are a way of preventing these horrendous incidents from taking place? There is much international evidence that they save lives.
Mr Barros-Curtis
I completely agree with my hon. Friend. She makes the point excellently; I totally endorse what she said and I am sure that the Minister was listening carefully. I look forward to hearing what he has to say about that.
I am aware that the suspension of driving licences was consulted on as part of the Department for Transport’s motoring offences consultation. That covered not just death by dangerous or careless driving but drink and drug-related offences. I ask the Minister to do everything he can to ensure that the Department for Transport carefully considers this question, and that of my hon. Friend the Member for Spen Valley (Kim Leadbeater), as it analyses those consultation responses.
Secondly, sentencing guidelines must be reviewed. The Government should examine guidelines for careless and dangerous driving resulting in death, ensuring that excessive speed, deliberate risk-taking, previous offending and disregard for safety receive appropriate weight.
Tahir Ali (Birmingham Hall Green and Moseley) (Lab)
I have previously spoken quite vociferously on the issue. Tougher sentences have to happen, with the revocation of licences for a very long period. Two lives were lost in my constituency: two months ago, we lost a 60-year-old man, and on the same stretch last year, we lost a 56-year-old. We have to look at the causes. If that includes people taking balloons, we have to restrict them from taking and being high on the gases in the balloons, but we also have to implement safety measures that would prevent cars doing 89 mph in a 20-mph zone.
Mr Barros-Curtis
I thank my hon. Friend for sharing those stories, I extend my greatest sympathies to the affected constituents who he so admirably represents, and I entirely agree with what he said.
Consistency is important, but it must not come at the expense of properly reflecting the circumstances of each crime. Relatedly, the Minister will know that the unduly lenient sentence scheme allows anyone to ask for certain Crown court sentences to be reviewed by the Attorney General’s Office if they think they are too lenient. The review is ultimately conducted by the Law Officers—the Attorney General or the Solicitor General—and if they consider that a sentence appears unduly lenient, they can ask the Court of Appeal to review it. However, only sentences passed in the Crown court in respect of offences triable only on indictment—that is, in the Crown Court—or those offences added to the scheme by subsequent order may be referred to the Court of Appeal. The offence of causing death by careless driving is not triable only on indictment and although there is a long list of offences that have been subsequently added to the ULS scheme by various orders, the offence of causing death by careless driving has not.
Following the sentence of Keely’s killer, Sian was mistakenly told by the prosecuting barrister and the Crown Prosecution Service lawyer dealing with the case that the sentence imposed might have been too lenient and that they would consider whether the matter should be referred under the ULS scheme. Regrettably, and for the reasons I have mentioned, that was a mistake. I wonder whether the Minister might reflect on that disconnect and say whether he will seek to inquire whether the offence of causing death by careless driving should be added to the ULS scheme.
Thirdly, the Government should consider whether legislative changes are needed to strengthen custodial sentences.
Catherine Fookes (Monmouthshire) (Lab)
I thank my hon. Friend for securing this important debate. I want to raise the really sad case of Sophie Brimble, which was brought to me by her sister. Sophie was killed as a passenger in a car with her boyfriend, who was driving at three times the speed limit. The driver was found unfit to plead and therefore walked out of court without having to face justice. The unfit to plead law dates back to 1836. Does my hon. Friend agree that reforming it is long overdue?
Mr Barros-Curtis
I thank my hon. Friend for sharing yet another tragic story. I again extend my sincere condolences to her constituents, and I entirely agree with her. I hope the Minister can address the issue she raised.
Of course a prison sentence can never bring back a loved one, but it must provide meaningful accountability and act as a genuine deterrent, as we have been saying. We must examine whether the sentences available and imposed in these most serious of cases adequately reflect the harm caused, including considering whether suspended sentences are appropriate in such cases.
Fourthly, we must address repeat offending and consider prevention. In my opinion, the Government should review whether the current penalties sufficiently address patterns of irresponsible driving before they lead to further tragedy. Stronger sentences alone will not solve every road safety problem. Enforcement, education and safer infrastructure must remain central.
Dr Lauren Sullivan (Gravesham) (Lab)
Government figures show that rural roads account for 60% of road deaths but only 45% of traffic, and speed-related factors were recorded in over half of all fatal collisions in the last year. In my constituency of Gravesham, we lost two people in Sole Street who were cyclists on the road. Does my hon. Friend agree that in rural villages—where roads are narrower, without pavements, and shared by walkers, cyclists and horse riders—need particular attention and intervention?
Mr Barros-Curtis
I entirely agree with my hon. Friend and I again extend my condolences to the people in her constituency who are affected. Part of my constituency is rural; indeed, these issues affect many constituencies across our four home nations. I am sure that the Minister was listening carefully to that intervention.
The debate is not about revenge; it is about justice, accountability and prevention. We cannot change what happened to the victims of these offences, but we can decide what lessons we learn from their deaths.
Monica Harding (Esher and Walton) (LD)
My constituent Darran is the father of Aidan Venison, who was only 19 when he was killed by a driver under the influence of drink and drugs who was not a first-time offender—he had already been banned from driving before, and on that occasion he was also uninsured. Aidan’s parents do not understand the leniency that might have been afforded to such a driver, or why they are still allowed to be on the roads. Does the hon. Gentleman agree that sometimes sentences that are perceived as lenient add to the heartbreak of parents?
Mr Barros-Curtis
I completely agree with the hon. Lady and extend my condolences to the constituent she is so admirably representing. I agree that it is about accountability, justice and the message that it sends to the victims and their families who have to live with that loss for the rest of their lives.
Tessa Munt (Wells and Mendip Hills) (LD)
I am so glad the hon. Gentleman has called this debate. I want to include the feeling of injustice that there is for those who suffer the loss of a family member. The person who killed the wife of one of my constituents with a car chose to give a “no comment” interview. There were only two vehicles involved: a bike ridden by my constituent’s wife, and a car. The perpetrator did not deny that she had done it, but she gave a “no comment” interview throughout the proceedings, which just added to the grief and injustice that that family feels.
Mr Barros-Curtis
I thank the hon. Lady for sharing that tragic story and I again extend my condolences to those affected. I entirely agree. We have to think of this issue holistically, because the impact is forever for the families and friends of the victims.
If two different families and two different MPs from the same constituency have been raising the same concerns for almost a decade, Parliament has a responsibility to listen. We must ask whether our laws provide sufficient punishment, deterrence and protection for the public. If they do not, we must have the courage to change them.
Every day, residents cross the zebra crossing in Caerau to visit the park. For the community there, it is a daily reminder of Keely and the life lost. I know that the community support for the family has been tremendous, but no amount of flowers, murals or kind words will bring Keely back to Sian and her lovely family. I am grateful and thank Sian and her family, as well as everyone who supported her campaign, for their courage. They have channelled their grief in an attempt to get the productive outcome that we are talking about here today.
Keely should have been able to cross that road safely and return home. She was so much more than the circumstances of her death. She was a daughter, a sister and a young girl with her whole life ahead of her. Her family should be able to remember her for who she was, rather than having to fight to ensure that no other family has to suffer the same indignity.
Ultimately, this issue is about ensuring that our sentencing framework reflects the seriousness of these offences, gives families confidence that justice has been served and acts as a meaningful deterrent to prevent further tragedies. We must ensure that the consequences are serious enough to reflect the harm caused, hold offenders accountable and deter others from taking the same risks. I urge the Government to review the legislation and sentencing framework and to take meaningful action. I look forward to hearing the Minister’s response and the further contributions of colleagues.
Emma Lewell (in the Chair)
I remind Members that they should not speak about any live or ongoing court cases or inquests.
Tessa Munt (Wells and Mendip Hills) (LD)
I thank the hon. Member for Cardiff West (Mr Barros-Curtis) for securing this debate.
To pick up on something that the hon. Gentleman said, driving is a privilege. Allowing somebody who has killed or caused serious injury to another person to be able to return to the road immediately seems particularly injurious. I hope that the Minister will be able to address the hon. Gentleman’s call for automatic license revocation. The current situation feels incredibly lenient, especially considering that people have to wait a very long time for court cases to come around. The perpetrator can carry on with the rest of their life while the family is suspended in utter grief. My sense is that suspended sentences are not appropriate either, particularly in the case I am thinking of, where somebody has given a “no comment” interview to the police and chosen not to speak. It just seems so desperately unfair.
It has already been mentioned, but I also want to address the fact that there are people who are driving without insurance, tax or a valid MOT, but the police are so stretched that they cannot deal with those sorts of issue when they come along. Those “minor” infringements, as considered by those who commit them, only increase the likelihood of someone carrying on to behave more irresponsibly. I ask the Minister to look at what is happening in France and Ireland, our nearest neighbours, who take different views and actions. I am happy to send the Minister information on that.
I want to talk about one other aspect: how to prevent dangerous behaviour before it results in even one more death. I will concentrate on speeding and racing, which is a serious concern in my constituency. Between 2019 and 2024, 204 people were killed or seriously injured: 29 lost their lives and 175 suffered serious injuries. I am thinking about accidents that happened in Dinder, just outside Wells; in Blackford; and recently in the village of Ston Easton.
Those incidents are catastrophic, not just for the people who live nearby and the families but desperate for everyone involved. The people killed or seriously injured are not just statistics; they represent individuals, families and communities, whose lives are often changed for ever. I do not suggest that all those collisions involved speeding, but nationally excessive speed was a contributory factor in around one in five fatal collisions in 2024. That surely underlines why tackling excessive speeding must be central to any serious strategy to reduce road deaths.
It is great that the Department for Transport has published the first road safety strategy in over a decade, but we have a Justice Minister here. I ask him to work with colleagues in the Department for Transport to address my straightforward question. The strategy includes a welcome ambition to reduce deaths and serious injuries by 65% by 2035, but where will that 65% reduction will come from? Many in the road safety community question whether the currently proposed measures are sufficient to achieve that ambition.
The strategy is relatively light on specific measures to tackle serious and persistent speeding, despite recognising speeding as one of the fatal four causes of death or serious injury on our roads. Since that strategy was published back in January, there must be an urgent need to finalise the Government’s response to the consultations, set out a clear delivery plan and to begin implementing the measures that will save lives.
I attended an event here in the Houses of Parliament where I was interested to see the intervening intelligent speed assistant, or IISA. I recognise that technology is fitted to new cars, but this feature can be fitted to cars that are already on the road. I have asked for some, as I drive 25,000 miles a year, going in and out of 20, 30 and 40 limits regularly, and I do not wish to get any points on my licence. I should declare an interest there.
Unlike the intelligence speed assistance technology fitted to new cars, which can warn drivers when they exceed the speed limit but can be overridden or switched off—although it should not be—intervening technology can actively prevent a vehicle from accelerating beyond the legal limit. That is not a theoretical idea; it is already happening in Virginia in the United States. A programme was introduced this year that allows the courts to require certain speeding offenders to use vehicles that are fitted with speed-limiting technology, which is an advance. Transport for London has also demonstrated high levels of speed-limit compliance, using intervening technology in its bus fleet.
Can this Minister get Transport Ministers to reassure us that the Secretary of State’s officials have examined the progress being made in other jurisdictions using IISA as part of offender management? Might he take a slightly different angle and just ask why we would not do that rather than why we would do it. It seems that it has been demonstrated to be effective and practical, and it has the potential to save lives, so I think that we should trial it at least.
I return to the families whose experiences lie at the heart of today’s debate. They deserve justice. They also deserve to know that we are doing everything reasonably possible to prevent other families from suffering as they have suffered.
Tahir Ali
I agree with the hon. Lady that we welcome the target of 65% by 2035, but by 2035 we could have had at least two general elections if not more. This is not fair on the families who have lost loved ones. We need to reduce the number of deaths and serious injuries more quickly—more urgently—than 2035. If that target is set, perhaps it needs to be brought forward, into this Parliament, so that we can make a significant start on achieving that objective.
Tessa Munt
I thank the hon. Gentleman for his intervention. I would say to the Minister that, even with all the optimism in the world that there might be another two lots of elections, that does not provide a reason not to act. This timetable really does need to be contracted. When such simple wins could be achieved, we should do things as quickly as we possibly can: 2035 does seem an awfully long way away.
There is an ambitious target—I understand that—but we need the measures, the right timetable and determination. I ask the Minister to answer those questions that are relevant to him, and I ask him kindly to pass those that he will not be able to answer on to the Department for Transport and the Secretary of State in particular.
Dame Siobhain McDonagh (Mitcham and Morden) (Lab)
It is a pleasure to serve under your chairship, Ms Lewell. I congratulate my hon. Friend the Member for Cardiff West (Mr Barros-Curtis) on securing this debate on an issue that is particularly close to my heart, having seen two young women from my constituency lose their lives as a result of dangerous driving. I know that too many colleagues in this room will have supported families who have experienced similar tragedies.
I want to begin with the story of Lillie Clack, and the extraordinary work that her family have undertaken in her memory. On Christmas Day 2021, Lillie was a passenger in a car driven by a man who had been drinking. That driver, Charlie Hilton, was fleeing the police at speeds of more than 100 mph when he lost control of the vehicle and crashed into a tree. Lillie suffered catastrophic injuries and died three days later. She was just 22 years old. In February 2023, Hilton was sentenced to 10 years and six months in prison for causing death by dangerous driving and other offences, but no prison sentence can bring Lillie back or undo the devastation caused to her family. And Lillie’s death is far from an isolated incident.
Steve Yemm (Mansfield) (Lab)
This week marks a year since the death of Abigail Eggleston, the girlfriend of one of my constituents, in similar circumstances. She was killed by Liam Bowes in a hit-and-run incident. I am sure that the thoughts of all of us will be with her family and her partner, William Payne. Bowes was sentenced to 12 years in prison for causing death by dangerous driving. Does my hon. Friend agree that justice has to be delivered for victims of crimes like this, and does she welcome the Government’s commitment that those convicted of this crime, this offence, will not be eligible for early release, which would otherwise have effectively halved the time that Bowes would serve in prison?
Dame Siobhain McDonagh
I absolutely agree. I extend my condolences and, I am sure, those of all Members to Abigail Eggleston’s family that she died in such tragic circumstances.
According to the Stop Excessive Speeders campaign, between 2020 and 2025, 282 people were killed or seriously injured in road collisions in Mitcham and Morden, including five who lost their lives. Those figures seem extraordinary.
Another young woman from my constituency who lost her life as a result of dangerous driving was Aalia Mahomed. Aalia was just 20 years old and was studying at King’s College London. In March last year, she was sitting on a bench outside her university when a van mounted the pavement and struck her. She died at the scene. The driver, Christopher Jackson, subsequently pleaded guilty to causing death by dangerous driving and was sentenced to eight years in prison. Aalia had her whole life ahead of her. Her family have been left to come to terms with a loss that no sentence can undo. Her death is a reminder that dangerous driving threatens not only those travelling on our roads, but pedestrians going about their everyday lives. It is tragedies like these that have led families to campaign for change.
Since Lillie’s death, her mum Debbie and her auntie Donna have worked tirelessly to ensure that something positive comes from the unimaginable tragedy. I want to take a moment to recognise what Debbie has achieved. On what would have been Lillie’s 25th birthday, Debbie opened Lillie’s in the Garden, a beautiful tea room at Merton and Sutton joint cemetery. I had the pleasure of attending its opening, and I cannot speak highly enough of the wonderful space that Debbie has created. It is somewhere for people visiting loved ones at the cemetery to find comfort, and somewhere for anyone passing to enjoy a cup of tea, a slice of cake and a friendly conversation. I encourage any hon. Members who find themselves on Garth Road in Lower Morden to pay it a visit.
Through her charity Eyes Wet Now, Debbie is also working to support other bereaved families. It is a remarkable achievement and a wonderful tribute to Lillie. Debbie and Donna have also campaigned for the introduction of Lillie’s law, with more than 43,000 people having signed their petition. Their campaign has two demands: first, that a driver’s licence be immediately suspended following a fatal road collision, pending investigation, and secondly that anyone convicted of causing death by dangerous driving should be permanently disqualified from driving, whether or not alcohol was involved. Those proposals seek justice for those who have lost their lives; they are also about preventing further tragedy.
I want to recognise the extraordinary determination of Claire Corkery, who has been campaigning for justice following the death of both her parents. In January 2024, Tom and Sue Corkery were walking their dog in Bearsted, Kent, when they were struck and killed by a speeding driver. In a single moment, Claire lost both her mum and her dad. The driver, Scott Gunn, was subsequently convicted of causing death by dangerous driving and was sentenced to 16 years in prison, but it took over a year for Gunn to be brought before the courts. Throughout that time, he was legally permitted to drive, and he admitted in court that he had continued to drive. Even after his conviction, Gunn received a driving ban of just eight years. Claire is understandably concerned that he could return to the roads once he has served his sentence and his disqualification has expired.
Claire has also campaigned against the early release of dangerous drivers. She is determined to ensure that their sentences reflect the seriousness of the lives lost. Her experience demonstrates precisely why the two demands of Lillie’s law are so important.
Peter Dowd (Bootle) (Lab)
I thank my hon. Friend for securing this debate. There are 4,154 people still on the road who have 12-plus points on their licence but who are not disqualified, on the grounds that it would cause disproportionate suffering to a third party. But what about the disproportionate suffering to families? Does my hon. Friend agree that that get-out needs reviewing?
Dame Siobhain McDonagh
I agree with my hon. Friend on that point.
Lillie’s law is campaigning for the power to suspend licences immediately following fatal collision, and for permanent disqualification for those convicted of causing death by dangerous driving. Claire’s determination, like Debbie’s, deserves recognition.
I recognise the important progress that the Government have already made. In August, the Government confirmed that those convicted of causing death by dangerous driving would be excluded from the new early release arrangements. Debbie Clack wrote to the Prime Minister personally to thank him for that decision. For a family who have endured so much, it meant a great deal to know that the seriousness of what happened to Lillie has been recognised.
I welcome the Government’s road safety strategy, which was published in January and which sets out an ambitious target to reduce the number of people killed or seriously injured by 65% by 2035. The strategy recognises the need for stronger action against dangerous drivers. It considers new powers to suspend the licences of those under investigation for the most serious motoring offences, resulting in death or serious injury. That is a significant step towards addressing one of the central concerns of Lillie’s law. I would be grateful if the Minister updated us on the progress of those proposals and on when we might expect to see them brought forward.
I also want to raise the question of permanent driving disqualification. I recognise that courts already have the power to impose lifetime driving bans. Will the Minister explain what consideration the Government have given to mandatory permanent disqualification, and whether further measures could be considered to strengthen the protection of the public?
The Government’s own road safety strategy makes an important point: holding a driving licence is not an automatic right. Principle should guide us as we consider how to protect people from the most dangerous drivers. I hope that the Minister will continue to listen to Debbie and families like hers, and work with them to ensure that we do everything possible to prevent another tragedy like those of Lillie, of Aalia and of Tom and Sue Corkery.
Jim Shannon (Strangford) (DUP)
It is always a pleasure to serve under your chairship, Ms Lewell, and to be called to speak. I thank the hon. Member for Cardiff West (Mr Barros-Curtis) for securing this incredibly sensitive debate, and I thank all hon. Members for their contributions. By the very nature of life, we will have circumstances in our constituencies where someone has passed away or been killed as a result of a road accident or has died afterwards.
I have to say this: I do not believe that anyone sets out in their car intending to take a life. Tragically, however, it does happen, whatever the reasons may be—from using a phone behind the wheel to driving under the influence of alcohol or drugs. I am old enough to remember when driving under the influence of alcohol was always the reason; then it was alcohol and drugs, or just drugs on their own. In the last few years, the prevalence of motorists using drugs that affect their driving and make them a threat to others behind the wheel, has become a massive issue.
The maximum penalty in England and Wales for causing death by dangerous driving is now life imprisonment, but in many cases, as the hon. Member for Mitcham and Morden (Dame Siobhain McDonagh) says, it is not applied. The hon. Lady referred to the possibility of a mandatory life sentence for the crime. That is probably what I would seek as well, rather than leaving it to the discretion of the magistrate or the judge handing out the sentence. Judges retain a large amount of discretion, allowing them to assess individual culpability. I am not quite sure how that is done. It is not for me to tell a judge that they are doing things wrong, because that is not my way of doing things, nor does my knowledge cover legal matters. However, I do believe that justice in these cases is best served by allowing judges to consider the unique circumstances of each case. It is clear that the system is largely effective, as 95% of those convicted of causing death by dangerous driving are sent to prison. The stats indicate that the majority receive a prison sentence, but often the cases that come to our attention are those in which there is no life sentence or no sending to prison.
I should have welcomed the Minister to his place; I apologise for not doing so earlier. I wish him well in his role, and I hope that Members can get the answers that we seek from him. None the less, we must continue to listen to the concerns of victims’ families, because that is what motivates us all as elected representatives.
As some Members highlighted, offenders can continue driving until conviction after causing a fatality, or can resume driving soon after leaving prison. When offenders receive a sentence and go to prison, it would be appropriate for them to have their driving licence removed. They should not be able to just resume driving as soon as they exit prison, in many cases probably after serving a small sentence. These gaps must be addressed, both to protect the public and to provide greater reassurance to families.
In Northern Ireland, the maximum sentence for causing death by dangerous driving remains 14 years. That should be brought into line with England and Wales, giving our courts greater powers to impose even harsher sentences where they see fit. My Strangford constituency has seen the blight of dangerous driving, with people losing their lives as a result. Just last year, on the same night, two young people were killed in separate incidents: Lucas Trainor, aged 12, and Jaidyn Rice, aged 16. They were two lovely young people and had not even got to the prime of life when they lost their lives as a result of accidents. My thoughts continue to be with both families, whose lives have been changed forever.
Members have explained and retold the stories of families in the Chamber today. The families who have been left behind face the impact every day of their lives. The son of one of my good friends was killed in a different circumstance. I remember that my friend always told me, “Jim, when I go to bed at night, I think of Stuart, and when I wake up in the morning, I think of Stuart.” That is the kind of thing these families do. Something like a vacant chair is very real to them, as are the anxiety, angst and pain in their hearts.
I call on the Government to make jail time mandatory for these cases while retaining some judicial discretion when sentencing. These cases are immensely complex. They cause profound distress to drivers, victims and their families. Although no sentence can ever reflect the loss suffered, the court must be allowed to assign a sentence that is truly reflective of blameworthiness. I thank the hon. Member for Cardiff West for giving us the chance to speak about this issue today, and I look forward to the Minister’s response.
Josh Dean (Hertford and Stortford) (Lab)
It is a pleasure to see you in the Chair this afternoon, Ms Lewell. I thank my hon. Friend the Member for Cardiff West (Mr Barros-Curtis) for securing this important debate.
Behind every road death is a family, a group of friends and loved ones who have been changed forever. Today, I want to speak about one such family from my constituency: the parents of Jess Waterman, who have joined us in the Gallery this afternoon, and whom the Minister kindly met earlier this year. On the evening of 19 February 2022, Jess’s partner—someone she knew and trusted—picked her up from the Watermans’ home in Bishop’s Stortford. He had never passed a theory test or practical driving test, and he took to the roads in full knowledge that he was not qualified to drive. He showed brazen disregard for Jess’s safety and the safety of other road users. He crashed that evening. When he fled the scene to avoid arrest, he left Jess behind, seriously injured. Tragically, Jess died the following day. She was three days short of her 21st birthday.
The police acted to apprehend the driver, but the outcome of this case raises serious questions about whether the law properly reflects the choices people make before getting behind the wheel, and the devastation that can follow when that goes wrong. The driver responsible for Jess’s death was convicted of causing death by careless driving rather than causing death by dangerous driving, and that distinction matters. Dangerous driving will generally involve driving that falls far below the standard expected of a competent driver. Careless driving can cover errors of judgment or lapses in attention. Driving without a licence is not simply careless. This was not a split-second mistake; it was a conscious decision taken before the journey ever began. It required premeditation. The driver knew that he was unqualified and that he should not be behind the wheel, but he chose to get behind the wheel anyway, with Jess in the car.
Jess’s death was treated in law as careless driving, in the same category as offences such as forgetting to get an MOT. As a result, in 2023 the man responsible for Jess’s death was sentenced to just four years in prison. Not only was he out of prison by early 2026 but, stunningly, he was caught driving again. Despite being handed a 10-year ban, he showed no remorse for the tragedy he brought upon the Watermans or regard for the one he might bring upon another family. He was rightly returned to prison. No parent expects to outlive their child, or to receive a phone call or visit from the police to tell them that their child is never coming home, but that is the reality that one driver’s actions have left the Waterman family living with every day.
Out of their loss, the Watermans have campaigned for change, calling for death caused while driving without a licence to be treated automatically as dangerous, and for stronger deterrents. They have worked tirelessly to ensure that no other family has to experience what they have endured, and I promised them I would do all I can to support their campaign and ensure that their voices are heard in the House.
As we consider these issues today, I ask colleagues to think about this: how can it be just that someone taking to the roads in the full knowledge that they are not qualified is not considered dangerous? How can we claim that there is a sufficient deterrent when Jess’s killer spent so little time in prison and immediately took to the roads again upon his release? We owe it to the Watermans, and to victims and their families, to ask in cases such as this whether sentencing powers properly reflect the profound harm that has been caused.
I stand with the Watermans as they call for a change in the law, and I thank the Minister for meeting us earlier this year. I would be grateful if he could update us on what actions he has taken, and if he would commit in this debate to working with colleagues in the Ministry of Justice and across Government to review whether causing a death while knowingly driving without a licence should automatically be treated as dangerous driving. The law should better reflect the poor choices made before a tragedy occurs and the consequences that families must live with forever.
I want to conclude by paying tribute to the Watermans. Out of grief, they have sought to make change and to protect others. I can honestly say that I cannot imagine showing the strength, determination and courage that they have shown, were I in their shoes. I am humbled by their commitment and their work, but they deserve more than just our admiration; they deserve our support. We must not fail to meet their call—for Sue, for Del, for their younger son, Jess’s brother, and, most importantly, for Jess.
Ben Maguire (North Cornwall) (LD)
It is a pleasure to serve under your chairmanship, Ms Lewell. I congratulate the hon. Member for Cardiff West (Mr Barros-Curtis) on securing this really important debate. I also commend him for his campaigning efforts on behalf of his constituents, especially the family of Keely Morgan, whom he referred to so powerfully in his speech. He was absolutely right that proper deterrents should be in place for offenders. I cannot even begin to imagine the pain that Keely’s family have been through following her tragic death, and the subsequent pain of navigating the justice system to address such serious failures of accountability and justice. Sadly, it is the same story for so many of our constituents up and down the country, including in one tragic case in my constituency, which I will touch on later.
I would like to take the opportunity to commend all hon. Members across the House, who have spoken so powerfully about their constituents’ tragic cases. Ther e are far too many similar experiences. On behalf of too many grieving families and the victims themselves, we Liberal Democrats are fighting for changes to sentencing for causing death or serious injury by dangerous or careless driving. We believe that the sentences handed to those who kill someone by dangerous driving should properly reflect the seriousness of their crimes. We supported much tougher maximum sentencing and longer disqualification periods in the Police, Crime, Sentencing and Courts Act 2022, and we have long been calling for an updated road safety strategy, which must be delivered as quickly as possible, following years of neglect of Britain’s roads by successive Governments.
One shocking case relating to road safety in my constituency of North Cornwall involved the hit and run of a young man named Ryan Saltern. In 2019, Ryan was hit and killed late at night by a drunk driver who sped away from the scene, leaving Ryan alone in the middle of the road to die. Despite killing Ryan, fleeing the scene and hiding from the police for 36 hours, Ryan’s killer was spared prison entirely and was handed a four-month suspended sentence and a 12-month driving ban in a magistrates court. Because the Crown Prosecution Service could not prove that he had been driving dangerously, he was charged only with failing to stop and report a road accident—essentially the same charge as if he had clipped someone’s wing mirror and driven off without reporting it. As in the case raised by my hon. Friend the Member for Wells and Mendip Hills (Tessa Munt), witnesses at the scene gave a “no comment” interview and experienced no consequences whatever. Imagine the heartbreak that that added to Ryan’s family.
In response to Ryan’s tragic death, his parents, Mark and Helen, and his sister, Leanne, launched their Ryan’s law campaign. Their aim is to widen the causing death by dangerous driving offence by including a failure to stop, call 999 and render aid at the scene until the emergency services arrive as an aggravating factor. Their online petition garnered 167,000 signatures, and support for the change is extremely strong, both locally in Cornwall and across our country. Sadly, hundreds of families do not see justice served.
During my first two years in this place as North Cornwall’s MP, I have been taken aback by the sheer dedication and perseverance of the Saltern family in campaigning on this vital issue. They have committed to ensure that no more families in Britain are left feeling badly let down and lost in the justice system after a road traffic collision. They are doing incredible work with RysHaven, which provides a safe, dedicated space where families grieving a loved one killed in a road accident can escape and process what happened.
I have joined the Saltern family in meetings with various Roads Ministers at the Department for Transport, the most recent of which was last month. I also raised their case with the previous Solicitor General, and I have tried to champion their cause in a number of debates in this House to demand the change that they and so many other families are calling for. That is why I was pleased that the Government announced a new road safety strategy at the start of this year, given that previous road safety strategies successfully delivered good improvements in road safety. But almost one year on, we are still seeking clarity on when the strategy will be implemented and how the several consultations that have already taken place will feed into it.
Monica Harding
Does my hon. Friend agree that, as part of the road safety strategy, we should consider graduated driving licences, which have been introduced in Northern Ireland? He talked about the risks of dangerous driving, and he mentioned drink and drugs, but youth is also a danger, because if kids get into a car and start to speed, it can end up being a tragic situation. Does he agree that England, Wales and Scotland should have the same rights as Northern Ireland?
Ben Maguire
I thank my hon. Friend for that excellent contribution. I agree that there is a strong case to be made for graduated licences—the hon. Member for Spen Valley (Kim Leadbeater) referred to international research showing the success of that scheme in Northern Ireland, and my hon. Friend talked about it too. Hopefully, the Minister was listening to that.
I welcome the Minister to his place. From having served with him on the Home Affairs Committee, I know he is very diligent, and I hope he will at least speak to his colleagues in the Department for Transport to get an update on the timing of the road safety strategy, which Members are still waiting to hear about. At the heart of submissions to each consultation on that strategy was the actual impact of road traffic collisions on victims and their families. The human cost of inaction is staggering: each of the 1,500 fatalities on Britain’s roads last year left a grieving family who wanted justice to be properly carried out on behalf of the loved one they had lost.
In August, the Victims’ Commissioner, Claire Waxman, set out six clear recommendations in relation to road safety in her report on barriers to justice. She said:
“Behind every road death or serious injury is a victim, a grieving family and lives changed forever. Yet too many victims told me they felt road crime was not treated with the seriousness it deserved”.
Her formal recommendations set out areas for improvement, including implementing stronger national standards for investigating road collisions, trauma-informed training for police officers and staff, and sustainable funding for specialist traffic collision victim support services.
I ask the Minister, when he winds up, to confirm whether he has read the Victims’ Commissioner’s report in full, and whether his Department is working cross-departmentally to implement its six recommendations. Will he also please provide clarity around the timeline for the road safety strategy, including when the Government will respond to the consultations held earlier this year? Finally, will he look into adopting a much more victim-centred approach in the new road safety strategy so that families like the Salterns and parents like Keely Morgan’s, as well as the countless families hon. Members have spoken about so powerfully today, can finally feel that their voice is being properly heard?
Dr Kieran Mullan (Bexhill and Battle) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell.
I thank the hon. Member for Cardiff West (Mr Barros-Curtis) for securing the debate, and for the way in which he spoke about his constituent Sian and her daughter Keely; he made their case powerfully. Preparing for the debate has given me the opportunity to read more about Sian and her campaign, and about Keely. As the hon. Member described, Keely was just 15 years old when she was killed in May 2023, struck by a car while crossing the road. The driver was convicted of causing her death by careless driving and of causing death while uninsured. He was sentenced to 16 months in prison.
In my work with victims and campaigners, I have got to know that until we speak to a person individually, we do not always know the ins and outs of a case, and I would not want to say anything incorrect. However, I can say confidently that a 15-year-old girl died, a family have been changed forever and the sentence was measured in months, not years. I know how I would feel if my similarly aged niece was killed in the same circumstances, given the criminal background of the individual concerned. I want to speak out for Sian and the way in which she has campaigned. More than 11,800 people have signed her petition calling for tougher sentences and for changes in the way such cases are handled.
As other hon. Members have said, under the Police, Crime, Sentencing and Courts Act 2022, introduced by the last Government, the maximum penalty for causing death by dangerous driving and for causing death by careless driving while under the influence of drink or drugs was raised from 14 years to life imprisonment. I know that those were not the exact same charges involved in Keely’s case, but that penalty demonstrates an attempt to recognise such offences and the impact they have. However, as the hon. Member for Strangford (Jim Shannon) described, maximum sentences are one thing and what judges give is another.
I will talk about a family with whom I have worked directly and about whom I can speak more confidently. Glenn and Rebecca Youens lost their daughter, Violet-Grace, in March 2017 when she was four years old. She was walking with her grandmother in St Helens when a stolen car driven at 83 mph in a 30 mph zone hit them. Violet-Grace died and her grandmother was left with life-changing injuries. The driver fled the scene. He was later sentenced to nine years and four months, but because he pleaded guilty he received a reduction and was released after around four and a half years. As Glenn powerfully described, the driver spent less time in prison than his daughter was alive.
I have been proud to support Glenn and his family. They are part of a group called Justice for Victims. In what I hope will be an inspiration to Sian, they also launched a petition and campaigned vociferously in their daughter’s memory, and they were a big part of why the maximum sentence for causing death by dangerous driving was increased. I also mention them because, like so many of those mentioned today, they really understand what it is to not get justice: they cared deeply and loved someone deeply, and they live in a country where they expected that if you do the right thing and someone does the wrong thing to you, the system will deliver justice for you. You cannot bring somebody back, but you do not want revenge; you want justice.
The concerns in these and many other cases demonstrate that, for many decades—this is not about one Government or another—the justice system in this country has not been delivering justice anywhere near as often as it should have been, particularly for serious offences and serious offenders who commit crimes again and again. During our time in government, we took some steps to try to address that. We did so in a major way by rolling back the automatic release point from halfway to two thirds of a sentence for some offenders. We have talked today about sentences, but we have to remember that the time someone spends in prison can be very different from the sentence that was passed down in court. Prior to that change, essentially everybody except those serving a life sentence served only half their sentence, so that was an important step.
Since then, this Government have taken a sledgehammer to victims’ ability to get justice by introducing even earlier release, at the one-third point of a sentence, for offenders sent to prison for most crimes. Prior to the later changes that we managed to help secure, offenders just like the person who killed Sian’s daughter would have been asked to spend only a third of their sentence in prison. That was disgraceful, and the Government’s aim was to make the release point even earlier, not just for those responsible for causing death by dangerous driving, but for those committed of rape and a whole series of other very serious crimes—this Government attempted to let them out of prison earlier, too.
The hon. Member for Cardiff West talked about whether Parliament listens enough. Very many MPs from different parties did listen to what people said about that and attempted to stop the Government doing it.
Dame Siobhain McDonagh
Is the hon. Member prepared to give credit to my constituent Miss Corkery, who campaigned tirelessly for death by dangerous driving to be excluded from the early release scheme, and to recognise that she and other campaigners were successful?
Dr Mullan
Yes, I will go on to speak about that in detail.
It is important for people watching and listening to the debate to know when the Minister gets up and gives us lots of warm words that he is the Minister who argued specifically to let people just like the gentleman involved in this case get out of prison after serving just a third of their sentence. It was only as a result of campaigners like Sian and the person that the hon. Member for Mitcham and Morden (Dame Siobhain McDonagh) mentioned, who fought the Government and had to tell their stories again and again in public, which I am sure Members know is a deeply traumatic thing to have to do, that the Government were forced into U-turning.
All this was based on a set of plans for an independent review that did absolutely nothing to engage with what victims actually want from sentencing policy when it comes to justice. As I said, this issue has gone on for decades. There was an opportunity to grapple with it properly and seek to understand why there is such a big gap and why we see these campaigns again and again, in relation to not just driving offences but a whole series of offences where victims feel so badly let down. Nothing was done to engage with what victims actually want from sentencing. Even today, the Government describe those early releases as “earned releases” when in fact they are automatic. These people automatically walk away from prison even earlier. Thank goodness that because of the campaigners, that does not apply to those more serious offences. I welcome that.
It is not only on this issue that Parliament sought to improve the situation. A new clause tabled during the passage of the Sentencing Act 2026 would have provided for automatic disqualification of those convicted of causing death by careless or dangerous driving. Hundreds of MPs clubbed together to defeat that amendment, including, I am afraid, some of those who have spoken in this debate in support of the people who have been affected by these sorts of cases. I understand that the hon. Member for Cardiff West actually did not oppose that measure and saw the sense in it that many other MPs saw. I congratulate him on that.
The Minister has to answer some basic questions. Do the Government believe that the current sentencing framework and the way it has been applied properly reflect the seriousness of causing somebody’s death through dangerous or careless driving? If the answer is yes, the Minister must explain why so many families and members of the public believe otherwise; if the answer is no, he needs to tell us what the Government intend to do about it.
Other Members have described things that the Government could do in the short term that we support. The ULS should absolutely be extended to those who cause death by careless driving—surely, if an offence was so serious that it led to the death of a person, it should be eligible. We continue to want to see automatic disqualification of those convicted of causing death by careless or dangerous driving. There is absolutely merit in providing the police, for example, with an opportunity to ensure that someone’s licence is temporarily revoked as they consider the facts on the ground. The police seek bail conditions to restrict what suspects can do prior to conviction all the time, and I see no reason why that should not also be applied in this case.
There is a broader question that this Government and previous Governments have failed to grip and sort out. With these serious offences, there is a massive, yawning gap between the justice that the public, and victims and their family members, just like Sian, want to see, and the justice that they actually get in court. The Opposition have committed to seeking to address that if we get back into government, but whichever party is in government, we have to finally grip this—even if it is difficult or expensive—so that we do not see victims of serious crime deeply let down, again and again, by a system that they expect to be there for them.
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
It is a pleasure to serve under your chairmanship, Ms Lewell. I thank my hon. Friend the Member for Cardiff West (Mr Barros-Curtis) for securing this incredibly important debate and raising these issues, both in the Chamber and outside of it with me and others in the weeks preceding the debate.
I start, as many have, by paying tribute to my hon. Friend’s constituent Sian, who is here today. She has shown extraordinary courage in fighting to make sure that the death of her daughter, Keely, was not in vain, and to make changes to improve the country for others. We should applaud her for that. It is not easy, and it is hugely admirable. I want to apologise Sian, too, because she wrote to me, through her Member of Parliament, and did not receive a prompt response. There has been an error in my office. That is unacceptable, and I am getting to the bottom of it. I look forward to meeting her later today, hopefully to talk about the substantive issue, but also to apologise to her personally.
I also thank my hon. Friend the Member for Hertford and Stortford (Josh Dean). I met him and the Watermans, and it is good to see Derek and Sue here again today. After that meeting, I committed to raise the specific issues of their campaign and the tragic death of Jess with the then Roads Minister, my hon. Friend the Member for Nottingham South (Lilian Greenwood). I did so in writing and then met her, her officials and her special advisers, who are political appointees in the Department for Transport, to make sure that those issues are really high on the agenda as the Government’s strategy on road safety comes into force. There is more that we can do; this is work in progress. The Roads Minister has changed since then, but I have also met the current Minister, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders)—indeed, because of the debate today, I wrote to him again this morning—to make sure that the campaigns and issues we are talking about are right at the top of his agenda.
I am not trying to duck the issues raised during the debate, but some of them are for the Department for Transport. I will try to address as many of them as possible and, of course, to deal with the sentencing aspects, but if I cannot address an issue, I will make sure that the Member who raised it gets a written response from the Roads Minister, who deals with some of the road safety issues.
Jim Shannon
I look forward to hearing the Minister’s responses to my questions. The hon. Member for Esher and Walton (Monica Harding) referred to graduated driver licensing in Northern Ireland, which we introduced after a long consultation and deliberation with all the bodies concerned. That seemed to be a strategic way forward, and it has certainly been received well by all sections of the general public in Northern Ireland. Is that something that the UK Government and the Ministry of Justice will consider introducing?
Jake Richards
Critically, it is not for my Department to consider it, but the Department for Transport is certainly looking at it and is alive to the international evidence that has been raised by a number of Members. I cannot get ahead of what the Roads Minister will set out, but I will make sure that he has heard the contributions to this debate.
I thank hon. Members from all parties for raising difficult cases, particularly my hon. Friend the Member for Mitcham and Morden (Dame Siobhain McDonagh). I was not aware of the work that Debbie has done around Lillie’s tragic death, so it was very moving to hear about that, and particularly about the café, which so many people will enjoy in her memory. I am very happy to meet Debbie if that would be helpful to her—or, indeed, I will get the Roads Minister to meet her if that would be more beneficial.
Dame Siobhain McDonagh
Debbie and Donna both met the previous road safety Minister to discuss their case and their reasons for asking for licences to be suspended after an accident, and then for there to be a lifetime ban. I thank the Minister for offering to meet them. I am sure Debbie will be marching her way towards him as she hears him speak.
Jake Richards
I look forward to Debbie marching into my office. Victims do not want to meet with a conveyor belt of Ministers from all different Departments. It is important that we have those meetings, because it is important that victims are heard and it is important for us to understand that behind every statistic in every paper we get to read in our ministerial boxes is a human life and a human tragedy, and I look forward to meeting her in due course, but what victims want is action. I hope that as I develop my speech, she will be reassured that we are taking these issues seriously and taking action.
Many other Members, some of whom made interventions and are longer here, raised important cases. It struck me, having been a Member of Parliament for only just over two years, that MPs get exposed to aspects of our country that normal citizens perhaps do not, and one of them is the prevalence and tragedy of road deaths. MPs are often notified if there has been an accident or if a criminal offence committed on our roads has led to a serious injury or death, and that happens far too regularly in our country. When you meet the families, as I have done in my Rother Valley constituency, it stays with you. I am determined to play my role to try to bring about safer roads.
I turn to the sentencing framework, because there has been some conflation of death by careless driving and death by dangerous driving. I am certainly not trying to educate Members, but it is my responsibility to set out the regime as it is today. Hon. Members know that sentencing within the framework that is set out in legislation is rightly a matter for the independent courts. Judges consider the facts of each case, weigh up any aggravating and mitigating factors, and follow relevant Sentencing Council guidelines before arriving at a sentence that is just and proportionate.
Some of the issues that have emerged in this debate are perhaps less about sentencing—although some certainly are about sentencing—than about the charging decision. I discussed this with my hon. Friend the Member for Hertford and Stortford and the Watermans. The CPS charging decision—the decision about what offence a defendant is charged with—is, and obviously should be, made independently of the Government, but the victims need to be involved in that decision. I am not saying that the CPS should do what they say, but it should involve them and communicate and engage with them. Too often, I meet victims of road traffic offences and other offences who simply have not been engaged with at all. I am talking to the Victims Minister to ensure that the CPS, where it can and where it is appropriate, is communicating with victims to make sure that the charging decision is the right one.
The law must reflect both the harm caused and how responsible the offender was for causing it, because while two drivers can cause the same terrible outcome, they may have done so through very different actions. That does not, of course, make one family’s loss any less than another’s, but the law has to distinguish between those different levels of blame.
Let me turn to the offences themselves. The most serious driving offence is causing death by dangerous driving. That is where someone’s driving falls far below the standard expected of a competent and careful driver, and where the danger should have been obvious. We are talking here about things such as excessive speed, racing and dangerous overtaking. For offences committed since June 2022, as mentioned by the spokesperson for the official Opposition, the hon. Member for Bexhill and Battle (Dr Mullan), the maximum sentence for causing death by dangerous driving is now life imprisonment. There is also a minimum five-year driving disqualification and a compulsory extended driving test before an offender can return to the road. Those are tough penalties, and rightly so. They give judges the power to impose the most serious punishment in the very worst cases. There is also the offence of causing death by careless or inconsiderate driving. That covers driving that falls below the expected standard but does not reach the higher threshold for dangerous driving. The maximum sentence is a five-year imprisonment, alongside a minimum 12-month driving ban.
I raise the issue of the CPS because, of course, what the defendant is charged with is what the judge and the court can deal with. The charging decision is often just as important to get right for victims, families and wider society as the final sentencing, which then may not seem fair or sufficient to victims. The distinction between dangerous and careless driving is really important in our law, although of course I recognise that it is difficult for grieving families to accept that when, clearly, the loss they have suffered is exactly the same.
I want to deal with some of the specifics that have been raised in the debate, in particular by my hon. Friend the Member for Cardiff West, about driving disqualification and whether there should be automatic disqualification—I think the hon. Member for Wells and Mendip Hills (Tessa Munt) also raised that. That is part of live discussions that I have had with the Department for Transport. It strikes me—I am very happy to put this on the record—that I have come across too many cases where driving disqualification is not taken seriously as part of the punishment. Often, a ban runs concurrently with a prison sentence, so there is the absurd situation that someone obviously cannot drive while they are in prison, and then they get out and they have never had any disqualification from driving at all.
I raised this issue in a meeting with the chair of the Sentencing Council; perhaps it was after the meeting with the Watermans that I raised it personally with the chair. I am not breaching any state secrets when I say that she was not persuaded, but I have asked the Sentencing Council to look again. The DFT is looking at the evidence to ensure that we have evidence-based policy, and I will continue pushing to see how we can ensure the judiciary use driving disqualification in a more muscular fashion.
The judiciary has the power to act. In this case, there is an issue about automating, but the judiciary has the power to implement lifelong driving bans, yet too often they seem not to be considered. I am not criticising our independent judges—I would never do that—but we must consider what we need to do as a Government and as a Parliament, while also considering the Sentencing Council’s role, in pushing this issue forward.
Dr Mullan
Just so the public can understand, there is a sentencing framework and judges have a role in applying that framework, but it would be totally within Parliament’s remit to make a ban mandatory—to make it automatic. We could do that. Indeed, a number of MPs voted for that last year, but it was blocked by the Government.
Jake Richards
The hon. Gentleman is absolutely right to say that Parliament could pass a law to introduce an automatic driving ban, but I think he was referring to a ban after conviction for dangerous driving. Automating such a ban before conviction would be more complex.
There is a general principle. As a Government, like Governments before us, we try to allow judicial discretion. Every case is different. I accept the hon. Gentleman’s point; I am not trying to hide from the argument. The judges have the power. We need to get and understand the evidence on how often they use it and why they are not using it. Legislating to force judges’ hands can lead to further absurdities and injustices in very different ways. We allow judicial discretion because every case is different, but as I say, I accept the point.
Tessa Munt
I regard this as a really serious matter. I hope the Minister will address potential suspension immediately after an accident, so that people are not driving around for a year, two years, three years, or four years while they await a court case. In the same way as a perpetrator of sexual abuse, domestic abuse or whatever has to say where they live, so that the local police know where they live, one could ensure that the local police are aware that person X is not permitted to drive for a period of five years, 10 years or even forever. The local police will be the people who pick that up.
Jake Richards
The hon. Lady is right to raise the duration of the period before trial or conviction; too often, it is far too long, but solving this problem is not as straightforward as potentially suspending someone immediately after the event. As she is no doubt aware, often very complex investigations have to take place. Of course, suspension can be a bail condition, and I am trying to assess why in too many cases it is not used.
I remember a case raised with me by my hon. Friend the Member for West Bromwich (Sarah Coombes), in which someone had been bailed for causing death by dangerous driving—I think that is correct. They immediately got in a car and were convicted of drunk driving just a few hours later. That is absurd. More generally, we have to start taking driving offences, whether they are low level or high level, more seriously. The road safety strategy seeks to do that, and we want to get on with it. I am pushing the Roads Minister to work with me to make sure that seriousness of these offences is reflected in sentencing guidelines as much as possible.
As well as sentencing, my hon. Friend the Member for Cardiff West spoke about graduated driving licensing. I hope I have dealt with that issue; it is on the agenda. It is very much a DFT issue, so I do not want to comment too much on it.
On sentencing guidelines, I am in a constitutional dialogue with the Sentencing Council on lots of issues and that is one of them. I will be careful what else I say about it, but I am very much alive to it.
I am also very alive to the ULS scheme. The Law Commission is working on the ULS scheme, as my hon. Friend no doubt knows from his time working with the Law Officers. We need to assess whether death by careless driving should be added to the list of offences that can be considered under the scheme. I can commit today to doing that.
Jake Richards
I am happy to write to the Law Commission to ask whether to consider that specific issue. I am going to consider it anyway. I want the Law Commission to do it—evidence would be helpful—but we will work with the Attorney General’s office to do that none the less. There will no doubt be some effects to that, but let us see what we can do.
My hon. Friend the Member for Cardiff West talked last about prevention. Again, at its heart the road safety strategy tries to reach its 65% reduction target by through prevention. There is a serious amount of investment. This is the first road safety strategy in a decade, and it is backed with, I think, £18 million in prevention work, which is not an insignificant sum. We would like to do more, but I know that my hon. Friend the Roads Minister will work hard.
In terms of other questions from Members about the road safety strategy more generally, it is not my strategy, so it is difficult for me to comment on timings and when that will be. I will ask my hon. Friend the Roads Minister to write to Members who have raised specific questions and make sure that my office gets in touch with him on that.
Tessa Munt
I know that everybody has the right not to comment, but it is simply outrageous when that has no weight. It would be different if someone had had some sort of medical episode that meant that they were not able to remember what had happened, but where that is clearly not the case, and someone is advised by their solicitor not to comment throughout proceedings, it is really very tough on the families. Will the Minister consider that point and see if there is a way to put some weighting behind that? Will he also speak to the Victims Minister at the Ministry of Justice, because it happens repeatedly?
Jake Richards
The hon. Lady raises a wider point about defendant conduct during a criminal investigation and how that should be taken into account in the sentencing. There are mechanisms by which that is done already. The judge considers a large number of factors, including whether the defendant has taken responsibility for their actions. If they have undertaken a “no comment” interview consistently, and simply not engaged with the criminal investigation process, that should be taken into account in sentencing.
Tessa Munt
I do not want to whang on, but I know that the Minister’s Department has looked just recently at what happens to people who refuse to come to court to hear their sentence, so clearly there is the ability to intervene in the process. I entreat the Minister to do something more.
Jake Richards
I think the Lord Chancellor announced last week further action on getting defendants to face up to their actions as much as is possible. Frankly, that is what we are talking about. We cannot force a defendant to give answers if they do not want to, but that can certainly be reflected in the sentencing regime, and it is reflected in the sentencing regime. If there are any other suggestions about how we can go further, I would be more than happy to hear from the hon. Member for Wells and Mendip Hills, as a member of the Justice Committee. She always gives me the signal that she will write to me, and I look forward to responding to her in due course.
Jake Richards
No. Too often, families feel let down by the justice system in lots of different ways, whether by the final sentence, by the way they were treated, or, in the case that my hon. Friend the Member for Cardiff West raises, by misinformation being given about options at the end. That can cause huge damage. I am not criticising the individuals in that case; they are hard-working individuals and it is a complex area of law. We just need to get some of the basics right to make the system as amenable as humanly possible for victims when they are navigating the most traumatic time in their lives. Too often it is not. I accept that point in relation to sentences as well. We are in a complex constitutional relationship. I am not going to criticise independent judges or the sentences given in any individual case—it would be wrong of me to do so—but I accept that too often victims feel that justice has not been done.
When I knock on doors in my constituency, road safety is top of my constituents’ priority list, and that is the case in so many places, especially in rural villages, as the hon. Member for Cardiff West said. There is a real disconnect between the prioritisation of road safety and how often we talk about it in this place. If we can all do our bit to raise these issues—with me, but also across Government—we will be doing a service to the country and even more so to victims. I thank everyone here today, particularly those in the Public Gallery. I look forward to continuing this discussion and to taking action in the coming weeks and months.
Mr Barros-Curtis
Thank you, Ms Lewell, for your excellent chairing of this debate.
I thank everybody who has contributed. It has been incredibly humbling to hear the stories of loss and tragedy, and, as the Minister said, of such cases’ prevalence. I am particularly touched to have Sian and her family and Sue and Del Waterman in the Gallery, and to hear inspiring examples of individuals channelling grief and tragedy into learning lessons to ensure that people do not have to go through such tragedies again. That includes the example of Lillie’s law, as mentioned by my hon. Friend the Member for Mitcham and Morden (Dame Siobhain McDonagh).
We have been talking about this issue for too long and too often in this place, so I am grateful for what the Minister said about the action that I and others have called for. I shall appreciate anything he can do to impress the urgency of the situation on the new Roads Minister. Will he encourage him to meet me and no doubt Sian again, and to listen to the calls of action from me and others who have spoken, as well as the Watermans and the proposers of Lillie’s law? Anything he can do to drive change across Government will be central to ensuring that this pernicious issue is dealt with. It has gone on for too long.
In his discussions within the constitutional pool, will the Minister speak to the chief prosecutor of Wales about some of the challenges that have been found? Will he ask why, in the case of my constituent, sentencing was pegged and they had to go with the lesser offence? He could learn some invaluable lessons for part of the wider framework that he is putting together.
I will finish by thanking everyone for contributing. First and foremost, I send my condolences to all the constituents whose cases we have referred to. I particularly thank Sian and her family for inspiring me and allowing me to work with them to drive change.
Question put and agreed to.
Resolved,
That this House has considered the matter of sentencing for causing death by dangerous or careless driving.
HCRG Care Group: Performance in the South-west
(1 day, 8 hours ago)
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Emma Lewell (in the Chair)
I remind hon. Members that they may make a speech only with the prior permission of the Member in charge of the debate and the Minister. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates. I call Sarah Gibson to move the motion.
Sarah Gibson (Chippenham) (LD)
I beg to move,
That this House has considered the performance of HCRG Care Group in the south-west.
It is a pleasure to serve under your chairmanship, Ms Lewell. I am grateful for having secured this debate about the performance of HCRG in the south-west, and Wiltshire in particular. Over recent months, a growing number of constituents, carers and healthcare professionals have contacted me. I want to open by thanking the staff who have stuck their heads above the parapet and asked their elected representatives to put HCRG’s performance on the Minister’s radar. Some of those staff are sitting in the Gallery, and I thank them for coming.
The communities served by the HCRG contract are diverse: Bath and North East Somerset, Swindon and Wiltshire. Each has its own challenges, demographics and patterns of service use. The issue is not whether one area matters more than another; it is whether local circumstances are properly understood. District nurses covering rural Wiltshire face challenges very different from those of nurses working in more urban areas, yet many of the staff who contacted me feel that those differences have not been properly recognised.
Wiltshire is a large, rural county, where patients can live miles from healthcare facilities. Community nursing teams often spend significant amounts of the day travelling between appointments. Aggregate figures for a large contract area tell part of the story, but they can also obscure local pressures and problems. A successful service model is one that understands those differences and responds to them. I am afraid that I have concluded that HCRG does not understand those differences.
When responsibility for community health services was awarded to HCRG in October 2024, patients were promised more joined-up care, easier access to services and simpler overall experiences.
Will Stone (Swindon North) (Lab)
I also thank the members of staff who have taken the time to come here and put themselves forward. Does the hon. Lady agree that HCRG’s promise of improving services through a single access point has been a historic failure and that, if it does not manage to get back on track, we should look at re-evaluating its contracts?
Sarah Gibson
The hon. Member is absolutely right. There is serious concern about what was promised and what has been delivered. The central part of that vision and delivery was the single point of access. As he has highlighted, that is an attractive idea on paper but the reality is completely different. Constituents repeatedly tell me about the long waits on phones, missed callbacks, referrals that are difficult to track and urgent cases not reaching the right team quickly enough.
Brian Mathew (Melksham and Devizes) (LD)
Does my hon. Friend agree that one of the most disruptive changes for frontline staff and patients has been the loss of dedicated admin support in favour of the so-called single point of access—or SPA—that simply does not work? If HCRG is serious about improving services, restoring adequate admin support for clinical teams must surely be part of the solution. Time spent on admin by clinical staff is time spent away from patients.
Sarah Gibson
I absolutely agree with my hon. Friend and will come to that point. The biggest concern for staff is patient safety, which they have clearly highlighted to us. One Chippenham resident told me they waited an hour to get through to the single point of access, only to be told to expect a callback, which did not arrive until the following day. A constituent from Calne described spending a week making calls, leaving messages and sending emails simply to secure a podiatry appointment. I understand that, in the end, he was so desperate that he just went into the offices, but not everyone can do that. I appreciate that the integrated care board, the commissioner, has the single point of access under surveillance. But as I will return to later, being under surveillance is just not enough for our residents.
Many of the concerns raised with me have come not only from patients but from staff. I have heard concerns about growing caseloads, vacancies, the loss of experienced staff and, as my hon. Friend the Member for Melksham and Devizes (Brian Mathew) mentioned, the reduction of administrative support.
One nurse reported that what had previously been 10 visits per day had increased to approximately 15. Another described seeing 14 patients during a shift that overran by 90 minutes. Staff speak of chronic understaffing, excessive workloads, and concerns about the impact that the pressures are having on patients and the workforce.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for securing this debate. The HCRG took over a substantial NHS contract to run the community health service in the south-west of England. I share her concerns about the long delays faced by patients: similar issues have come up in my constituency in Northern Ireland, where the group struggles to provide services due to worker shortages and lack of funding. Does the hon. Lady agree that the ability of private care providers to deliver NHS-contracted services effectively and reliably must be more thoroughly assessed before the contracts are handed out?
Sarah Gibson
The hon. Member is quite right. We are seeing promises not being delivered; whether that is because HCRG is a private service or because of the management of the system is not for me to say. I hope that the Minister will be able to look into the matter.
I personally spend a lot of time in the NHS—not out of choice, but as a patient and a carer for my husband. The frontline staff are fabulous. They go above and beyond to support the patient, regardless of whether that patient happens to be their MP. But as their MP, I do find that the staff tend to approach me in confidence to say that they fear using the formal channels for feedback. Patients and staff working across the community-based healthcare system are raising the same issues with me: delays, difficulty navigating the referral pathway and concerns about whether requests always reach the right clinical team. I think Ministers have a responsibility to take those concerns as seriously as the Members sitting next to me.
Patient safety is my chief concern since HCRG took over. One community nurse described families contacting nursing teams because a loved one approaching the end of life was experiencing severe pain despite being told that help would be available. The nurse reported instances of when no referral appeared to have reached the community nursing team at all. Visits were eventually arranged, but the patient spent several hours without adequate pain relief. A former community nurse separately described trying to obtain additional medication for palliative patients and not being able to get it. Nobody approaching the end of their life should spend hours in avoidable pain because the system is inadequate.
I have also heard concerns about delayed wound care, time-critical medication and urgent catheter issues. One district nurse described attending a patient whose leg wounds had leaked through his dressing. His daughter had contacted the service twice over the weekend without receiving assistance. By the time the nurse arrived, the patient had resorted to wrapping plastic bags around his legs—and I understand that the same problem occurred the following weekend.
The concerns I have received are not limited to community nursing. A physiotherapist working in Chippenham hospital described concerns about the introduction of the new referral system. According to the information, staff noticed that referrals were dropping dramatically under the new system. But when those delayed referrals were eventually identified and processed, clinicians faced a sudden influx of cases, including urgent post-operative patients.
We are talking about knee replacements not being seen in a timely manner, in which case they will end up being re-done. That is a cost for no reason. Clinicians describe patients waiting around eight weeks after knee replacement surgeries, despite the treatment being expected much sooner. The concerns raised are not simply about waiting times, but about the possibility of avoidable deterioration and long-term impacts on recovery. They are not simply administrative inconveniences; they are potentially about patient safety.
I want to touch briefly on wheelchair services. I understand that Wiltshire currently has one wheelchair technician, although it had originally been intended to have four. One constituent from Calne told me that she was supplied with an unsuitable wheelchair without being properly measured. She raised concerns about the difficulty, her safety and the fact that she could not get on to the bus. Despite repeated attempts over months to resolve the matter, she is getting nowhere. Another constituent reported from Chippenham that their replacement battery and updated seating did not arrive, which meant that they were unable to get to college. When repair and maintenance services are not functioning as they should, the consequences for the patient are immediate and profound.
Something that particularly troubled me was a comment made to me by some patients who were no longer bothering to complain because they had become accustomed to the delays and difficulties. Sometimes, the absence of formal complaints reflects a loss of confidence rather than anything else. That is particularly concerning when we think about older patients, disabled patients and those already struggling to navigate a complex health system. The people who find it the hardest to access services are often the people least likely to make their voices heard. That is why scrutiny and transparency matter.
When constituents raise concerns about HCRG services, they expect clear, simple answers. Who is responsible? We have an ICBC contract oversight group that reports to the ICBC collaborative oversight forum. We have the BSW community delivery group, which oversees transformation across the system. We have joint contract oversight groups, quality boards and safeguarding groups that all scrutinise performance, but many of the same organisations sit across multiple levels of that oversight. The integrated care board, the local authority commissions and the HCRG itself are involved throughout that governance structure. The organisations commissioning the contract and managing the contract are also scrutinising the contract—all of them seem to be on the same table. Frankly, even we elected representatives struggle to work out who is accountable.
When everyone is involved in the oversight, it can be remarkably difficult to identify who is responsible for acting when problems emerge. There is a risk that organisations end up marking their own homework, with concerns passing between governance groups rather than being subject to genuinely independent challenge. Patients deserve a system in which responsibility is visible, understandable and transparent from the outset. Where persistent concerns are being raised about access to care, referral pathways and patient safety, it is entirely reasonable to ask whether the Care Quality Commission should take a closer look. We should not worry about independent scrutiny; we should welcome it, because it will lead to improvements.
I would be grateful if the Minister addressed two specific points. First, will she ask BSW’s ICB and the HCRG to publish some comparable pre-transformation and post-transformation performance data that includes call waiting times, callback performance, referral processing times, complaints and patient outcome, broken down where possible to a local level? In that way, patients and parliamentarians will be able to see whether the promised improvements have actually been delivered a year and a half into the contract, despite the fact that the group had six months before the contract started to provide for the transition.
Secondly, will the Minister engage with the Care Quality Commission about a case for further independent scrutiny of HCRG’s Wiltshire services and clarify what further regulatory action may be available if the persistent concerns about access, referrals and patient safety continue, as was referenced by my hon. Friend the Member for Melksham and Devizes?
Patients do not really care how many committees or meetings are called; they want answers. Their concern is whether they are getting the care they need, when they need it.
The Minister for Secondary Care (Karin Smyth)
It is a pleasure to serve under your chairship, Ms Lewell. I thank the hon. Member for Chippenham (Sarah Gibson) for securing this debate and for her well-informed and considered set of proposals about a contract of which I am aware. I will try to address most of her points. The contract was signed just after the general election, but it was on my radar before then, partly as a local MP. As I think the hon. Lady said, there are staff here today, and I am conscious that this remains a concern for staff and some of the trade unions—not least because my hon. Friend the Member for Swindon North (Will Stone) has kept it on my radar. I am absolutely aware of the genesis of the process by which this contract came forward, and I want to make sure that people know that. I will not rehearse it, however; we are where we are now.
As I think the hon. Lady said, now we need to make sure that what was promised is delivered. That is what we all want to see for the people of her community and across the wider ICB. I want to be clear on our general expectations of community services: they are really vital to the left shift, particularly in rural areas. A wide range of services is delivered under that umbrella—from district nurses to services provided by allied health professionals, such as physiotherapy and occupational therapy—for adults and children where they live, in local communities. They also provide really good local jobs.
Those services are vital to supporting our ambitions for neighbourhood health, which is why we set out clear ambitions for them in our medium-term planning framework. For the first time, we have set a target for systems to reduce long waits for community health services: by 2028-29, at least 80% of activity delivered by community health services should take place within 18 weeks, bringing community health services in line with targets for elective care. We have also published guidance outlining the core components of community health services for children, young people and adults that ICBs should provide. That guidance is hugely important for many of the issues that the hon. Member for Chippenham has raised today. We know that there is variation in the services available across the country, and that people are waiting too long to access community health services. That is why this Government are taking action to reduce unwarranted variation, cut waits and improve access to high-quality community services. That is where we want to get to.
Moving on to HCRG Care Group’s performance, as we know, it has taken on the contract to bring together more than 130 community health and care services across the ICB area. It is a large-scale “transformation” programme, as it is called. Since the contract was awarded, the ICB has obviously had to work very closely with it. The ICB is responsible for managing the contract, and I met it in advance of this debate to hear from it as well. As I understand it, the ICB has arrangements in place—the hon. Lady alluded to how many there are—to oversee quality, safety and performance across all those commissioned services, and performance is regularly monitored. I recognise the concerns about delays, callbacks and referrals across the teams, and about getting people through the single point of access. Single points of access have been worked on for many years under many different contracts. Generally, they should do what they say on the tin and actually help people move forward, so HCRG does need to make its work.
I understand that, as a result of some of the issues that have been raised, the ICB is increasing its oversight, bringing together the provider and the system to support improvement. It is really important that that work also brings together patients, carers, the local community, staff and other stakeholders as it develops. The ICB assures me that it remains committed to engaging openly with those communities, with MPs and with Healthwatch throughout the delivery and development of those community services.
Sarah Gibson
Does the Minister agree that the complexity of the oversight system, with the same people in every single one of its groups, does not help staff or patients to feel that there is genuine, independent scrutiny of what is happening? We are getting the same answers from the same people.
Karin Smyth
I will come on to some of that, because it is also tied up with the Health Bill and the things that we are proposing to do for the future. The hon. Lady also touched on one of my favourite subjects: the accountability of local health systems.
The hospital at home services are also important—as it says on the tin—to keep people out of hospital when they do not need to be there and to support early discharge. They remain an important part of the community services offer across Bath and North East Somerset, Swindon and Wiltshire ICB. There have been changes to the service provision and I am assured by the ICB that there are no plans to reduce capacity or withdraw the hospital at home service—I am sure that the hon. Lady will correct me if that is wrong. The ICB is currently undertaking a review of the services following concerns raised, and will continue to monitor the impact of those changes to ensure that safe and effective care is maintained. Again, that is absolutely the direction of travel in that we want to see those services change and improve.
Sarah Gibson
At the risk of delaying her, will the Minister give way on that point?
Emma Lewell (in the Chair)
Order. Will the hon. Member refrain from shouting out, please?
Karin Smyth
Industrial relations are also important. We cannot run a health and care service without good staff who are well supported, nor without maintaining good industrial relations at a local level. That is a matter primarily for the group, its employers and recognised trade unions. The ICB needs to continue to monitor that and go through those established processes for doing so. It needs to keep working with them and we certainly support that at a national level.
On the wider issues about supporting ICB performance, I sympathise. I have spoken many times in Opposition and Government about the frustrations of local Members of Parliament in understanding the very fragmented system left under the Lansley reforms. I appreciate what the hon. Lady is saying from her position in Chippenham, and that may be different from other positions—it is a large geographic area. That is one of the issues that we need to get right. We are working closely on it in the Health Bill, where we are devolving responsibility and accountability for commissioning and providing services at a local level. That is the right thing to do. We also need to get right the link to neighbourhoods and place through local authorities while strengthening health and wellbeing boards. That is the direction of travel in the Bill and what we are currently trying to make happen.
ICBs are held to account nationally for delivering for patients. The oversight framework provides a transparent approach for assessing performance. Another thing that we have changed since coming into power is that from 2026-27 every ICB will be placed in a delivery segment based on national performance measures. That will help to identify when greater support, scrutiny or intervention is needed at the national level. That will be complemented by an annual assessment of how effectively each ICB is discharging its statutory functions. Where performance is falling short, oversight can be increased and support can be targeted at the areas of challenge and, where necessary, formal intervention powers are available. That brings ICBs into line with other providers.
At the same time we are strengthening ICBs’ commissioning capability, partly through the Health Bill. We have the strategic commissioning framework setting out what effective strategic commissioning looks like, and the strategic commissioning development programme provides targeted support to strengthen those capabilities in local systems. We recognise that there is variability across the country. To be clear: ICBs are responsible for assuring the quality, effectiveness and value of the services that they commission, while NHS England oversees the performance of ICBs through the oversight framework, including consideration of how effectively they discharge those commissioning responsibilities.
Finally, we have heard about issues with palliative and end-of-life care. Patients approaching the end of life and those important to them—their closest friends and family—should absolutely receive compassionate, dignified and personalised care in an appropriate environment. That is why the Government are committed to improving access to high-quality palliative and end-of-life care, and to shifting more care from hospitals into the community and, where appropriate, the home. NHS England requires ICBs to commission appropriate palliative and end-of-life care to meet the needs of their local populations. To support ICBs in that duty, NHS England has published statutory guidance and service specifications.
In addition, we are developing a modern service framework for palliative and end-of-life care, which will be a clinically led, evidence-based framework to support sustained improvement in outcomes for patients and carers, including identifying, measuring and reducing health inequalities, and reducing unwarranted variation in access, experience and outcomes.
We continue to work hard to strengthen community care services and shift care closer to home. As the hon. Lady said, what was promised to her population and the wider ICB area must be delivered. All too often, community health services do not get the attention that they deserve, and staff on the ground do not get the recognition that they deserve. This debate has raised some important questions about how we hold organisations delivering and commissioning services to account.
The hon. Lady asked two questions about comparable data. If anyone has not read the transformation and opportunity packs that I sent all MPs last year about their local systems, I recommend that they do that. I will continue to get information on their local systems to them. The hon. Lady probably knows that we cannot compare like for like, but she should have that information; we are getting it on stream. I am happy to write to her with details of what is or might be made available.
The hon. Lady asked about the CQC. As she knows, it is an independent regulator, but I will ensure we write to her about it. I thank her and other Members who contributed to the debate.
Question put and agreed to.
National Scheme of Delegation of Planning Functions
(1 day, 8 hours ago)
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Wendy Morton (Aldridge-Brownhills) (Con)
I beg to move,
That this House has considered the National Scheme of Delegation of Planning Functions.
It is a pleasure to serve under your chairship, Ms Lewell. From Saturday, councillors across England will lose powers—powers to bring planning applications before elected committees. For communities like mine in Aldridge-Brownhills, which are already facing huge speculative development, this is a serious loss of accountability. My residents have faced an onslaught of applications in relation to green-belt sites, including York’s Bridge for 330 houses, Queslett Road East for 850, Barns Lane for 77, Longwood Lane for 78 and Bosty Lane for 550. Those are just some of them. These applications have brought the debate about the future of our countryside very close to people’s doors. These green spaces help to give our communities their identity. Residents want to know what development will mean for their already busy roads, school places and GP access. They are right to expect those questions to be properly considered before Ministers introduce sweeping changes, yet here we are, just days before the new rules take effect, still looking for answers.
It seems that of the outstanding applications for 2,350 homes across my constituency, 80% will be determined under the new rules and behind closed doors. Residents and councillors will not easily be able to ask questions of the developers or raise issues in open committee. Of course, we agree on the need for homes that local people can afford. I want brownfield sites brought back into use, with supporting infrastructure. As I have said time and again in this place and will probably keep saying, once agricultural land is built on, it is gone, and it is gone forever. I want to see planning consents built, not banked. That brings me to the current consultation on Walsall borough’s local plan.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Lady. I spoke to her beforehand, and I always look to be helpful by talking about what we do back home. In Northern Ireland, under section 31 of the Planning Act (Northern Ireland) 2011, each of our 11 district councils is legally mandated to operate its own bespoke scheme of delegation. Although that gives local authorities excellent democratic autonomy over local developments, it has at times led to the exact regional inconsistencies in application processing times that the new English model explicitly seeks to correct. Does the right hon. Lady agree that the learnings from Northern Ireland’s process should be shared to achieve best practice in planning and hopefully address some of the very issues that she is highlighting?
Wendy Morton
I am always grateful to the hon. Gentleman, because he always makes useful contributions in Westminster Hall that allow us to reflect on and share our different experiences. To me, the fundamental thing is making sure that our communities feel that their councillors have a voice, rather than the democratic deficit that we are faced with. I thank him for his intervention.
Our local plan consultation closes on Monday, and over the last six weeks I have been encouraging residents to respond. I have been holding public meetings, helping with objections and making it clear to them that their views, whatever they are, matter, including when the plan goes before an independent inspector. But what message are the new regulations sending? Residents take the time to go through the documents, attend the meetings and help shape their area’s future, while the Government restrict their councillors’ ability to secure full and public scrutiny when an application arrives. That is not democracy in action—it is neither scrutiny nor accountability—so what is the point of asking communities to invest their time in a local plan if contentious decisions about its application are then to be taken behind closed doors?
Chris Hinchliff (North East Hertfordshire) (Lab)
I suspect I am doing neither the right hon. Lady nor myself any favours by saying I absolutely agree with her. It is our duty as MPs to robustly defend local democracy. Does she agree that, when the communities we represent and their directly elected councillors oppose speculative development, the answer is not to silence their voices but to secure genuine public consent with a higher standard of development that meets local needs and hopes for the future?
Wendy Morton
I can assure the hon. Gentleman that he is not upsetting me with those comments—far from it. His point, that local democracy and local accountability matter, is exactly the one I am making. It is so important that we include local voices, because it is local voices that have local knowledge that can help to shape the community. If we want truly cohesive communities that work together, we need to make sure that their voices are heard—and that they do not have targets and housing imposed upon them.
Several hon. Members rose—
Helen Whately (Faversham and Mid Kent) (Con)
I thank my right hon. Friend for her important speech. Recently, a development in my constituency for 8,500 homes that was due to go to the local planning committee was suddenly taken away from it, having been called in by my constituency neighbour, the hon. Member for Sittingbourne and Sheppey (Kevin McKenna). The decision now sits with the Secretary of State, taking this important decision, which will have a huge impact on the area, out of local hands.
This is clearly denying local democracy, given that we have locally elected councillors who know the impact this development will have on my constituency. Does my right hon. Friend agree that it is completely wrong to take those powers to influence local planning decisions away from local councillors, and that it is absurd that a Government who talk about increasing devolution are the ones taking these powers away from local councillors?
Paul Holmes (Hamble Valley) (Con)
I congratulate my right hon. Friend on securing this debate. She mentioned accountability and democracy. As she knows, the Government are currently taking the Representation of the People Bill through Parliament. The Bill rightly tries to encourage increased participation and accountability in our electoral system. Does she share my concern that the role of councillors is undermined by these planning changes, that local people will lose confidence in the democratic checks and balances of local government, and that we therefore may see turnout and participation go down?
Wendy Morton
My hon. Friend is right. For a long time, it has concerned me that turnout at elections, particularly local elections, has been falling, and I do not believe the answer is simply to lower the voting age. Rather, we should be seeking to engage with people and communities on a cross-party basis. What we are seeing now is a Government who impose top-down targets, say it is all about devolution and go through the mayors, but when it comes to accountability and scrutiny, I cannot scrutinise the Mayor of the West Midlands. He does not even reply to my letters, yet he is getting more powers.
These planning measures come down to local councils, and once again, local councillors are losing their voice—our communities are losing their voices. How can we say that we want to engage with communities? How do we shape the future of our country and our communities if we are taking away transparency and accountability, which are the very foundations of good, strong democracy?
Delegation is a familiar concept. In fact, the Government’s own paper said that officers made 96% of planning decisions in the second quarter of 2024, but that cannot become how every application is determined. Where is the evidence about delays as a result of planning committee call-ins? How much delay arises from waiting for the committee, and how much from staffing shortages, outstanding technical advice or the complexity of the process?
Under the new rules, ordinary applications for up to nine houses on sites smaller than half a hectare must be decided by officers. Larger applications are not guaranteed a hearing either. Referral requires that the nominated officer and the chair of the planning committee agree and that a test of significance is met; if they disagree, the decision stays with officers.
Even reserved matters for a purely residential scheme of several hundred homes can be subject to mandatory delegation, so why exclude councillors from details that materially change the make-up of their own community? A ward councillor will know exactly why a proposal matters locally, but under the new rules they cannot make sure it is heard at committee. It would be helpful if the Minister could outline how the Government will ensure that the significance test is applied consistently. What can a councillor do when a well-founded referral request is rejected? How can it be that an application concerning a protected tree can still be eligible for committee consideration while an application for nine houses can be excluded? What principle explains that distinction? Why should councils be able to consider the future of a single tree—I am not saying that trees are not important—but not the circumstances of a housing development?
We then come to the issue of transparency. Will reasons for refusing to refer an application to committee be published before the application is decided, allowing time to raise an error? Reporting afterwards will give no comfort to concerned residents if permission has already been granted. As the Minister is undoubtedly aware—and I appreciate this topic is not entirely in her brief—some councils are seeking to preserve democratic oversight through informal councillor panels advising on planning applications. What assessment has the Department made of the risk of developers alleging predetermination when councillors express a view through those panels and subsequently participate in the gateway decision or determine the application at committee? Could the resulting legal challenges and delays undermine the very house building targets that the regulations are intended to support? I would be grateful if the Department published clear guidance so that councils can retain meaningful elected involvement without creating further uncertainty.
There is also the question of neighbourhood plans. One council leader told me their council has called for applications that conflict with an adopted neighbourhood plan policy to be eligible for committee consideration. Communities spend years and thousands of pounds preparing these plans before residents endorse them in a referendum. They deserve a route to elected scrutiny when an application conflicts with those policies. Will the Minister provide that safeguard, including for applications otherwise subject to mandatory delegation?
There is a similar concern about houses in multiple occupation, which are used all too often to house those decanted from asylum hotels. Councils introduced article 4 directions because they identified a need for greater control over conversions in particular neighbourhoods, yet applications brought into the planning system by those directions can fall within schedule 1 to the Town and Country Planning (Discharge of Local Planning Authority Functions) (England) Regulations 2026, preventing elected members from determining them. Will the Minister clarify exactly which HMO applications must be delegated, and explain why an article 4 direction provides no exception? Where an application raises significant concerns about the concentration of HMOs, such as about parking or the loss of family housing, will the Government allow councillors to secure a committee hearing?
Let us not forget planning officers. They also deserve protection. They undertake difficult professional work, often with very limited resources. Moving contentious decisions away from committees has a real risk of leaving officers personally exposed. Councils are rightly asking what safeguards will protect officers from undue influence or pressure from developers, applicants and other interested parties. Will there be requirements to record substantive discussions, declare conflicts of interest and obtain a second opinion in contentious cases? What independent route will officers have to report improper pressure? Officers must act impartially, so how will the Minister prevent them from becoming a lightning rod for political criticism when elected council members have lost their decision-making role? The Royal Town Planning Institute has warned of the risk of increased abuse and public pressure. What support will be funded to protect staff and to help councils retain those important experienced planners?
Transparency protects officers and residents alike. People should be able to follow the evidence and understand who decided and why. Accessibility matters, too. Developers often have a planning consultant and a legal team, whereas residents concerned about an application only have the option to open the planning portal for the very first time. They should not need professional help to find out whether an application will reach committee, how to ask for scrutiny or whether their concerns have been considered. Will Ministers engage in a publicity campaign to update people on those changes and ensure that each authority has an easily understandable explanation of the new process on its website, including how residents can put their case where there is no committee meeting?
The Planning Inspectorate also has an important role. An inspector will examine whether the proposed local plan in my constituency meets legal requirements and is sound. Separately, inspectors determine many planning appeals, but how will local evidence about infrastructure and cumulative green-belt loss be considered through these processes? On another point of fairness, or rather the lack of it, applicants can appeal refusals, but objecting residents have no equivalent appeal on planning merits. Given that imbalance, why weaken scrutiny before the decision? What affordable option will residents realistically have if an application is wrongly kept away from the committee?
A separate part of this new scheme requires councils to consult the Secretary of State before refusing applications for 150 or more homes. How will that operate transparently? How can residents make representations? Ministers are creating an additional opportunity for Whitehall interference and involvement while restricting elected local councillors. That undoubtedly creates a democratic deficit. How does that sit with the Prime Minister’s promises on devolution and community empowerment? I do not see how it does. The Local Government Association’s Conservative group has organised a letter from more than 1,500 Conservative councillors calling for this scheme of delegation to be repealed; I put on record my thanks to them for that. Let us hope that the Prime Minister gives it his urgent attention when it is delivered to him at No. 10 tomorrow.
We all know that councils must comply with the law, but we must remember that agreeing to update their constitutions does not mean that they consent to these regulations or believe that they serve their communities. A Government talking about devolution should trust local representatives and communities. I hope that the Minister will reconsider these regulations. At the very least, the Government should restore an effective route to committee for contentious applications to protect neighbourhood plans and article 4 directions and provide clear safeguards for officers.
Before the scheme takes effect on Saturday, will the Minister commit to those changes and to publishing an assessment of the scheme’s impact ahead of the statutory review in 2028? My constituents are being asked to engage with their local plan by Monday. I want to be able to tell them that doing so will make a difference and that their elected councillors will still have a meaningful role when decisions are taken. That is the assurance that I am seeking.
Olly Glover (Didcot and Wantage) (LD)
It is a pleasure to serve under your chairship, Ms Lewell. I thank the right hon. Member for Aldridge-Brownhills (Wendy Morton) for setting out her case so well. As their starting point, the Government need to be clear about what problem and which causes of that problem they are trying to solve. The vast majority of this House would agree that we need more house building, ideally with a particular focus on affordable and social housing, but there are many reasons why we are not hitting the Government’s housing targets, and they should not be lazily reduced to blaming the planning system or planning committees. The solutions that the Government seek to deal with that house building shortage should be based on evidence, not ideology. I fear that sometimes ideology dominates.
Removing local scrutiny in the way that has been described will not address the underlying causes of delay, which include capacity constraints in planning departments and the wider construction supply chain. We need a planning system that is simpler, more effective and capable of delivering homes that are well built, warm and cheap to heat, and that is accountable to local people and their representatives.
In South Oxfordshire and Vale of White Horse district councils, the two district councils that cover my Oxfordshire constituency, the planning committees work well and there is no evidence that they are slowing development down. Some 95% of planning applications are decided by officers already. The majority of applications debated by the planning committees are also passed, but having complex and more contentious planning decisions made in public aids transparency and scrutiny over how planning policies are being applied. Vale of White Horse council has an excellent record on planning appeals: only 4.3% of appeals were allowed over the past two years, demonstrating that the decisions being made under the existing system are working well and are of a high quality.
In my constituency, we have seen huge rates of housing growth over the past 15 years. The key frustration for local people is that the infrastructure has not kept pace. A lot of the time, the local councils are not the ones able to dictate what we need in respect of housing, new railway stations or health infrastructure. Significant infrastructure is not something over which they have direct control.
Reducing the input of local communities and removing the ability of local ward councillors to call planning decisions to a committee could reduce the opportunity for those who understand our communities best to influence the infrastructure that developers provide alongside new homes. Over the past few years, there have been signs that house building is slowing down—the build rate of homes on some of the larger developments in my part of Oxfordshire has slowed—but the Government have misdiagnosed the cause of slower build rates. Planning committees are not the cause; there are wider economic causes and wider system causes. Developers will only build the homes that they are confident of selling. More expensive mortgages and potential buyers not feeling confident about investing in buying a home are significant factors.
I had the pleasure of serving on the Planning and Infrastructure Bill Committee, alongside the hon. Member for Hamble Valley (Paul Holmes), who is in this Chamber. We both have very fond memories of it—a very rewarding and fulfilling experience it was. Indeed, the Conservative spokesperson, the hon. Member for Broxbourne (Lewis Cocking), also served on the Committee. It was on topics such as the one we are debating where there were common amendments among Conservatives, Liberal Democrats and Green party Members. How often does that happen? If I were the Government, I would be very worried about uniting three such different parties.
The wider philosophical problem that we are failing to address as a Parliament and as a country is the tension between national need versus local concern. We need to start approaching that question intelligently. It is yet another debate that has become polarised, with two tribes shouting at each other and not really engaging in dialogue. Maybe we need more Ministers coming to areas affected by significant planning issues—I am not talking about a little cul-de-sac of new houses, but maybe significant infrastructure projects. If Ministers were more willing to come to our constituencies, they could make their case directly and debate and could challenge local opponents.
Wendy Morton
I would be delighted if the Minister came to Aldridge-Brownhills to see the impact that 20,000 homes will have across the borough, where we have a lack of infrastructure. I am still waiting for the funding for Aldridge railway station.
Olly Glover
I was amazed that the right hon. Lady did not mention that station campaign in her opening speech, but she has now rectified that omission. Ministers coming and engaging directly in that way could be part of a campaign of national persuasion to tackle the causes for resentment of development in a given area, but too often that is left to large corporate interests to do, which fuels mistrust. Indeed, in my constituency, the main advocate of what would be the second-biggest reservoir in the country is Thames Water, and of course that really does not help to persuade people of the case. It is one of the major reasons why there is significant local opposition.
As a result, I agree with the right hon. Member for Aldridge-Brownhills and the hon. Member for Hamble Valley that these changes being made by the Government run the risk of further eroding trust in local politics and local democracy. That is in none of our interests.
Paul Holmes (Hamble Valley) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell. I congratulate my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on securing this debate, and I welcome the Minister to her position.
I have serious concerns about this policy and agenda, and specifically about the future ability of residents to have a meaningful say in the development of their own communities. Now that I am no longer the shadow Housing Minister, I am happy that I can speak about these things in a much freer way than I possibly could at the Dispatch Box, although I know that my hon. Friend the Member for Broxbourne (Lewis Cocking) will be absolutely excellent in his winding up. Like the hon. Member for Didcot and Wantage (Olly Glover)—he is my hon. Friend, actually—I have very fond memories of the Planning and Infrastructure Bill Committee. I often found myself going home in the evening and thinking, “How could I have agreed so much with the Liberal Democrats?”, but I looked myself in the mirror, had a wash and got over it the next morning.
Planning decisions shape our towns and villages for generations to come. They determine where new homes are built, how much pressure is placed on roads, schools and healthcare services, and whether the character of our neighbourhoods is preserved. These decisions have real consequences for the people who live with them every day. It is therefore essential that local residents have a meaningful opportunity to influence them.
I say to the Minister that my big concern, which we warned about on the Bill Committee, is that the Government seem ardent on taking those decisions and that influence away from local people. The Government’s proposed approach risks weakening the democratic safeguards that allow communities to have their voices heard. This policy represents a significant shift in the balance between professional planning officers and elected local representatives. One of the most concerning aspects of these reforms is the removal of existing arrangements that allow ward councillors to request committee consideration or that enable an application to be referred automatically when a specified number of objections has been received. Under the new scheme, the volume of objections cannot in itself justify referral to committee. Instead, applications must meet the national criteria, and the nominated officer and nominated councillor must agree that they should be referred.
Let us consider what that means for residents who have legitimate concerns about a development in their neighbourhood. They may organise a petition, write detailed objections and encourage their neighbours to participate in the consultation process, yet the strength of their opposition will not in itself guarantee that elected councillors will debate the application in public. Residents retain the right to submit representations, but their ability to secure community scrutiny is restricted.
That raises a question: what is the point of encouraging people to participate in local planning consultations if the system provides fewer opportunities for their elected representatives to consider their concerns publicly? If we allow this proposal to go ahead on Saturday, as I suspect it will, many people will ask why they should bother voting for their parish, borough or county councillor.
Planning decisions are one of the most public-facing decisions that a councillor makes. Councillors live in their communities. If a housing development is being built round the corner, or if a pub is being closed so that it can be converted into something else, they know what should be referred to their planning committee. That local knowledge is being taken away, so that a faceless officer can make that decision instead. That is not accountable.
Sarah Green (Chesham and Amersham) (LD)
In Buckinghamshire, we do not yet have a local plan. Right now, we are seeing speculative application after speculative application going in. Does the hon. Gentleman agree that removing ward councillors’ right to call those applications in not only undermines accountability, but makes our green belt even more vulnerable?
Paul Holmes
I absolutely agree. Councils are going through a process to develop a local plan. Alongside officers, they will know which applications should be capable of being called in if a local plan is ratified. If there is no local plan and there are small speculative developments happening across a whole constituency, that soon adds up. If the hon. Lady’s councillors are unable to play a massive part in shaping those developments and crafting those developments, it prompts the question: “What do they serve for?” That will be the question resounding across local government this afternoon.
A national framework cannot be expected to capture every local nuance. Although the Government argue that the scheme will create greater consistency and allow committees to focus on significant applications, there is a risk that standardisation will come at the expense of local discretion. The desire for consistency should not prevent councils from responding to the particular needs and concerns of their residents.
Minor delegations do not mean that planning decisions are any less important. Let me give the Minister an example from my constituency. The Pear Tree inn in Boorley Green is owned by a brewery that wanted to sell off a huge amount of the local play area and car park so that six houses could be built. Local councillors were dead against it. It is the only local pub in the area and is a very valued asset to the local community. Under this scheme, that proposal could not be referred by a ward councillor and could not be debated by ward councillors who represent the community. As the Member of Parliament, I could make a written representation but would not be able to go to a planning committee led by councillors to make that decision. That is fundamentally wrong. Under the current legislation, a parish councillor can submit the pub for consideration as an asset of community value. If an officer had been making that decision without a referral by a ward member, they would not have come to the same decision. Eastleigh borough council’s excellent decision to refuse planning permission was made by its ward councillors, who are elected by the people who live there.
I am not against building new homes and nor am I arguing against the expertise of planning officers; I am arguing for development to take place alongside transparency, public participation and democratic accountability. If the Government want communities to support development, they must recognise that people are more likely to have confidence in decisions when they feel their voices have genuinely been heard.
Finally, the Government have spoken hugely, including in today’s Budget, about devolution and empowering local people. The Minister will hear no argument against that from me—I hope her Department brings the mayoral elections for Hampshire forward to 2027. However, she cannot have it both ways; she cannot devolve to local people, while taking away some of the most retail decisions that councils and locally elected people make on behalf of those people—giving with one hand while taking with the other.
That is a topsy-turvy world that will cause the Government huge issues, prompting resentment from local people about the public participation processes they are expected to undertake, particularly with mayoral elections. I appreciate that this is not all in the Minister’s brief, but I seriously ask her to report to the Department the strength of feeling that the Government are creating among locally elected councillors. They are not happy, and nor are we or, more importantly, the people we serve.
Emma Lewell (in the Chair)
If possible, could our final two Back-Bench contributors keep to five minutes each, so that we can hear from the Front Benchers?
Victoria Collins (Harpenden and Berkhamsted) (LD)
It is a pleasure to serve under your chairmanship, Ms Lewell. I congratulate the right hon. Member for Aldridge-Brownhills (Wendy Morton) on securing this important debate.
Moira from Tring asked me:
“How we can take back our democracy which is being eroded at a shocking rate?”—
and, yes, she is talking about planning and about this change. She had read that these planning decisions are being taken from the councillors she has elected. She is absolutely right. First, we had the Conservative Government with their top-down targets, and now we have this Labour Government, who just keep taking power away from local councils and therefore communities.
There have been continual changes to the national planning policy framework, with more than 3,000 drafting changes, all taking power away. The introduction of grey belt has effectively opened our green belt to developers. Ever higher top-down targets mean that, after St Albans had adopted a housing plan, the Government are adding 9,000 more houses. For Dacorum, on the other side of my constituency, there are another 6,000, again after a local plan had just been secured. That is all while we are facing Luton airport expansion and Bedford Universal Studios, which impact infrastructure for local people. And now, from Saturday, this latest regulation means officers must decide householder applications and schemes of up to nine homes. Ward, town and parish councillors will lose the right to call those applications in, as has been reiterated across the Chamber today.
The hon. Member for Hamble Valley (Paul Holmes) eloquently highlighted that the scale and nature of planning applications does not necessarily imply they are not controversial or important; even small things have a massive impact on our communities. Just because they are within scope, that does not mean they do not deserve to be looked at more closely by a committee of democratically elected councillors.
Lib Dem councillors from Dacorum and St Albans are horrified and share Moira’s concerns that their hands will be tied by this regulation and legal challenge, thanks to the Government. In the light of that, Liberal Democrat Dacorum borough council has voted to hold an extra meeting of its development management committee, so that as many called-in applications as possible can be heard before the changes take effect. However, that is no way to run our country or local councils.
What is really needed are long-term changes to planning law that support the voices of local communities, whether Tring, Redbourn, Berkhamsted or Sandridge. All that communities want is to get planning right for the places where they live and to raise legitimate concerns about their everyday lives. They know that we need to build, and they want a say in the homes, buildings and infrastructure that will impact their lives.
As my hon. Friend the Member for Didcot and Wantage (Olly Glover) highlighted—the right hon. Member for Aldridge-Brownhills raised this too—Ministers have given the excuse that this change will speed up house building. In fact, a survey of 62 councils found that more than 200,000 homes with planning permission still have not started, so committees are not the bottleneck. If the Government truly believe in power in every postcode, and if they are going to walk the walk instead of just talk the talk, people will feel it in their planning. That is so vital.
Will the Minister and the Government therefore stop taking powers from local communities and give them back the powers to get their homes and infrastructure right? Will they restore call-in powers for ward, town and parish councillors, and tackle the real problem of unbuilt homes with “use it or lose it” planning permission? Will they also look at wider reforms to bring our communities with us?
Vikki Slade (Mid Dorset and North Poole) (LD)
It is a pleasure to serve with you in the Chair, Ms Lewell. I thank the right hon. Member for Aldridge-Brownhills (Wendy Morton) for securing the debate, which will be so important to people in my constituency.
I have spoken at length about large-scale developments being proposed with insufficient infrastructure and with new homes sitting empty, and I hope the Minister can pass back to the Secretary of State the message that I am still waiting for the meeting she promised me in the Chamber. However, today I want to focus on schedule 1 in the scheme of delegation.
I accept that the vast majority of planning applications are rightly determined by professional officers, but when applications are controversial, when communities have legitimate concerns or when residents simply need confidence that their voices have been heard, planning committees play a vital role. They are there not to frustrate development, but to improve it. They bring together the three important sides of professional advice, local knowledge and public scrutiny, allowing elected representatives to listen to applicants, officers and residents and identify solutions to make development more acceptable to everyone. They are often the best of democracy, and they can be the closest that many of our constituents get to influencing the places where they live.
Recent examples from my area, shared by Lib Dem councillors today, demonstrate that value. One application, which councillors considered today, was refused based on height, density and design, but they were able to debate how the proposal could better fit with the character of the area. In a case last month, members considered the impact on neighbours of three bungalows being squeezed on to a plot for one, and discussed the conditions that might make a future application more acceptable. Both applications were rejected today, and members expect them to come back—but better. That ability to shape development, rather than just approve or reject it, is a crucial part of the process.
Supporters of the changes argue that community engagement should take place through local plans. I understand that, but local plans and planning committees serve different purposes and work to different timelines. As explained by my hon. Friend the Member for Chesham and Amersham (Sarah Green), local plans are often out of date, and when they are rewritten they create a bird’s eye view of a community; they do not see inside the window of a neighbour’s poorly placed extension.
Local plans can allocate land, but they cannot say whether a particular design respects the character of a street, or whether a historic feature, such as the wall in my ward built by Italian prisoners of war, should be retained. That is something that only local councillors and local residents know. With the funding slashed for neighbourhood plans, which the hon. Member for Hamble Valley (Paul Holmes) and I discussed when we were on the English Devolution and Community Empowerment Bill Committee, communities do not even have the opportunity to create new neighbourhood plans to get that much closer position.
I will give another example that was shared with me today. A recommendation for an HMO in Poole was going to be approved. Had there not been local concern, it would not have gone to committee, where a mistake was discovered. The planning officer thought that nine additional properties were going to be created and therefore that housing capacity would be affected, when in fact an HMO does not create nine additional properties. If the case had not gone to a planning committee, that mistake would not have been able to be fixed, because the decision would have been published too late and the community would not have had its say. These people are not blockers; they are trying to make their communities better. While they recognise that a planning officer makes recommendations based on law and policy, they contextualise cases.
Another issue that has not been covered is that many planning applications are now determined from afar. Since covid, we have had planning officers working from Northern Ireland and seeing the sites only on Google Maps. The councillors are the ones who can tell us the context of whether a site is overhanging another, not somebody who has been shipped in on a contract from afar. The Government frequently speak about devolution and empowering communities, but devolution should mean trusting local people and their elected representatives, not reducing their involvement in decisions that affect the places where they live.
One Dorset resident today put it to me far better than I could:
“If a community is going to feel that it’s been completely shafted by a decision, there should at least be a meaningful opportunity to secure measures that address its concerns and help rebuild trust in the process.”
That is ultimately what planning committees provide: trust, transparency and democratic legitimacy. By removing that layer of local decision making, we may make some decisions faster, but we risk weakening public confidence in the planning system itself.
John Milne (Horsham) (LD)
It is a pleasure to serve under your chairship, Ms Lewell. I congratulate the right hon. Member for Aldridge-Brownhills (Wendy Morton) on securing the debate.
The Liberal Democrats are deeply concerned by the introduction of a national scheme of delegation, which gives the Secretary of State sweeping powers and allows planning decisions to bypass local planning committees. We opposed this approach throughout the passage of the Planning and Infrastructure Act 2025 and sought to protect the existing powers of committees. Faster planning decisions should come from having properly resourced planning departments and giving councils the freedom to set planning fees that truly reflect the cost of their job—not by shutting communities out of decisions about their local areas.
On Saturday, a national scheme of delegation will come into force. Every council in England must rewrite its constitution to match it, and none has been given a say on whether to do so. As many Members have said, planning is where most people first meet democracy, and it is one of the most important reasons why they vote for a councillor in the first place.
Household applications, minor commercial applications, schemes of up to nine homes and a range of technical decisions must now go to officers. For other applications, a committee can step in only where it raises a significant issue and an officer and nominated member agree; a councillor cannot refer an application alone. The ward member’s call-in has gone, and so has the route by which enough objections would bring an application to committee. Nine houses next to someone’s home are not a minor matter, and councillors will still be blamed for it. When something is built that nobody wants, residents will ask their councillor why, and the honest answer will be that they had no control over it whatever.
The Government’s case is that committees slow things down, but the reality is that this country does not have a big permissions problem in the first place; councillors already approve nine in 10 applications.
Paul Holmes
The hon. Member will know, as the hon. Member for Didcot and Wantage (Olly Glover) said, that a cross-party delegation of Liberal Democrats, Conservatives and Greens on the Planning and Infrastructure Bill Committee came up with sensible amendments to try to make sure there was a balance between efficiency in the planning system and the criteria under which officers could make more decisions, and still involving local councillors. Can the hon. Member elaborate on where the balance should be between councillors and planning officers?
John Milne
I very much agree, and I will come on to that.
Removing local scrutiny, as this scheme does, touches none of the problems I have mentioned. Where delay is real, it lies in planning departments running with about 80% of the staff they need, one in five major applications being decided on time, and fees that the Government accept do not cover the cost of the work. The Liberal Democrats made that point throughout the passage of the Planning and Infrastructure Act. My hon. Friend the Member for Taunton and Wellington (Gideon Amos) tabled 78 amendments in Committee and more than 50 on Report, including some to try to protect planning committees. Unfortunately, the Government accepted none of those amendments.
The Government have decided that residents are just a nuisance to be overcome. Through these measures, which come on top of years of reduced neighbourhood control, they have killed one bird with a thousand stones. It is not as if local people had much say over things beforehand. The Liberal Democrats regret the lack of any attempt to build consent. This is just storing up problems and resentment for the future, as Members have said.
I ask the Minister: will the Government let a ward member bring an application to committee on behalf of residents as the locally elected official? Will they look again at the standard method—the flawed formula—that sets local targets? Will they commit to telling us in plain terms whether this change is doing what it is supposed to by 2028 at the latest? Finally, national fees are planned at an estimated 90% cost recovery. Will the Government commit to full cost recovery so that planning departments are properly resourced? We need to rediscover the principle of consent.
Lewis Cocking (Broxbourne) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell, and to take part in this debate about the national scheme of delegation. I thank my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) for securing this important debate. I know that my right hon. Friend always fights to protect the green belt in her constituency.
I was sitting here reflecting on what Members have said, and I do not think that there is much that I disagree with. I know that a number of Members from across the Chamber were on the Planning and Infrastructure Bill Committee, and it took me back to some of the arguments we thrashed out during those debates.
When I speak to constituents right across Broxbourne, planning is one of the biggest issues that comes up, door after door, election after election. We know from hearing the accounts from Members from across the House today that that is also the case elsewhere across the United Kingdom—right from Aldridge-Brownhills to Hamble Valley, to name a few. The Government would love for everyone to think that local councillors are the main barrier to house building. They want to move to a system where new applications all over the green belt are rubber-stamped by officials instead. The truth of the matter, as has already been said, is that the vast majority of planning decisions are already made by officers—as many as 96%, according to the Government’s own figures.
The national scheme of delegation will not magically fix the Secretary of State’s failure to build the 1.5 million new homes that she promised. What these measures will do is undermine local government and expand the state even more. Unfortunately, we see it time and time again. The same developer comes along with a plan that is entirely inappropriate for the local area. Perhaps there are vague promises for a school or a park that we know will never get built. The local community then makes its view very clear that it does not want to see the plans happen. Even when the council’s planning committee votes against them, it gets overruled by the Planning Inspectorate as it decides that some bit of land is grey rather than green belt—often, as has already been said, without even visiting the site. That is just not right.
The Labour Government are forcing massive new housing developments on areas such as Goffs Oak in my constituency, while reducing targets in London to cover up Sadiq Khan’s failings. This is at the same time that we have a Prime Minister going on and on about devolution and how local leaders are the ones best placed to make local decisions. That is so inconsistent.
Wendy Morton
On that point about local leaders making decisions and showing leadership, does my hon. Friend agree that it is important that we actually see that? In areas such as Walsall, what we do not see from the new leadership there—the Reform council—is strong leadership on this. One area that needs more pushback is the duty to co-operate with other areas. In our area, Birmingham’s housing target has gone down and ours has gone up. There are some towns and cities in neighbouring counties that actually want more housing and have more brownfield sites.
Lewis Cocking
I completely agree with my right hon. Friend. She is right to mention the duty to co-operate. Local leaders must step up to the plate. That is what they are elected to do, and that is what their residents expect.
Residents expect their local councillors to represent them, not to hide behind the duty to co-operate. They must co-operate across borders. They do not need powers taken away from them and given to unaccountable bureaucrats in distant council headquarters. Under the national scheme of delegation, proposals for under 10 properties will only be looked at by planning officers. This means that only in very limited circumstances will there be a way for local councillors to bring those decisions before a planning committee. Planning officers are not elected and are not accountable to voters.
Everyone knows that sometimes planning officers get things wrong and the decisions need to be overturned. I have seen it. I have served on a planning committee and the trouble is that, once a planning application gets approval and gets built, it is there for a very long time. It is very difficult to rectify it once it goes wrong. Do the Government really think that unelected officials are better placed to make decisions on local issues than elected councillors? People vote for their councillors to represent them on planning issues and can hold their councillors accountable at the ballot box. However, it is not just planning that is at stake, but trust in politics as a whole. Removing powers from elected representatives is an attack on British democracy, and the British people can see right through it.
Local action groups such as Goffs Oak Community Association are already fighting tooth and nail to stop their towns and villages being wrecked by inappropriate developments, which are often proposed without any sort of adequate infrastructure. The Government clearly do not care about their views, otherwise they would not be bringing in this national scheme of delegation. These changes also ignore the fact that planning committees are not just there to approve or deny applications. Councillors talk with local people and can address their concerns by putting conditions on development.
Paul Holmes
My hon. Friend makes a good point. Another concern of mine is that, when looking at infrastructure such as healthcare facilities or larger-scale road networks, local councillors and MPs quite often work together to secure the funding from central Government and maybe a county council. Does he share my concern that in some of the larger schemes that will be decided by planning officers, the ability to get that multi-layered approach to funding will not be there, because there will not be the political will to do it?
Lewis Cocking
My hon. Friend is absolutely right. If local people—including local councillors with input from the local community and MPs—do not have a say over planning applications, development will not come forward with the appropriate infrastructure. That is what our constituents right across the country expect. I am pleased to say that my party has firmly stood against these proposals from the start. If the Minister really wants to deliver on the Government’s promise to devolve power to every postcode across the United Kingdom, she will stop this attack on local democracy and bin this scheme once and for all.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Sally Jameson)
It is a pleasure to serve under your chairship, Ms Lewell. As hon. Members have identified, I am not the Minister for Housing. He is in another Committee as we speak, but I am pleased to respond on behalf of the Government and I will make sure that the strength of feeling and the questions that have been raised today are fed back.
Wendy Morton
I can assure the Minister that I will not persistently intervene. But on her last point, can she reassure me that if she is unable to answer questions that were asked today—I appreciate that this is not in her portfolio—she will ensure that the Minister for Housing and Planning responds to Members in this Chamber and the public in writing before the regulations come into force on Saturday? It is absolutely critical that Members here, and councillors across the country, fully understand their implications.
Sally Jameson
I will ensure that that request is fed back to the Minister for Housing, as well as the strength of feeling behind it. I thank the right hon. Member for Aldridge-Brownhills (Wendy Morton) for securing today’s important debate, as well as hon. Members for their contributions on the subject.
The modernisation of planning committees, as many will know, is a big part of the housing and infrastructure delivery that the Government intend. Our reforms are about creating a level playing field across the country to give certainty to communities and developers about the process their applications will follow. We recognise the vital role that planning committees play in providing local democratic oversight for important development decisions in their area. Our reforms were a key measure in the Planning and Infrastructure Act 2025 and are intended to support planning committees in this crucial role so that they can be effective as possible.
Paul Holmes
I thank the Minister for giving way and I will not intervene on her any further. She talks about giving people certainty, but this Government could have created certainty by standardising the planning system in favour of councillors making the decisions that they were sent to local councils to make. Does she agree that the reason the Government have not done that is because they have made a political decision to take that power away?
Sally Jameson
I do not agree with that. Extensive consultation was done around this policy before it was brought in—in fact, I believe there were three rounds of consultation.
The national scheme of delegation, which will come into force this Sunday, will allow committees to focus on the larger and more complex development proposals that really require member input. The applications that matter most to communities are those that will deliver the kind of development that local people desperately want to see. We also want to ensure that skilled planning officers in councils are trusted and empowered to make decisions on more applications more quickly to ensure that development is brought forward in the right place at the right time.
The national scheme of delegation will mean that officers will spend less time and resource preparing for committee meetings for smaller applications, speeding up decision-making processes more broadly and freeing up time to focus on larger and more complex applications. It will also provide greater clarity and consistency across the country about who in a local planning authority will determine applications. Irrespective of whether a decision is made by an officer or a planning committee, the important thing is that both are working to serve the interests of their community.
I want to thank the hon. Member for Didcot and Wantage (Olly Glover), who praised his council’s record on planning, and I hear the concerns he has raised. As I have said, I will make sure that they are fed back.
Lewis Cocking
I did not want to interrupt the Minister’s flow, but she said that planning officers are there to serve their community. Could she explain what the community can do if it is not happy with the decisions that the planning officer makes?
Sally Jameson
I will come to that later in my speech, but I will canter through, as I am conscious of time. During the many consultations and parliamentary debates on the planning committee reforms, the Government have been clear that they are not in any way intended to be an attack on local democracy. We recognise that councillors and communities are central to deciding what development is right for their area, but the Government believe that the best way for them to do that is at the beginning of the process, when the local plan is being developed.
The national scheme of delegation will support the plan-led system. It will allow planning committees to operate as effectively as possible. For example, they will not need to revisit the same decisions that have already been considered through the local plan process; instead, they will be able to focus on those applications that really require member input. I must also stress that decision makers, whether they are members or officers, must determine applications in accordance with the local plan unless other material considerations indicate otherwise. Having an up-to-date local plan will have the biggest bearing on the outcome of a robust decision.
Importantly, we are not changing the consultation rules on planning applications. Local residents and elected councillors will still be able to make their views known on individual applications. Regardless of who the decision maker is, where those representations relate to the planning merits of the development, they will continue to be taken into account in reaching decisions.
On transparency and reporting, it is clearly important that local communities know about decisions that are being made on their behalf. That includes decisions on the referral of schedule 2 applications to the committee. We have set out requirements for that in the statutory guidance to which local authorities must have regard. As a minimum, we expect local authorities to keep a record of the cases that the nominated officer and nominated member have considered for referral to committee, the outcome of their consideration and the reasons for their decision. That should be reported to the planning committee on a regular basis and made available on the authority’s website.
A couple of points were made on HMOs. A strong local plan, particularly featuring HMOs, should be able to guide planning officers, but I will ask the Minister for Housing and Planning to write to hon. Members who raised that and provide further information. I will also feed back about websites and the council advertising campaign.
On devolution and powers of strategic authorities, I am, as it happens, the Minister responsible for the devolution strategy and the rewiring the state plan. We will set that out later this year as part of the Government’s 10-year plan. Hon. Members will see that this Government are serious about putting power back in communities. Part of that is having a strengthened local government system. I can give an example: in my own strategic authority, we announced this week that we will reopen Doncaster Sheffield airport, which will have a massive impact on the local community for jobs and growth. That is a prime example of how rewiring the state can bring the power and prosperity mentioned by Members today.
On mandatory training for members, the Government’s priority has been getting the national scheme of delegation in place. Now that that is complete, we will resume work on member training. Further stakeholder engagement is needed on how we will make that a credible and cost-effective system. I know that the Minister for Housing and Planning will work with local government and hon. Members to ensure that that is robust.
On the approach to the size of the committees, planning committees need to be the right size to inform decision making. There have been examples of sprawling committees having unruly debates and not getting anywhere. The intention behind introducing the cap was to ensure that they are more focused and of better quality. I think that initially, the planning committees were going to have 11 members, but that has been increased to 13, as a number of political parties are represented in some councils. That changed as a direct feedback from consultation.
On the national scheme of delegation, it is something new. We recognise the need to ensure that it works on the ground as intended. That is why, following the consultation on the draft regulations earlier this year, we inserted a further provision into the regulations to require that they are reviewed within two years of coming into force. That will give an opportunity to monitor the implementation of the regulations. I will feed back the request that that be looked at before the two-year mark to the Minister for Housing and Planning and ask him to come back on that, even if it is with some kind of interim or informal assessment of how that has been going.
Once again, I am grateful to the right hon. Member for Aldridge-Brownhills for securing this debate and for the contributions from other colleagues on this important issue. I recognise that not all questions may have been answered, but I will ensure that the Minister for Housing and Planning comes back to hon. Members where I have not had the time to do so. I close by reiterating that the reforms to planning committees, including the national scheme of delegation, are intended to support, not undermine, committees. We want them to be as effective as they possibly can be, so that they serve the best interests of our communities.
Emma Lewell (in the Chair)
I call Wendy Morton to sum up, if you can do it in a few seconds.
Wendy Morton
I thank all Members across the House for their contributions. It is clear that there is a lot of cross-party support, but it is noticeable that some of those who protesteth about saving the green belt—namely, our Reform colleagues—are nowhere to be seen in Westminster Hall. I know who is fighting for residents and standing up to protect the green belt.
Written Corrections
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Ministerial Correction
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Health and Social Care
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Dr Caroline Johnson
Another issue that affects continuity of care is when patients remain in the emergency department for prolonged periods after a decision is made to admit them to a ward. That has gone up by over a third since the general election. Can the Government say why?
Dame Diana Johnson
Times in A&E are being speeded up. The hon. Lady speaks with experience because she is a clinician, and I am happy to go away and look at that issue and write to her if there is information we need to let her have. My understanding is that we are speeding things up in A&E, and getting people through and on to the ward as quickly as possible.
[Official Report, 20 October 2026; Vol. 791, c. 955.]
Written correction submitted by the Minister for Public Health and Patient Safety, the right hon. Member for Kingston upon Hull North and Cottingham (Dame Diana Johnson):
Dame Diana Johnson
The hon. Lady speaks with experience because she is a clinician, and I am happy to go away and look at that issue and write to her if there is information we need to let her have. My understanding is that we are getting people through A&E and on to the ward as quickly as possible.
Written Statements
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Social Security update
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The Chief Secretary to the Treasury (Emma Reynolds)
The Tax Credits Act 2002 and the Social Security Administration Act 1992 place a statutory duty on His Majesty’s Treasury to review the rates of tax credits and child benefit each year in line with the general level of prices. There is a further statutory duty on the Treasury to increase guardian’s allowance in line with price growth. I have now concluded the review for the tax year 2027-28.
I have decided to increase child benefit rates in line with the consumer price index for the year to September 2026, which is 3.5%. Guardian’s allowance will also increase by the same rate. This means that, from 12 April 2027:
the child benefit rate for the eldest child will increase from £27.05 to £28.00 per week;
the child benefit rate for other children will increase from £17.90 to £18.55 per week;
guardian’s allowance will increase from £22.95 to £23.75 per week.
I have determined that there will be no need for changes to tax credits rates in the tax year 2027-28, as there are no tax credits awards after 5 April 2025.
The new rates will apply across the United Kingdom. I will deposit the full list of these rates in the Library of each House shortly.
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Data Centres: Responsible Water and Energy Use
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The Minister of State, Department for Environment, Food and Rural Affairs (Emma Hardy)
Today, along with the Minister for Artificial Intelligence, my right hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), and the Minister for Energy, my hon. Friend the Member for Rutherglen (Michael Shanks), I wish to update the House on the Government’s approach to supporting the sustainable growth of data centres while protecting England’s water resources and helping to maintain a secure, affordable and flexible electricity system.
This statement is part of the Government’s package to deliver responsible data centre growth that backs investment and delivers for host communities. The package combines immediate action with longer-term reform. It aims to strengthen national resilience and support UK supply chains, skills and jobs, while unlocking investment and capacity to underpin AI-driven growth and productivity, built around four expectations: to protect bill payers; to put communities and their resources first; to reindustrialise Britain; and to strengthen UK sovereignty.
Data centres are critical national infrastructure that underpin almost all economic activity and enable the digital services that people and businesses rely on every day, from NHS patient records and banking platforms to communications and entertainment. In the water sector, they will improve how water mains, sewers and treatment plants are managed, enabling water companies to identify and address problems before failures occur. They will play an increasingly important role in national security, resilience and sovereign capability as well as delivering the Government’s ambitions for economic growth, world-leading scientific research, artificial intelligence and improved public services.
The impact of data centres on energy and water systems
As the sector grows, it is important that development takes place in a way that is environmentally sustainable and resilient to future pressures on both water resources and energy systems. Co-ordinated planning is therefore required to ensure that future demand can be met sustainably, while supporting the UK’s long-term water and energy resilience.
Data centres already require substantial electricity supplies, with current UK demand estimated at around 2 GW. Future requirements remain uncertain but could increase significantly as demand for compute and AI grows. Large, continuous and geographically concentrated demand can require additional generation and network infrastructure and create pressures on network capacity, system operability and security of supply. Greater energy efficiency, and flexibility in when, where and how energy is used, can help to manage these impacts and support a more efficient and resilient electricity system.
Evidence gathered by the Government and stakeholders suggests that current data centre water use remains a relatively small proportion of overall non-household consumption—estimated as less than 0.2% of the non-household sector in England—and that many facilities across England already use highly water-efficient cooling technologies. However, rates of potential future growth of the sector, particularly in areas already experiencing water stress that are more adversely affected during hotter periods, mean that greater action on controlling water use is crucial. Increased transparency and information sharing by the data centre sector on long-term planning and water use will be increasingly important. Water companies do not have to supply data centres with water, and therefore early engagement from data centre developers is essential.
Energy and water use are closely linked. Data centre cooling can involve trade-offs between the two: some technologies can reduce energy consumption but increase water demand. Decisions on cooling should therefore reflect local water availability, energy efficiency and broader environmental considerations, rather than considering either resource in isolation.
Improving transparency
The Government recognise the importance of robust and transparent data in planning for sustainable data centre growth, particularly given increasing public scrutiny, concerns from local communities, and heightened media interest in the sector. Greater visibility of water and energy will support water companies, regional planning groups, electricity network and system operators, regulators and the Government to understand future demand and ensure that long-term infrastructure and resource planning keeps pace with investment and development.
To improve transparency across the sector, we strongly encourage all data centre operators to publish and share with the Government annual reporting on environmental metrics, including water use and energy performance. Data centre operators should disclose total and peak water use, together with their water usage effectiveness. On energy, these disclosures should include power usage effectiveness, energy reuse factor, and an appropriate organisational carbon disclosure. Reporting should also cover the site’s technical capability to provide electricity system flexibility and its participation in flexibility services, whether directly or through a third party.
We will work with industry and regulators to develop consistent definitions and proportionate arrangements for the scope, verification and publication of this reporting. We expect the sector to provide this information voluntarily. However, if sufficient data is not provided, we will immediately consider whether a statutory reporting framework is required to ensure appropriate transparency and accountability.
Water and heat reuse
The Government ask developers to adopt a water use hierarchy for data centre development. Demand reduction and alternative water supplies have the potential to reduce pressure on drinking water resources and the environment while supporting continued investment in digital infrastructure. The water use hierarchy asks developers to:
Minimise water demand through water-efficient design, the provision of on-site water storage, operational optimisation, and the use of waterless or water-efficient cooling technologies.
Utilise recycled water once all reasonable demand-management options have been exhausted. Identify the most appropriate recycled source, starting with simpler and more sustainable options, such as rainwater harvesting, before moving to more complex sources, such as water reuse and treated waste water where these are environmentally appropriate and economically viable.
Only where demand management and recycled sources have been fully assessed and it is clear they cannot reasonably meet operational requirements should reliance on additional fresh water from the public water supply or environment be considered.
The Government will continue to explore and consider innovative solutions to demand management and use of alternative water sources. Treated waste water could provide a valuable alternative source of water for data centres and other contained industrial uses, particularly where it can reduce demand on drinking water supplies in water-stressed areas. We will work with water companies, developers and other relevant bodies to explore suitable projects that can demonstrate how treated waste water can be used safely and effectively for cooling and other non-potable applications. The Government and regulators are currently working together to clarify the regulatory pathways and identify practical opportunities for safe and sustainable reuse. This includes considering proportionate approaches for suitable lower-risk schemes, while ensuring that risks to the environment and public health are properly understood and managed.
Decisions on cooling should also assess the interaction between water and energy use so that reductions in one resource do not create disproportionate impacts on the other.
Data centre developers should consider opportunities to make productive use of waste heat. For new developments and material expansions, developers should undertake a heat reuse feasibility assessment, considering the proximity of potential users or networks, and the technical and practical requirements for connection. The findings should inform site design and identify whether a deliverable heat off-take arrangement is feasible. Where reuse is not pursued, the assessment should clearly explain why it is not deliverable.
Environmental resilience and sustainable growth
The Government encourage data centre developers and operators to take a strategic approach to understanding and managing their environmental dependencies, impacts and resource demands, helping to ensure that future growth supports long-term resilience and sustainable outcomes.
To do this, we ask data centre developers and operators to undertake location-specific assessments of their impacts and dependencies on nature and the energy system, and encourage both, where appropriate, to use the taskforce on nature-related financial disclosures’ LEAP approach: locate, evaluate, assess and prepare.
We expect data centre developers to carefully consider anticipated water demand and efficiency, the availability of water resources, and waste water disposal within the relevant catchment. Assessment should be developed in consultation with the relevant water company, taking account of its water resources management plan and drainage and waste water management plan. The findings should inform decisions about site location and cooling technology. We expect that, by securing their own resilience, in the face of water scarcity, data centres will pave the way for future policy considering how other business and public users can maximise the value of their water.
We expect assessments to also consider the site’s expected electricity demand, peak load, energy efficiency, opportunities for demand flexibility, and the feasibility of recovering and reusing waste heat. These considerations should inform site design and early engagement with electricity network operators, local authorities and potential heat users.
We also encourage collaboration to identify opportunities that can strengthen water resilience and deliver wider environmental benefits. This includes exploring opportunities to support catchment-scale initiatives, and encouraging data centres to assess opportunities for co-location with complementary infrastructure to maximise the recovery and beneficial use of waste water and waste heat. Sites that incorporate environmental and drainage and waste water co-benefits—for example rain water management, sustainable drainage systems and tree planting features—are strongly encouraged. Planning applications should demonstrate that opportunities to connect waste heat to local heat networks, or the reuse of waste water within nearby industrial, energy and utility systems, have been considered.
Sustainable growth of the data centre sector and environmental stewardship must go hand in hand. By encouraging efficient use of water and energy, promoting the use of appropriate alternative water sources, improving transparency and supporting better long-term planning, the Government can enable continued investment in this strategically important sector while protecting water resources and supporting a secure and resilient electricity system.
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High Streets Strategy
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The Secretary of State for Housing, Communities and Local Government (Angela Rayner)
Thriving high streets are central to our national life. They bring communities together, provide essential services, support culture and heritage, and drive employment and local growth. Yet the economic model high streets have relied on has been disrupted by changing consumer habits, competition from online and out-of-town alternatives, and declining investment in the public realm—in the face of which many of these local assets have declined.
For many people, the neglect of the high street and the struggle many have faced to adapt to changing economic tides is a visible sign of a wider loss of control and pride in where they live. The replacement of banks, pubs, and shops with vape shops or vacancies is a powerful symbol of lost control and diminished pride.
But this decline is not inevitable—and if we are to restore hope and confidence across the country, there is no better place to start than our high streets.
That is why today the Government have laid in both Houses and published “Hope on the High Street”, our new high streets strategy, which can be found at https://www.gov.uk/government/publications/hope-on-the-high-street
Our plan is to put high streets back under local control, backing local leaders to drive the change their community wants to see. Every town and city centre is its own unique ecosystem shaped by where it is and who it is for. We will not try and fix everything from Westminster. Instead, we are backing councils, mayors and communities with new powers and investment—and tackling the cost of doing business.
We believe that the job of this Government is to support local leaders to build the high street their community wants. The strategy sets out the six pillars of a successful high street:
Active leadership and management; reasons to have confidence
Strong businesses, anchors and amenities; reasons to visit
Vibrant culture, leisure and entertainment; reasons to stay
Easy access and connectivity; reasons to explore
Safe, clean and welcoming; reasons to return
A place to call home; reasons to move in
Taken together, they can increase footfall and spending, reduce vacancies, strengthen business resilience and productivity, attract investment, and build confidence among residents, businesses and investors.
The strategy recognises the vital importance of improving the conditions for businesses to set up and grow on the high street. The Government are providing an extra 20% relief for pubs, social clubs and all but the very largest live music venues in England from 1 April 2027. This is in addition to the support introduced earlier this year, bringing the total relief to 35%.
Today’s Budget confirms further steps to back retail, hospitality and leisure businesses of all sizes, many of which had been facing significant business rates bill increases. The decisions set out in the Budget mean that RHL businesses in England will see their business rates either frozen in real terms, reduced, or cut to zero, while ensuring that half of all RHL properties in England will not pay business rates at all from 1 April 2027.
The Budget also confirms we will remove business rates reliefs from vape shops and adult gaming centres, to better target those reliefs at businesses that support thriving high streets. From April 2027, vape shops and adult gaming centres in England will no longer be eligible for the RHL multipliers, and vape shops will also lose eligibility for small business rates relief. This builds on the steps we have announced to end the requirement for licensing authorities to “aim to permit” gambling premises, and our proposals to require new vape shops to obtain planning permission, giving councils and communities a greater say over where they are located. A new model design code will also support councils to impose higher-quality, more consistent design standards for shopfronts.
The strategy also supports high streets to adapt, bringing vacant premises back into productive use and encouraging a greater mix of activities in town centres.
Our £210 million community assets programme will provide practical investment to tackle vacancy and dereliction, protect valued community assets, support co-operative development and strengthen local capacity to renew high streets. This funding is available within England.
The package comprises four complementary funding streams:
£125 million derelict buildings fund to help 60 local authorities bring prominent vacant and derelict high street buildings back into productive use.
£65 million to help communities acquire and protect valued local assets, from pubs to local sports facilities, aided by new community right to buy powers. Funding will be open to applications across England.
£10 million for high street rental auctions to help councils accelerate and expand their use of the powers and bring persistently vacant commercial premises back into use. Funding will be open to applications across England.
£10 million regional co-operative development programme to help strategic authorities grow their co-operative economies and support community-owned businesses.
More detail on this funding can be found at https://www.gov.uk/government/collections/community-assets-programme
To accelerate adaptation, the Government will empower local authorities to better take on business rates avoidance by expanding the funding provided for the costs of challenging avoidance in courts; and introducing a general anti-avoidance rule, giving local authorities the powers they need to better take on non-compliance.
The strategy also expands the role that public services and workplaces can play in successful high streets, through a new “high streets first” principle. This will encourage public bodies to consider the wider benefits their estate decisions can bring to high streets and local growth, making better use of the public estate as a strategic asset that enables placemaking and regeneration. This principle is backed by a number of policies, including local asset management plans co-designed with mayoral strategic authorities, place-based business cases to align investment around a shared vision for places, and a greater say for mayors in significant estates decisions.
The strategy also sets out measures that the Government will explore to create stronger conditions for growth in town centres, including the possibility of community enterprise zones as a vehicle for high street renewal, and hospitality or vibrancy zones to support to bring town centres to life outside of core retail hours. We will also explore how licensing can better support economic growth, including considering putting the national licensing policy framework for the hospitality and leisure sectors on a statutory footing.
The Government also recognise the significance of crime and organised crime as crucial factors in deterring people from visiting high streets, and undermining the viability of high street businesses. The strategy sets out how the Government are acting to deliver on existing commitments to crack down on these threats, including through a £30 million national crackdown on organised crime and stronger powers to close premises linked to criminality.
This strategy sets a clear direction of travel for high streets, but it is not the end of our work. We will continue to work across Government and with local leaders, businesses and communities to identify where further action is needed. We will use the forthcoming “rewiring the state” delivery plan and future fiscal events to consider where additional powers, funding or reforms are needed to help places deliver lasting change. The new place regeneration taskforce, part of the Office for the Prime Minister and the Cabinet, will continue to champion an ambitious approach to high street regeneration as part of its work.
The state of our town and city centres says so much about us, who we are as a country, and whether we are on the right path. We need to get them booming again, so that people can see that our best days are ahead of us. The Government have every faith that the future can be so much brighter than anything before us and that, together, we can bring back hope again.
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State Pension and Benefit Rates 2027-28: Statutory Review
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The Secretary of State for Work and Pensions (Pat McFadden)
I have concluded my statutory annual review of state pension and benefit rates under the Social Security Administration Act 1992. The new rates will apply in the tax year 2027-28 and will mainly come into effect from 12 April 2027.
I am pleased to announce that the basic and full rate of the new state pensions will be increased by 3.9%, in line with the increase in average weekly earnings in the year to May-July 2026.
This delivers on our triple lock commitment throughout this Parliament to increase these rates in line with the highest of growth in prices, growth in earnings or 2.5%. From April, the full annual rate of the new state pension will increase by around £490. The full annual rate of the basic state pension will increase by around £375.
The standard minimum guarantee in pension credit will also increase by 3.9% in line with the increase in average weekly earnings. From April, it will be £247.30 a week for a single pensioner and £377.40 a week for a couple, ensuring the incomes of the poorest pensioners are protected.
Other state pension and benefit rates covered by my statutory review will be increased by 3.5%, in line with the increase in the consumer prices index in the year to September 2026.
This includes most working-age benefits and other benefits for people below state pension age; benefits to help with additional needs arising from disability; statutory payments including statutory sick pay and statutory maternity pay; and additional state pension. The pension credit savings credit maximum amount will also increase by 3.5%.
The Universal Credit Act 2025 removed the standard allowance and health elements of universal credit, as well as their employment and support allowance equivalents, from my review. The Act delivered important changes to rebalance universal credit to tackle perverse incentives in the system. The UC standard allowance for a single person aged 25 or over will increase by around £219 a year. That is over £45 more than if uprated by inflation alone. For couples, where one member is aged 25 or over, it will increase by around an additional £344 a year. That is approximately £71 more than if uprated by inflation alone. These changes narrow the gap between the standard rate of universal credit and the health-related element, helping to strengthen incentives to move into and progress in work.
The majority of these increases will apply across Great Britain, except for personal independence payment and other benefits to help with additional needs arising from disability, and the rate of carer’s allowance, which will only apply to England and Wales. In Scotland, these are devolved matters.
All social security, including state pensions, is a transferred matter in Northern Ireland.
While not part of my formal uprating review, I can confirm that local housing allowance rates and the benefit cap will be maintained at their current levels and not increased for 2027-28.
I will place the full list of proposed state pension and benefit rates for 2027-28 in the Library of each House and on www.gov.uk in due course.
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