Oral Answers to Questions

Alan Mak Excerpts

Tuesday 20th December 2022 Commons Chamber

[Victoria Atkins]

I do hope that the hon. Gentleman noted the announcements by my right hon. Friend the Chancellor in the autumn statement in relation to dividends and corporation tax allowances. We want to ensure, where we can, that unearned income is roughly comparable to earned income. That is precisely why the principle running through the autumn statement was that those with the broadest shoulders should bear the greatest burden.

[Alan Mak (Havant) (Con)]

I welcome the Edinburgh reforms, which help to make our financial services sector more competitive. I urge my hon. Friend to adopt the same approach to R&D tax reliefs and capital allowances, so that our world-class entrepreneurs, start-ups and small and medium-sized enterprises can benefit from the same advantages.

Independent Brewers: Small Brewers Relief

Alan Mak Excerpts

Tuesday 6th September 2022 Commons Chamber

[The Exchequer Secretary to the Treasury (Alan Mak)]

I begin by congratulating the hon. Member for Midlothian (Owen Thompson) on securing the debate and commending him for his ongoing advocacy on behalf of the brewers and distillers from his constituency. I join him in congratulating the organisers of the 20th anniversary celebration he mentioned. As he said, he has some notable examples of beer and gin producers in Midlothian. I understand that brewing in Scotland dates back to the neolithic period—truly some very small brewers indeed.

As the Member for Havant, I too am proud of the brewing heritage in my constituency. In fact, the combination of a thriving local malt trade and fine spring water meant that beer was a mainstay of Havant’s local economy for centuries. Although it is many years since the final kegs rolled out of our last active brewery, that legacy is still visible in some of our town’s buildings.

Let me also thank the other hon. Members who have taken the time to contribute to this debate, and who represent all four nations of the United Kingdom, which reflects the appeal and significance of our first-rate alcohol industry. I particularly recognise the contribution of my predecessor, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who played a key role in initiating the review.

Before I address the various points raised today, I will briefly explain the wider reforms, the rationale for them and why they are important. The key point is that the Government are making changes to outdated alcohol tax laws—laws that are arbitrary and inconsistent. Crucially, the result of these reforms will be a system that is much fairer, simpler and more aligned with public health goals than the system we inherited from our membership of the European Union. EU law contains many inconsistencies and barriers to simplification, including, for instance, preventing member states from taxing all types of drink in proportion to their alcohol content.

In contrast, the Government’s proposed reforms, as set out in last year’s autumn Budget, radically simplify the system and tax all products in proportion to their alcohol content, which ensures that higher-strength products pay proportionately more duty. We are also introducing new reliefs to support pubs and help small producers to expand and thrive. The Government remain committed to delivering alcohol duty reform. We are considering the feedback that we have received and we will respond in the coming months.

Put simply, the reform of alcohol tax laws is long overdue. These laws have barely changed since the 1990s, partly because the incoherent and prohibitive EU rules that we experienced in the past have hindered that much-needed change. In the current system, for instance, a high-strength white cider pays less duty per unit than a low-strength beer. Sparkling wine—a sector in which the UK is starting to lead the world—pays much more duty per unit than still wine, even when it contains substantially less alcohol. Fortified wines, which are made with the addition of spirits, pay less duty than a liqueur made with spirits, even if they are the same strength.

The plain fact is that we inherited 15 rates from the EU across five different products with three different methods of taxation. As such, the current system is complex and archaic. In fact, the Institute of Economic Affairs think-tank has said that it “defies common sense”. For their part, producers, importers and exporters in this country have called the system “distorted” and

“perversely incentivised to produce stronger drinks”.

They have welcomed the opportunity for reform.

Now that we have left the EU, we have an opportunity to create alcohol laws that are more rational, and that support the many and varied producers and traders in this country. At the autumn Budget last year, the then Chancellor laid out the significant benefits we planned to introduce with our reforms, which include a radically simplified system that slashes the number of bands from 15 to six and taxes all products in proportion to their alcohol content; taxing all products in the same way, which is a rational policy that was banned by EU law; ending the premium rates on sparkling wine and equalising them with still wine, and substantially reducing duty on rosé; introducing new rates for low-strength drinks below 3.5%, which will encourage innovation and reflect consumer preferences for low or no alcohol drink alternatives; and cutting duty on a 3.4% beer by 25p a pint.

We are also modernising the taxation of cider, targeting unhealthy and problematic white ciders while cutting the duty for lower ABV, craft and sparkling ciders; freezing duty rates for the third Budget running, saving consumers £3 billion over the coming years; and, of particular interest to Members tonight, we have introduced small producer relief, supporting the many small artisan alcohol producers who continue to create world-beating products in this country.

The hon. Member for Midlothian asked about the possible behaviour and role of global producers and the cost of reducing the rate for beer below 3.5% ABV. The Government’s intention is to encourage reformulation and innovation in lower-strength products, including by larger brewers, and this proposal received broad support from the sector during the call for evidence. The costs of these alcohol duty reforms were published at autumn Budget 2021, and they took account of the impacts of reformulation between bands. A tax information and impact note will be published alongside the draft legislation in the usual way.

The hon. Gentleman mentioned that, since 2002, small brewers relief has provided reduced rates of beer duty for small producers. The rapid and successful growth in the sector since that relief was introduced has undoubtedly contributed to the diversity and quality of beers on the market. This is good for producers and good for consumers. However, we must also recognise that responses to the technical consultation the Government ran on SBR pointed to flaws in the system. Some called it “too generous”, going beyond the relative cost disadvantage experienced by small producers. Others called it “distortive” and “flawed”. Alongside our other generational reforms, we have the opportunity to improve on the positives of SBR and extend those benefits to other industries.

While no final decisions have been taken, the new relief we announced at the Budget includes expanding the relief across all categories, allowing small producers to diversify their product range to other products below 8.5% ABV, while still benefiting from reduced rates; introducing a more progressive taper, removing the cliff edges from the previous scheme, which the hon. Gentleman mentioned; expanding the scheme to products below 2.9%, encouraging innovation in the growing low or no alcohol market and in turn helping consumers make healthier choices while still supporting our outstanding alcohol industry; and, let us not forget, introducing draught relief, a move that directly supports the great British pub with reduced duty rates on draught beer and cider so that consumers can enjoy the fantastic products made by our small producers in their favourite local.

The hon. Gentleman mentioned, and the point was reinforced by my hon. Friend the Member for Aberconwy (Robin Millar), the issue of container size, and the fact that small independent brewers and community pubs often use 20 and 30-litre containers for their beer. I want to assure them both and the wider alcohol community that, while I cannot make any announcements tonight, we have listened and we understand their point.

The hon. Member for Midlothian also raised the issue of help for the sector as it recovers from covid-19. While the final design of the alcohol duty reforms will be confirmed shortly, I want to reassure him that the Government recognise the pressures facing the sector. I remind him that the Government have already introduced a range of measures that continue to provide significant support for businesses, including cutting business rates by 50% for eligible retail, hospitality and leisure businesses in this financial year. He asked about support for energy costs, and as he will have heard from the Prime Minister this afternoon, announcements will be made this week and in the coming weeks, so I reassure him that he can look out for those.

The hon. Gentleman also asked whether the full SBR rate will be maintained at the new lower rate, whether total production across all alcoholic products will be used to calculate the SPR and whether the SPR will be launched at the same time as the other alcohol duty changes. I reassure him that the Government recognise the success that SBR has brought to the industry, and we look forward to seeing the benefits shared with other sectors. While I cannot make any announcements tonight, I hope he understands that the Government are carefully considering the feedback stakeholders shared with us through the consultation and we will publish our response shortly.

The benefits I outlined earlier would not have been available to this country before we left the EU. The reality is that we have a once-in-a-generation opportunity to improve an outdated system, providing new incentives for producers to grow and innovate and a major boost for pubs. Our reforms are more rational, fairer, better aligned to public health goals and more in tune with consumer preferences, and they support the Great British pub and the small producers delivering fantastic world-class products.

Let me again thank the hon. Member for Midlothian and all hon. Members across the House who have contributed to this evening’s debate. I also wish to assure them that we will soon confirm the details of these wider reforms and publish the draft legislation, alongside the Government’s response to the consultation.

If, indeed, we have been brewing alcohol on these islands for thousands of years I see no reason why we should not continue, with even greater success, for thousands more. Given a chance, I am sure those neolithic producers of beer would have enjoyed the benefits afforded by small brewers relief, and they would almost certainly have welcomed the opportunity to expand their operation with the reformed small producer relief.

Question put and agreed to.

Approved Mileage Allowance Payments

Alan Mak Excerpts

Monday 5th September 2022 Written Statements

[The Exchequer Secretary to the Treasury (Alan Mak)]

The Government have become aware of a technical inaccuracy in its responses to a number of parliamentary questions, correspondence and a parliamentary e-petition response on the subject of approved mileage allowance payments (AMAP) from March to August 2022.

The response stated that actual expenditure in relation to business mileage could be reimbursed free of income tax and national insurance contributions. This is in fact only possible for volunteer drivers. Where an employer reimburses more than the AMAP rate, income tax and national insurance are due on the difference. The AMAP rate exists to reduce the administrative burden on employers.

The guidance available on gov.uk has been correct throughout and the Government believe that the number of taxpayers who could be affected is very small.

HMRC is also taking steps to bring this inaccuracy to the attention of employers and employees where necessary. Should any cases arise HMRC will work on an individual basis aiming to ensure that any taxpayers who relied on incorrect information are not disadvantaged.

[HCWS280]

Simon Hinchley-Robson: Discharge from the RAF

Alan Mak Excerpts

Monday 10th January 2022 Commons Chamber

[The Lord Commissioner of Her Majesty's Treasury (Alan Mak)]

Let me begin by associating myself with the tributes from Mr Speaker and many others to Jack Dromey. He will be missed across the House, and I send my condolences to the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and the rest of Jack’s family.

I congratulate the hon. Member for Eltham (Clive Efford) on securing an important debate on an important issue. I know that he is a long-standing and formidable advocate for the LGBT+ community in his constituency, and the issue that we are discussing tonight clearly has broader implications for the way in which Defence treats its people. That, however, should in no way diminish the harrowing experiences of Mr Hinchley-Robson in the 1980s. I have no wish to defend that behaviour. It was plainly appalling. It was inexcusable, it was wrong, and it unfairly tainted a promising career. It is certainly to Mr Hinchley-Robson’s great credit that despite receiving that treatment, he has been able to go on and serve his community with distinction, as he once served his country.

I want to address the issue of compensation from the outset. As the hon. Gentleman noted, at the time of Mr Hinchley-Robson’s service in the RAF, section 10 of the Crown Proceedings Act 1947, which barred members in Her Majesty’s forces from pursuing common law claims for compensation against the Ministry of Defence, was in force. As the hon. Gentleman also noted, section 10 was subsequently repealed by the Crown Proceedings (Armed Forces) Act 1987, but that was not made retrospective.

However, in 1999 the European Court of Human Rights concluded that the MOD had discriminated against service personnel in relation to sexuality as a protected characteristic. That led to the Court directing the MOD to provide a remedy for those who were affected, with most pay and pensions claims being settled by 2008. As regards new claims for compensation, the MOD would always advise that independent legal advice be sought. When common law claims are received, they are considered on the basis of whether or not the MOD has a legal liability to pay compensation. When there is a proven legal liability, compensation is paid.

We should not forget that, shocking though Mr Hinchley- Robson’s case is, it is historical. The MOD of 2022 is a very different entity from its 1980s incarnation. Mr Hinchley-Robson was discharged from service in line with the policy in place at the time. That unjust and retrograde policy was rightfully changed on 12 January 2000, and the RAF, in line with the other services, now has a range of policies and processes to ensure that such unlawful discrimination is eliminated.

[Clive Efford]

I did point out in my speech that those regulations were in place at the time, and they have been quoted to me in previous correspondence with Ministers. What I am also highlighting, however, is the physical abuse that Mr Robson suffered at the hands of the Special Investigation Branch, which went way beyond just applying the rules and regulations that existed at that time. Surely the Government have some responsibility to him as a consequence of that behaviour.

[Alan Mak]

I have seen the correspondence to which the hon. Gentleman has referred, and I am aware of the allegations that have been made. They are very serious, and, as I said earlier, my advice is for Mr Hinchley-Robson to make a formal claim to which the MOD will respond.



In 2012, power was conferred on the Home Secretary to formally disregard certain convictions for specified repealed homosexual offences and, in 2017, automatic pardons were introduced for individuals who had had their convictions disregarded, as well as posthumous pardons for those who had died before the provisions came into force. I am proud to say that, at the start of this year, the Government unveiled plans to expand those powers so that more veterans could benefit. Amendments to the Police, Crime, Sentencing and Courts Bill will enable individuals who have been convicted of same-sex activity under any offences that have now been repealed or abolished to apply to the Home Secretary to have those convictions disregarded. The scheme is also being extended to all general disciplinary offences that were used to prosecute men and women for same-sex activity.

At the turn of this decade, 20 years after military personnel were allowed to serve as openly lesbian, gay or bisexual, the MOD main building was lit with rainbow colours and both the RAF and the Army were listed among Stonewall’s top 100 employers. In February last year, we began returning medals to veterans who had been forced to forfeit them for reasons connected to their sexuality. And, last November, I was proud to see our LGBT+ military and civilian personnel marching with pride in the Remembrance parade. Today we have a thriving LGBT+ network in the MOD, and all serving personnel and veterans can access a range of support mechanisms, from the 24/7 anti-bullying and harassment helpline to the Veterans’ Gateway.

The fact that things have changed out of all recognition does not mean we are complacent. On the contrary, reports such as those released by Air Chief Marshal Wigston in 2019 and by the House of Commons Defence Committee last year act as constant reminders to keep doing more to ensure that all armed forces personnel can thrive. That is why the MOD’s leadership, from the Secretary of State for Defence down, has been crystal clear in stressing that there is a zero-tolerance policy on unacceptable behaviour or discrimination of any kind within the organisation. Today, all personnel are encouraged to call out such bad behaviour, whether they are a victim or a witness. They will never be penalised for doing so. I also want to reassure the hon. Member that our upcoming veterans’ strategy action plan will include further steps designed to address past wrongs.

Today we are looking to build a force fit for the future, but we will not succeed if we exclude parts of our community. Nor can we claim the moral high ground as a proud defender of global freedom, tolerance and justice if we fail to show the same regard for our own people. Yet our desire to make the MOD a more diverse, more inclusive and more welcoming place has less to do with operational imperatives and much more to do with a fundamental respect for human dignity. Every individual, no matter their sexuality, their gender, their colour, their race or their religion, deserves to be treated with consideration. This commitment to diversity and inclusion is one that I take personally and seriously, as the first ever Member of Parliament of British Chinese heritage and the first ever Government Minister of British Chinese heritage to speak at the Dispatch Box.

We should be especially proud of those courageous individuals who are prepared to stand up and, if necessary, lay their lives on the line for their country. Individuals such as these are the best of us—individuals such as Mr Hinchley-Robson. The fact he and others within the LGBT+ community faced discrimination in the not-too-distant past remains a cause of shame and huge regret, but it is now incumbent on us to use this case as a powerful reminder that such shocking incidents must never happen again.

Question put and agreed to.

Finance (No. 2) Bill (Third sitting)

Alan Mak Excerpts

Committee stage
Wednesday 5th January 2022 Public Bill Committees

[The Chair]

I am waiting for the Whip. If the Whip wishes to move the adjournment, I will call Richard Holden first when we come back after the break.

[The Lord Commissioner of Her Majesty's Treasury (Alan Mak)]

What would you prefer, Chair?

[Mr Holden]

I will be really quick.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 11th February 2020 Commons Chamber

[Jesse Norman]

The hon. Lady is quite wrong. We accepted all but one of Sir Amyas’s recommendations, and we did not accept that one because the issue he raised was already being handled very well within the system. If the hon. Lady has a specific concern, she is very welcome to raise it with tax commissioners or, indeed, with me, although on an anonymised basis because obviously I cannot deal with specifics.

[Alan Mak (Havant) (Con)]

16. What steps he is taking to improve UK productivity.

[The Chancellor of the Exchequer (Sajid Javid)]

You ain’t no Deputy, Mr Speaker!

Increasing productivity is the best way to boost wages and improve living standards. We have worked hard to build a stronger, fairer economy, dealing with the deficit, helping people into work, and cutting taxes for families and businesses.

[Alan Mak]

The link between investment in research and development and increased productivity is well recognised. What steps is my right hon. Friend taking to encourage more private sector investment in R&D to help Britain become a leader in the fourth industrial revolution?

[Sajid Javid]

I thank my hon. Friend for all the work that he has done to put the UK at the forefront of the fourth industrial revolution. He is right to raise the importance of research and development. We are committed to investing an additional £7 billion in R&D by 2021-22 —the largest increase in 40 years—and, as my hon. Friend will know, in our manifesto we committed ourselves to going even further.

Finance (No. 3) Bill

Alan Mak Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[Alan Mak (Havant) (Con)]

It is a pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman).

I welcome the Bill, which implements a Budget that helps individuals and families in my constituency and across the whole country to keep more of the money they earn and helps the businesses in my constituency and across the rest of the UK to invest and grow. This is a Budget that secures the public finances and helps us to repair the damage caused by the Labour party. More importantly, it helps us to prepare for the challenges ahead. As the fourth industrial revolution accelerates, it is important that we help our start-ups and our scale-ups and our engineers, innovators and entrepreneurs. This Budget does all those things.

Ultimately, this Budget will improve our productivity, so that as we leave the European Union, this country is fit for the future and in the best possible position to seize the opportunities presented by new technologies, new industries and new sectors and to support the entrepreneurs who create so much of the wealth that drives our growth and funds our public services.

This Budget builds on the financial and economic stability that we have built over the past eight years. It is a Budget that builds on rising wages, rising employment, a growing jobs market and the rising productivity that has allowed this country to maintain its top 10 position in the World Economic Forum’s competitiveness index. It is a Budget that allows us to seize on our strengths and improve our productivity as we leave the European Union.

This Budget contains measures that will help individual taxpayers in my Havant constituency. It increases the personal allowance to £12,500, allowing us to meet an important manifesto commitment one year early. It raises the higher rate threshold to £50,000, which helps not only the entrepreneurs and small business owners who are prevalent in my constituency but many of our senior public servants to keep more of the money they earn and have more disposable income, so that they can make choices for their families and their own future. That is important to Government Members at least, so despite the pressure in our public services, I welcome the tax cuts in this Budget.

[Alan Brown]

The hon. Gentleman mentions entrepreneurs. He will be aware that universal credit ends after one year for self-employed people. Can he tell me how that helps entrepreneurs?

[Alan Mak]

In 2017, we had a record number of start-ups in this country, with 660,000 new businesses, up from just under 600,000 in 2015. This Budget, along with the package of measures being introduced, helps entrepreneurs across the piece. I look forward to more entrepreneurs starting their own business in this country, as I and other Members have done across the country. The work allowance measure helps those who want to get off benefits and into work, and I welcome it.

[James Cartlidge (South Suffolk) (Con)]

My hon. Friend is making an excellent point. Does he agree that the whole point about being an entrepreneur is not to be reliant on benefits, but to invest in a business, grow it and succeed, so that people can stand on their own two feet and support others, including those they employ?

--- Later in debate ---

[Alan Mak]

My hon. Friend makes a characteristically powerful point. I know that he is an entrepreneur who has started his own business, as I have.

Measures such as the cut to corporation tax will make our country even more competitive. When we started cutting corporation tax in 2010, we embarked on a journey that will allow this country to become one of the most competitive in the G20, with the lowest possible rate of corporation tax. I welcome that measure.

[Karen Lee]

When the hon. Gentleman says, “despite the pressure in our public services,” does that mean he thinks it is acceptable that we have lost 21,000 police staff and so many nurses and that people wait in ambulances outside A&E for four hours or more? Is that acceptable?

[Alan Mak]

I thank the hon. Lady for her intervention. I actually said that it was despite the pressures on our public finances, rather than our public services. We have to get the balance right between cutting taxes for our hard-working taxpayers and investing in our public services. She will know that the Government have announced an increase of £20 billion a year for our NHS—a step that I welcome—but we can only invest that money in our NHS and our public services if we are creating the wealth in the first place. It is the measures in the Budget, including those that cut corporation tax, that will allow us to generate that wealth. It is the measures we have implemented since 2010 that allow us to cut corporation tax.

[Leo Docherty]

Does my hon. Friend agree that the slashing by one third of business rates for small businesses, which are the backbone of our economy, is further good news for business and is to be welcomed?

[Alan Mak]

I welcome my hon. Friend’s intervention. He is absolutely right that small businesses in his Aldershot constituency and in my constituency are the backbone of our economy. We want more of those small businesses. That is why we had a record number of start-ups in 2017, which I very much welcome.

The changes to corporation tax in the Budget will increase the take-up of entrepreneurship, increase entrepreneurs’ ability to start a business and ensure that the marginal rate on them is much lower. We will have the lowest rate of corporation tax in the G20, and we will maintain that ultra-competitive edge as we leave the European Union. The OECD’s evidence suggests that the more we cut corporation tax, the higher the rate of revenue we get for our economy. This is a welcome step that will turbo-charge our economy as we leave the European Union.

Finally, Havant is known for its engineering and manufacturing prowess. Manufacturers such as Dunham-Bush, Lewmar and Kenwood export from Havant to countries all around the world. The reforms to the capital allowance rate and the increase in the annual investment allowance will allow them to buy the machinery, plants and technology they need to expand and grow. I welcome the Bill, because this Budget helps taxpayers to keep more of the money they earn, it helps our businesses to grow and it prepares our country to seize the opportunities of the new technologies of the future.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 6th November 2018 Commons Chamber

[Mr Hammond]

The hon. Gentleman might have been too busy preparing his question for today and in the process have missed the industrial energy efficiency fund that we have committed to introduce.

[Alan Mak (Havant) (Con)]

10. What fiscal steps he is taking to provide funding for skills and training.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

By 2019-20, we will be spending £2.5 billion on apprenticeships in England every year through the apprenticeship levy. In this Budget, we have given employers more flexibility to deploy it as they see best.

[Alan Mak]

Greater investment in STEM—science, technology, engineering and maths—skills is key to boosting employment in our growing digital economy. What support can the Chief Secretary give to ensure more training is available to our next generation of scientists, engineers and tech entrepreneurs?

[Elizabeth Truss]

My hon. Friend is right. We know that people with STEM skills have higher earnings. That is why we put more money into the maths premium last year to encourage more students to study that subject from 16 to 18. This year, we have launched a new programme to enable the better retention of maths and physics teachers in our schools.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Robert Jenrick]

The Infrastructure and Projects Authority, which has conducted the most rigorous analysis of Government spending on infrastructure, has made clear that the north of England will receive more funds from the present Government than any other region in the United Kingdom, including London and the south-east.

[Alan Mak (Havant) (Con)]

8. What fiscal steps he is taking to support firms harnessing new technologies.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

The Government are committed to helping firms to harness the benefits of new technologies, and we are taking action to do so. For example, we have set the annual investment allowance at £200,000 a year, its highest-ever permanent level; we have announced a 10-year action plan to unlock more than £20 billion to finance growth in innovative firms; and we have delivered the biggest increase in research and development investment in 40 years.

[Alan Mak]

Britain is becoming a world leader in technology businesses at the cutting edge of the fourth industrial revolution. Will my right hon. Friend ensure that our tax system remains competitive, to maximise the support that we give to our business entrepreneurs?

[Mr Hammond]

Yes. I congratulate my hon. Friend on his commitment in this regard, especially in his role as chairman of the all-party parliamentary group on the fourth industrial revolution. Science, research and innovation are areas in which the UK has huge strengths. Our challenge is to provide the right environment—including the right tax environment—to ensure that that potential stays in the UK, and is developed here. We have introduced a range of incentives through the tax system, such as R&D tax credits and entrepreneurs’ relief, as well as the lowest corporation tax rate in the G7.

Economies of the UK Islands

Alan Mak Excerpts

Wednesday 9th May 2018 Westminster Hall

[Alan Mak (Havant) (Con)]

I beg to move,

That this House has considered the economies of the UK islands.

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank the Speaker’s Office for granting this debate, the Minister for coming to respond and all right hon. and hon. Members for joining me. In particular, I thank my hon. Friend the Member for Isle of Wight (Mr Seely) for the important role he has played in instigating and securing this debate, and in launching the all-party parliamentary group for UK islands, of which I am proud to be a founding member.

Island geography has played a pivotal role in shaping Britain’s history, and has contributed to the culture, society, institutions and economy that we enjoy today. Similarly, the smaller islands that are part of the UK also have their unique history, communities and economic structures, stemming from their own geography. Nearly every aspect of life on these islands, including their economies, is impacted on in some way by their geography. The debate is about showcasing and celebrating the economic strengths of our islands, highlighting the challenges they face and exploring how central and local government can help our islands get fit for the future. We are all islanders in one form or another and we should work together to protect and enhance these extraordinary communities and their economies.

Within my constituency, Havant, I have the honour of representing more than 17,000 residents on Hayling Island, one of Britain’s most successful inhabited islands. The island has a fascinating history dating back to the iron age, stretching through the 11th century, the salt production industry and serving as a location for a mock invasion in preparation for the D-day landings. As important as Hayling’s remarkable past are the exciting possibilities for its economic future. Northney, West Town, Eastoke, Sea Front and Mengham all boast an array of strong, independent businesses. Some of these are small, such as the Hayling Island Bookshop, reputed to be the smallest independent bookshop in Britain. It was a finalist in the parliamentary best small shops awards. There are others, such as Bentley Walker, which started life as an electrical goods shop and has now diversified into a provider of satellite-based internet technologies, serving customers around the world. Others, such as Northney Ice Cream, the Coastguard Café and the Seaside Florist, are family-owned. All of these Hayling businesses and others have their own character. While owners and employers are always eager to help the local community, they also give the island its distinctive welcoming character and a strong sense of community, engendering a strong sense of loyalty among local residents.

That warmth has made Hayling a great place to visit and helped it to build a strong visitor economy. The tourism industry is worth more than £160 million to the Havant and Hayling area each year. Hayling’s beaches are award-winning; the three main beaches of the island have won both the European blue flag and the Keep Britain Tidy group’s seaside award flag for cleanliness and management. Eastoke Corner beach has been awarded a blue flag for more than two decades, attracting visitors from each of the three busy holiday parks across the island, which are also key employers.

Beyond the beaches, the island’s sailing clubs also bring in visitors who enjoy our natural environment. The annual Virgin kitesurfing festival also attracts thousands of water sports enthusiasts from around the world. The island’s remarkably low crime rate makes it a safe place for business to start and grow. The coastal and semi-rural nature of the island lends itself to the establishment of new businesses set up by local entrepreneurs such as John Geden, who established Sinah Common Honey. Each jar of honey is said to derive from nectar from more than 1 million flowers. Hayling’s rich rural environment provides a sustainable, natural dimension to Hayling’s economy. As of March 2018, only 115 of Hayling’s 17,573 residents were claiming unemployment benefits of any kind—just 1.2% of the population, compared with the English average of 2.1%.

Although Hayling’s unique geography is a source of economic strength and community spirit, the island and others around the UK also face unique challenges. There is a consistent need on Hayling Island and other islands across the UK to work harder to create sustainable and attractive employment opportunities for our residents, especially younger residents and school leavers. Any dip in opportunities for younger generations carries with it potentially destabilising knock-on effects for our wider economy. A brain drain, even a temporary one, can mean that our local businesses struggle to hire workers. The 2011 census indicated that there were 4,060 people living on Hayling Island who worked elsewhere, out of a working population of 9,934. Just under half our working residents commute off the island via a single road bridge most days of the week.

It is absolutely crucial that we equip all our islanders, especially our young people, with the skills to succeed in the economy of today and that of the future. I therefore welcome the fact that four of Hayling’s schools, Mill Rythe Infant School, Mengham Infant and Junior Schools and Hayling College are rated as good by Ofsted, with Mill Rythe Junior School rated as outstanding. As with many coastal communities, however, we still have pockets of deprivation and underachievement that hold back our economic potential and productivity.

Although schools across the whole Havant constituency, including Hayling Island, receive higher than the national average in per-pupil funding, I believe that the Government’s new national funding formula can do more to help pupils who suffer from the most extreme forms of deprivation, particularly in coastal communities. I have met the Minister for School Standards and the new Secretary of State for Education on several occasions to lobby them on this issue. I hope the Exchequer Secretary shares my desire to ensure that every young islander gets the best start in life, so that they can contribute effectively to our economy in the future.

The other challenge our island economy faces is the over-exposure of our business community to changes in the island’s service infrastructure. We live in an age of digitisation, as I have emphasised in my other work in this House on the economic opportunities of the fourth industrial revolution. As online banking increases, footfall in local banks will inevitably fall. This has led to the closure of Mengham’s NatWest and Barclays branches on Hayling, and I am sure other hon. Members face similar situations in their constituencies.

Although residents on the mainland can mitigate the closures by driving to a nearby branch that remains open, Hayling only had one branch of each main bank. In recent years, closures have forced many residents to travel to the mainland using the single road with increasing regularity. I am aware that this has been touched on and tackled elsewhere through the access to banking protocol, the Griggs review and the access to banking standard, and is ultimately a commercial decision beyond the Government’s control, but I want to raise it to emphasise the heightened sensitivity of the economies of the UK’s islands to changes in the economic infrastructure—they impact on us severely.

Public transport is key to a vibrant economy within an island as large as Hayling—transport between the island and the mainland, and in neighbouring areas, such as Portsmouth. Any diminution in service has a disproportionate impact on island communities for residents and visitors alike, especially on islands such as Hayling, which are both coastal and semi-rural. The Hayling ferry, for example, is a valued community resource that also helps the island economically. The ferry’s owners and operators are putting together a business plan to make it commercially viable in the long term, working with local councillors—something I support. I hope that my hon. Friend the Minister will join me in wishing them every success as they seek to secure a long-term solution to ensure that we have a positive local impact from the ferry. Road infrastructure is equally vital. High-quality road networks are important, particularly as new housing is proposed on Hayling Island to meet local demands. Digital, structural and economic services are vital to the economic wellbeing of our island.

We live in a world of unparalleled opportunity thanks to technological innovation and a host of businesses are now footloose thanks to the advent of the internet and online shopping. On Hayling Island, 96.9% of premises can receive superfast broadband, set against a UK average of 93.5%. We are fortunate to be close to the mainland with a strong digital infrastructure, but I know that many islands are not so fortunate. With services such as banking increasingly moving online, fast download speeds are essential. That should be an area in which the Government can support island communities.

I commend the Government’s efforts to date to support island communities. In 2011, the Government established the coastal communities fund and since then, four funding rounds have been completed, awarding a combined total of £173 million. Only 9% of that funding, however, has been awarded to projects based on islands, and 70% of that has been allocated to islands in Scotland. I do not begrudge any of the funds that have gone to those recipients. Instead, I seek to highlight our collective and continued need for sustained development and support for the UK’s islands, including Hayling Island.

In March 2015, the then Department for Communities and Local Government established coastal community teams in order to encourage,

“sustainable economic development and regeneration in coastal towns.”

Each of the 146 coastal community teams that have been established were awarded £10,000, yet only three were exclusively based on islands. I am delighted that one, the South Hayling Island coastal community team, was based on Hayling Island.

Although the coastal communities fund was established with the aim of providing funding to create sustainable economic growth and jobs, it has become largely project-focused rather than addressing the structural, systemic and strategic challenges faced by UK islands. Consequently, I hope the Minister and the Government will consider expanding or complementing the coastal communities fund so that it can provide stronger strategic and structural support to the economies of UK islands. The reformed fund would be exclusively available to island communities, such as Hayling Island, to apply for.

[Mr Bob Seely (Isle of Wight) (Con)]

I thank my hon. Friend for securing the debate. I strongly support the proposal, and I am glad that he is raising it with the Minister, because one of the problems is that islands are sometimes too small for the Treasury to be interested in as economic enterprise zones, which we need on the Isle of Wight and in the Medina valley specifically. With an enlarged coastal communities fund, perhaps one that looked specifically at driving economic regeneration, relatively small sums of money could make a great deal of difference and would go down very well.

[Alan Mak]

I thank my hon. Friend for that sound intervention and again for his role in securing the debate. I entirely agree with his points. As I was saying, a reformed coastal communities fund would be incredibly important to coastal communities such as Hayling Island and his constituency. It would be exclusively available to island communities to apply for to help them to meet the specific and unique challenges they face as a result of their specific and unique geography. As I mentioned in my opening remarks, those challenges include an oversensitivity to changes in local infrastructure, expensive or sometimes congested transport connections to the mainland, a skills gap and a need to support local, independent businesses, all of which could hamper economic growth if not addressed.

In conclusion, we are all islanders. Britain and its satellite islands are a beacon to the world of how innovative, welcoming and economically successful islands can be. After all, the UK is one of the largest and most successful island economies in the world. However, to make our island economies sustainable and resilient, on Hayling Island and beyond, we must help to tackle the systemic and structural challenges they face. I hope that central and local government will play their part. By doing this, we can ensure that islanders across the UK enjoy the bright economic future they deserve, and that they not only are fit for the future, but get to the future first.

--- Later in debate ---

[Alan Mak]

We have had a very good and wide-ranging debate. I thank all right hon. and hon. Members for contributing. The right hon. Member for Orkney and Shetland (Mr Carmichael) was right to highlight the opportunities and strengths of islands in addition to the challenges. In an excellent speech, my hon. Friend the Member for Isle of Wight (Mr Seely) emphasised what special and unique places our islands are. My hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) gave us an excellent perspective from Scotland, and I commend him for his service as a fire officer on Argyll and Bute.

I thank the Minister for his thoughtful response and his commitments, on behalf of the Government, to increase productivity and living standards on all the islands of the United Kingdom, including Hayling Island. I would very much welcome his visiting my constituency. I thank both Opposition spokespeople for their responses, the hon. Member for North Ayrshire and Arran (Patricia Gibson) in particular. She, too, is welcome on Hayling Island anytime. Thank you, Mr Rosindell, for chairing the debate.

To conclude, we are all islanders and must all work together to ensure that all the islands of the United Kingdom, whether large or small, have a bright economic future. I am glad that the House, through this debate, has committed to ensuring just that.

Question put and agreed to.

Resolved,

That this House has considered the economies of the UK islands.

[Andrew Rosindell (in the Chair)]

Order. The sitting is suspended for three minutes to allow broadcasting to switch their feeds to facilitate simultaneous transmission.