Commons Chamber
Wednesday 1 July 2026
The House met at half past Eleven o’clock
Prayers
[Mr Speaker in the Chair]
The Secretary of State was asked—
Keeping people safe online at moments of real danger is a top priority for this Government. That is why we have asked Ofcom to expedite its work on updates to its codes of practice under the Online Safety Act 2023. All services face strict duties to deal with illegal content. Of course, it is right that platforms with a greater risk of viral content spreading must do even more to prepare for and manage periods of heightened risk.
The limits in the Online Safety Act only cover misinformation that meets the threshold for illegal content. The riots in Epsom and Ewell highlighted a need for a clear crisis protocol, because false information was viewed over 2 million times and it was trending on X two days after that information had been clarified by the police. Will the Minister commit to directing Ofcom to establish a single set of mandatory crisis response standards for platforms so that we have clear accountability and rapid action following such incidents?
Do we want tougher accountability? Absolutely. That is why the codes published mean stronger review mechanisms, a direct line to law enforcement and a clear crisis playbook required of risky platforms. Do we want it to be faster? Absolutely. That is exactly why we have asked Ofcom to expedite those codes in particular. On whether we take a risk based or uniform approach, it is right that we focus our resources, in law enforcement and regulatory action, on those that are the greatest risk. We will continue to review that.
I call the Chair of the Science, Innovation and Technology Committee.
It is almost exactly a year since my Select Committee published its report on “Social media, misinformation and harmful algorithms” in the wake of the Southport riots. It was truly distressing and disturbing to see misinformation playing such a role in the Belfast riots, and my thoughts are with all those affected. Will the Minister confirm what conversations he has had with Ofcom about misinformation being included in its crisis response protocol, as recommended by my Committee?
May I, as ever, thank the Chair of the Select Committee for such a depth of expertise and experience, and in particular for the report that she mentioned, which has formed the basis of a lot of our thinking? There are clear things that we have done in our engagement with Ofcom, such as ensuring we empower users, not least through the commitments made in the “Protecting What Matters” social cohesion strategy, which will follow up on a number of recommendations that the hon. Lady talked about, including empowering users of algorithms. Misinformation is very much under consideration, and I have spoken to Ofcom about categories of harm as part of the crisis playbooks. We will continue to review that.
Last month, I announced a defining moment for children and families, banning social media companies from providing their services to under-16s, banning livestreaming and stranger communication for under-16s on services, including gaming, and making Britain the first country in the world to ban sexualised chatbots for under-18s. This Government, and I personally, will continue to take all the measures necessary to keep children safe online.
During the Government’s consultation on online safety, I met students from Ysgol Maes Garmon in my constituency to hear about their lived experience online. They raised concerns about harmful online content, addictive algorithms and the impact of a lack of scrolling limits. Will the Secretary of State assure me that the voices of our young people are heard in any decisions about how to keep them safe online?
I pay tribute to the work that my hon. Friend has done on these issues. Young people’s voices have been, and will continue to be, heard. We had 14,000 children and young people respond to our consultation and they raised issues such as the ones mentioned by my hon. Friend. We want to give children the best possible start in life. There are further measures that I hope to announce, including on breaks in infinite scrolling, and I look forward to making a further statement to the House.
People across Glasgow East welcome the proposed ban on social media for under-16s. I thank the Secretary of State and the Minister for AI and Online Safety for their excellent work, which means that young people across Glasgow and Scotland will be much safer. However, kids will get round the ban and young people aged 16 and over also need to be protected—in fact, we all do. May I encourage the Secretary of State to pursue with utter conviction further regulation to crack down on misinformation, secure the clear labelling of AI generated content and ensure transparency of algorithms?
I welcome my hon. Friend’s urging. We do indeed intend to look at further measures about this. As I have said, including to the Chair of the Select Committee, I will look once again at the challenges around misinformation and disinformation; this summer we will be consulting on the very issue of digital replicas and launching a taskforce on labelling AI content. That is part of the work we are doing around the creative sector, but it is also about tackling misinformation and disinformation and protecting our children and our democratic process.
Parents, teachers and young people across North Dorset welcomed the Secretary of State’s announcement last month, as do I. This is clearly a fast moving area of communication. Will the Secretary of State assure the House that this will be an iterative and evolutionary process, with Government deploying the resources so that we are well placed to meet new challenges and our young people are safe and protected?
As always, the hon. Gentleman makes an important point, which is that this is not a “one and done”, as I said in my statement last week. It cannot be, because technology is changing so fast. I have looked seriously at the fact that the Online Safety Act 2023 took eight years from initial idea to implementation, and that is not good enough. We have taken powers in the Children’s Wellbeing and Schools Act 2026 to address features and functions, which I think will help, but I am sure there is much more we can do. I have said that this is not a one and done, and I will always be willing to look at further measures.
The makers of the Louis Theroux documentary “Inside the Manosphere” showed the all party parliamentary group on fatherhood, which I chair, that within 15 minutes of looking at YouTube, young boys could be shown misogynistic content when they are simply trying to search for gym content. Will the Secretary of State confirm that the ban on social media will include platforms that do not require an account, so that children can be protected from that as well?
I saw the documentary and absolutely agree how concerning it is. I bet that many men, even some in this Chamber, will have been fed this vile stuff just because they are a man. We are looking at a whole range of measures. We are also looking at the issues of advertising and money, which are relevant to the hon. Gentleman’s question as they are driving a lot of this. The Minister for Digital Government and Data, my right hon. Friend the Member for Edinburgh South (Ian Murray), who is a joint Minister in the Department for Culture, Media and Sport, is chairing a taskforce looking specifically at that matter, but I always like to see further recommendations, so the hon. Member for Henley and Thame (Freddie van Mierlo) should send them in.
I call the shadow Minister.
This might be the last time this Department for Science, Innovation and Technology ministerial team get the chance to face us at the Dispatch Box, so on behalf of our team I wish them well over the next few weeks as the Government go through their hard reset. Has the Secretary of State spoken to the virtual Prime Minister, the right hon. Member for Makerfield (Andy Burnham), and told him of the work under way to deliver the essential safeguards to restrict social media for under-16s following the successful campaign by parents, families and the Conservative Opposition, led by the Leader of the Opposition? Or is it that, as when we pull the plug on a computer, any unsaved progress will be lost?
Of course I have talked to my right hon. Friend the Member for Makerfield, because I am focusing on doing my job, which is to do the right thing for children and families in this country. I hope the hon. Member for Runnymede and Weybridge (Dr Spencer) gets a good rest over the summer holidays too, and maybe works up some slightly more challenging questions.
I call the Liberal Democrat spokesperson.
This might be the last time we face this ministerial team, but I hope that they will stay, because I know they have done a lot of hard work on online safety. With that in mind, I have recently spoken to students in Harpenden and Berkhamsted, who passionately shared their fears and hopes around AI chatbots. With the Labour leadership transition putting any major announcements on hold, what guarantees can the Secretary of State give that, alongside the support of the right hon. Member for Makerfield—the Prime Minister in waiting—there will be an announcement in July about AI online safety, and vital protections will not be sidelined?
I share the concerns of the good people of the hon. Member’s constituency about AI chatbots. I will come back with a further statement to the House about the things I said in my last statement, not only looking at further steps on AI chatbots—we have banned sexualised companion chatbots and the features within general chatbots that allow that to happen—but on overnight curfews, brakes on infinite scrolling and various other things. I will make the fullest possible update to the House on those measures, as I said I would.
This Government have led the world in tackling dangerous content online, including in law with illegal content duties that platforms must comply with, with our full backing for Ofcom’s enforcement of them, and by strengthening the law, with cyber flashing, intimate image abuse and self harm content all deemed priority offences needing to be proactively tackled, as well as political conviction in the face of non compliance. When Grok nudified images, this Government stood up, called it out and won by being on the side of British families, not tech platforms.
I warmly welcome the Government’s plans to ban social media for under-16s. However, when it comes to content promoting eating disorders, the risks do not simply disappear at 16. The eating disorder charity, Beat, recently pushed ChatGPT to stop generating restrictive meal plans altogether, which it did, so it is possible. Other platforms, however, have failed to act, with X still allowing users to search for harmful hashtags, such as #proana and #bonespo—I apologise if that is triggering. Will the Minister work with me and the eating disorders all party parliamentary group to ensure that platforms such as X can no longer exploit mental ill health for engagement and profit?
I first thank my hon. Friend for championing an incredibly important cause. Content promoting eating disorders is horrific, and I have to be clear that not just at the age of 16, but under the Online Safety Act 2023, platforms must already prevent children under the age of 18 from accessing content about eating disorders or self harm. Indeed, it is now a primary priority content offence, requiring a higher bar still to be discharged by those platforms. I will of course, as ever, be delighted to work with him and the eating disorders APPG on his further proposals.
I thank the Secretary of State and the ministerial team for their positive engagement with me and colleagues across the House who have been working with bereaved families and the Molly Rose Foundation on the devastating impact of suicide forums. On the new crisis response protocol, my understanding is that it is primarily designed for large scale public safety events. Can the Secretary of State advise on whether Ofcom will consider rapid response arrangements being expanded to cover cases where compelling evidence shows that content presents a risk for suicide, so that platforms are expected to act with the same urgency to protect individual lives?
I first pay tribute to the families that I have met who have raised the issue of suicide forums, which the hon. Member rightly raises. I have committed to them in the past that we will continue to press for quicker remedies for them when they suffer the worst tragedies imaginable. The Secretary of State and I will, of course, be delighted to look at whether there are ways we can make that a more systematic, rapid response.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I am proud that this Labour Government have committed a record £86 billion towards R&D, including on astronomy, space science and others, to supercharge innovation. Within that, UK Research and Innovation’s Science and Technology Facilities Council—the main funder of particle physics, astronomy and nuclear physics—has a stable budget with increasing investment in research areas that lead to and underpin discovery.
I thank the Minister for his answer. My Oxfordshire constituency is home to Harwell campus, the UK’s largest concentration of space and science organisations. Despite what the Minister said about the budget, the need for £162 million of savings by 2030 that was imposed on the Science and Technology Facilities Council risks jobs and critical research equipment, undermining our global science leadership. Does the Minister share those concerns, and what steps will he take to protect scientific jobs and facilities?
I pay tribute to the hon. Gentleman and everyone at the Harwell campus, which hosts over £1 billion of world leading research infrastructure. A lot of concerns have been raised by the physics community about this issue. I can confirm that funding for STFC has not been cut. UKRI has decided that STFC’s core budget should be maintained over the spending review period. Of course, we understand the cost pressures through inflation, foreign exchange and the ambitious commitments that were made from the previous spending review. No final decisions are being made, but STFC is working through that with the community.
Particle physics and astronomy have had a rough deal since the Particle Physics and Astronomy Research Council—PPARC—was abolished about 19 years ago. I understand that the justification being put out by the Science Minister and other Ministers is that there has been a change to mission driven research as opposed to fundamental blue skies research. This is a mistake: most practical applications of science have come from scientists asking fundamental questions that had no relevance at the time. Does the Minister agree that the policy is a mistake?
I do not agree with my hon. Friend about the policy. We are putting £86 billion into research and development, including astronomy and space science, including a record £38 billion for UK Research and Innovation. Of that, £14.5 billion is for curiosity driven research because we know that there is no route to stronger growth in this country than through significant investment in science, innovation and tech.
Our economy loses around £3.5 billion a year because women leave the tech sector or change jobs due to barriers that should not exist. That is bad for women and for the tech sector because it loses out on their skills, talent and experience. It is why our women in tech taskforce is addressing the systematic barriers that prevent women from entering, progressing and leading this vital sector.
Evidence suggests that AI tools used in recruitment often favour male names almost five times more than female names, and AI models built to prevent liver disease are twice as likely to miss the disease in women. Does my right hon. Friend agree that unless we have women shaping this technology, it will continue not to deliver for women? Can she outline Government plans to address those biases while encouraging more women in Paisley and Renfrewshire South to join the sector?
My hon. Friend is right that the bias in technology highlights why we need more women building it. We want more women in tech and more tech that works for women. That is exactly why we launched the women in tech taskforce. We will publish the results of its call for evidence next week. We have had a fantastic response, but we are not waiting to take action: we are launching a new tech first girls programme for 12 and 13 year olds, to help advance women’s careers by giving them minimum six- month placements, and we are putting our own house in order by ensuring Government Departments, such as the Ministry of Justice and the Home Office, help software developers return to work after 18 months.
I thank the Minister for her answer to the question put forward by the hon. Member for Paisley and Renfrewshire South (Johanna Baxter). Some companies are already setting aside a number of places—a quota—for ladies for the jobs they hope to introduce women to. Does the Minister think that it is time to set a quota for companies? We recognise some of the good work that companies do, but a quota for places for ladies might persuade many companies to go the extra mile.
I think the most effective way to get change is to show the results that have been achieved by the women who produce the brilliant science and technology that helps to create innovations and bring in the cash. Women founders of tech companies get only 2p in every £1 in venture capital funding, yet on average they present 35% higher returns. If companies want better science and tech and a better economy, they had better get more women on board.
I am proud that today I am launching our charter for women in research, setting out minimum standards for maternity pay and leave for women doing PhDs in this country, alongside leave for their partners, adoption leave, leave for baby loss and pregnancy related sickness. More than 64 organisations have already signed up. This is crucial for women, for the quality of science and tech and for our country, because Britain succeeds only when we make the most of all our talents.
At the all party parliamentary group on digital communities, which I chair, we often hear from mobile network operators that one reason they do not serve rural areas properly is that they cannot get planning permission. In Shropshire, the council has given planning permission to a passive infrastructure provider for three specific sites but it still cannot get the mobile network operators to put their equipment on their masts. What can the Secretary of State do to ensure mobile network operators give my constituents the coverage that they are paying for?
I know that the hon. Lady is really concerned to ensure that her constituents have proper network coverage. We encourage mobile network operators to use existing infrastructure where they can, but I am more than happy to arrange a meeting with my right hon. Friend the Minister for Digital Government and Data to get the progress that the people of North Shropshire need and deserve.
I thank my hon. Friend for raising that critical question for Britain’s creative sector. Just yesterday, on British IP Day, I met with the Alliance for Intellectual Property, including artists, authors, publishers, journalists and media organisations, to talk about how our work on digital replicas and transparency will be critical to supporting the creative sector. I would be delighted to meet my hon. Friend and the APPG.
I call the shadow Secretary of State.
Professor Brian Cox is among the eminent scientists warning about the impact of Government cuts to research on advanced physics and astronomy—a move that he calls “inexplicable”. Meanwhile, the Government are spending millions on projects examining climate coloniality, decolonising justice and transforming LGBTIQ+ asylum policies. Are those the Secretary of State’s research priorities too? If not, has she made that crystal clear to UK Research and Innovation?
I am sorry to put the hon. Lady straight, but we are not cutting money for that. We are actually putting in the biggest funding for research and development ever in this country—something of which I am especially proud. We are protecting curiosity led research and ensuring that we focus on the key priorities of this country, because we know there is no route to stronger growth or better answers and innovations without science and technology at its core.
I think the Secretary of State just said that the eminent professors are wrong.
Aside from research spend, one of the core reasons for the budgetary pressures in physics is the ruinous cost of energy under Labour. It is ideology in research spend, and it is ideology in energy policy. In March, the Secretary of State said we need to sort out the problems facing physics funding as soon as possible; it is now July. Has she lobbied the Energy Secretary to stop him driving up the core costs of our critical scientific research institutions?
I say gently to the hon. Lady that we are dealing with the mess we inherited from Conservative Members by ensuring that this country can rely on clean, renewable, home grown energy right here in Britain. That is why we are driving the technological revolution in AI in our AI growth zones in Wales through three small modular nuclear reactors. It is also why this country has had more venture capital funding in our AI start ups just this year than the whole of the rest of Europe. We are driving forward change to ensure that this country can succeed.
This Government are boosting digital and AI skills by embedding media literacy across all key stages, including by introducing an AI inclusive computing GCSE and a £20 million early careers jobs alliance. We will ensure that digital inclusion is fundamental as the Government work to develop digital access to public services through digital ID. These measures will support children and all people to access public services when they need them; they will be personalised, joined up and involve less faff.
The hon. Gentleman makes an important point—we know children will try to get around the ban, and will succeed. Our measures are as much about resetting the cultural and social norms for future generations, but we will have more highly effective age verification measures to make this work. We are looking at the issue of VPNs in particular, and I will come back to the House with more on that issue very soon.
Before we come to Prime Minister’s questions, I extend a warm welcome to the Speaker of the House of Representatives of Trinidad and Tobago and his delegation, who are in the Gallery today.
The Prime Minister was asked—
Our thoughts, and I am sure the thoughts of the whole House, are with the people of Venezuela—the scenes of destruction are simply harrowing. We have committed humanitarian funding and deployed expert search and rescue teams, and I can announce today that we will match public donations up to £2 million on aid.
In an increasingly dangerous and volatile world, our defence investment plan commits more to investment in our armed forces. It delivers the modern kit and capabilities our personnel need to keep us safe, meaning we buy British to create jobs here at home and strengthen our international leadership.
Sunday marks the 78th birthday of the NHS, and I am pleased that under this Government, waiting lists are down, A&E waits are shorter, and we have the shortest cancer diagnosis times on record. I also welcome the agreement reached with the resident doctors to end the strikes, so that our full focus can be on delivering further improvements for patients.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
I associate myself with the Prime Minister’s condolences and his birthday good wishes to the NHS.
Everyone in my constituency of Surrey Heath wants a new Frimley Park hospital, but the chosen site—the last remaining fragment of the ancient Frimley common—is wholly inappropriate. It is inaccessible, behind multiple schools, and environmentally devastating. Worse, over recent weeks, I have received deeply troubling evidence that the preferred relocation site was known and being openly discussed by local political figures in 2023, before the official site selection process had even begun. The entirely reasonable conclusion is that this project has been compromised from the outset and the site predetermined. I think the Prime Minister would agree that this is no way to begin a multibillion pound public procurement process, so will he please step in, commission an urgent independent review—
Order. I think the Prime Minister has got the question.
The hon. Gentleman’s NHS trust has identified its preferred site for the new Frimley Park hospital, and detailed technical work can now start. Let us be frank about this hospital. The Tories promised 40 new hospitals with no funding and no delivery plan, and we have had to fix that. Thanks to Labour investment, the hon. Gentleman’s hospital is at the front of the queue. It will be one of the first in the country to be rebuilt, but his approach has been, on the one hand, to demand a new hospital, and then to oppose actually building it. He has urged his constituents to oppose it because, to quote him, “if this hospital goes ahead, there will be no golf course.”
Labour is building new hospitals, and the hon. Gentleman is standing up for golf courses. I cannot think of anything more Lib Dem.
I am proud that this Government are delivering the biggest boost to social and affordable housing in a generation. That is backed by £39 billion, and it means we are unleashing the biggest surge in council house building in more than 30 years. That includes a thousand new social and affordable homes in Luton and Bedfordshire. Our Social Housing Bill will reform right to buy to deliver even more social houses. That is a Labour Government delivering the homes that we need.
I call the Leader of the Opposition.
Can I associate myself and those on the Opposition Benches with the Prime Minister’s comments about Venezuela, and also about the Lib Dems? [Laughter.] But seriously, the Chief of the Defence Staff made it known that the armed forces needed a minimum of £28 billion more to defend the country. Can the Prime Minister tell us why he thinks half that amount is enough?
I am proud that this Labour Government have delivered two major funding increases in just two years in government. The first, which was funded by overseas aid, took us to £270 billion over the spending review period. That is a record. The defence investment plan gives us the capability we need for the future and sets a new record of £300 billion over the next four years. That will be invested in drones and autonomous weapons—the largest ever investment—strengthen the UK’s nuclear capability, upgrade our naval bases in the most significant way for 45 years, and confirm our commitment to the next generation of fighter jets. That is what is needed to keep our country safe.
The Prime Minister did not say that it was enough, and that was a very long list of things that he is not yet paying for. It is not right and it is not fair—certainly not to our troops, who put their lives on the line for all of us every single day. Three weeks ago, the Defence Secretary, the right hon. Member for Rawmarsh and Conisbrough (John Healey), resigned saying, “I am being forced to make decisions that would…increase the risk to personnel on operations, and could make the country less safe.”
Since that letter, the Prime Minister has increased spending by only 0.01%. We can count, the generals can count, and the Kremlin can count, and his plan does not add up. How can he possibly stand there and say that this is enough?
This is the most significant upgrade in defence spending since the 1980s. The Chief of the Defence Staff has been clear that the plan accelerates the transformation we need for our armed forces. The First Sea Lord said that it funds the capability we need to fight and win, and the Chief of the Air Staff said that it strengthens our contribution to NATO. The Leader of the Opposition must have missed that yesterday, the Secretary General of NATO welcomed the plan. Those are all people who know what is in the plan and welcome it.
We can contrast that with the Conservatives’ record in government. They hollowed out the armed forces. Their record is cutting defence spending; my record is raising it to £300 billion and rising. Their record is cutting frigates by a quarter, cutting minehunters by a half and leaving 47 out of 49 defence programmes delayed or over budget; my record is the biggest boost to defence investment since the 1980s. Their record is missing Army recruitment targets every year for 14 years. We have given our armed forces the biggest pay rise for 20 years and increased defence funding by £15 billion a year. That is a record I am proud to stand on.
The Chief of the Defence Staff is an honourable man, and what he and the NATO Secretary General have done is welcome the fact that the plan has been published—just that it has been published. They have been waiting for more than a year. The strategic defence review was last year. The Chief of the Defence Staff is an honourable man who is having to make do with very little.
The threat level has dramatically changed in the two years that the Prime Minister has been in office. Since he took office, Poland has increased its funding to 4.8% and Germany has increased its funding to 3.7%. This year, Russia will spend 10% of GDP on defence. Meanwhile, Britain is spending it all on welfare. Even the limited plan that the Prime Minister has announced has completely unravelled, because he has not found the money to pay for it. It is £5 billion short. We all know that he is leaving this mess to his successor. Can he confirm that the right hon. Member for Makerfield (Andy Burnham) has agreed to fund the shortfall?
What the Conservatives did was cut defence spending. When they came to power, defence spending was 2.5%. What did they do? They cut it to 2.3%—a cut! On welfare, what did they do? They put it up by £88 billion. So we will take no lectures from them about either welfare or defence.
This is £15 billion of new investment for defence, delivered outside a Budget and outside a spending review. That is about £1 billion a year over four years. Because of the decisions at the last Budget, we have had headroom of £22 billion. That is precisely so that we can take decisions like this. We delivered it outside a Budget and outside a spending review, just as we did with special educational needs, outside a Budget and outside a spending review, and just as the last Government did when they announced their five year NHS plan in 2018, outside a Budget and outside a spending review. And what did they say when they were challenged about it?
“We will be able to explain exactly where every penny is coming from but we will do that in the Budget.”
That was the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), then the Health Secretary and later the Chancellor of the Exchequer.
When the Conservatives published their integrated defence review in 2020, what did they do? They set out the funding at the next spending review. So let us drop the faux outrage and focus on what matters: the biggest sustained increase for 40 years and the biggest increase for 45 years, providing what is needed to keep the country safe.
The Prime Minister says that he is delivering this outside the Budget. That is right: it should have been in the last Budget. The strategic defence review was published last year. It should have been in the last Budget, not the next Budget. According to the intelligence assessment that the Prime Minister himself has said we have, there could be an attack on NATO by 2030, but this plan does not deliver until after that. Not only is £5 billion missing from his plan, but it relies on £11 billion of unidentified savings.
The plan has unravelled. It is a total dereliction of duty, and I am not the only one who thinks so. The Times said today that the Prime Minister’s “legacy”—[Interruption.] Well, why don’t we wait and see what The Times said? It said that the Prime Minister’s “legacy is betrayal, failure and vulnerability”
—and that is one of the nicer headlines.
I will ask again, because the Prime Minister did not answer the question. Did the right hon. Member for Makerfield know that he was going to have to find £5 billion for the Prime Minister’s plan?
When I became Prime Minister two years ago, this country spent £54 billion a year on defence. Because of the decisions we have taken, that will rise to £80 billion a year by 2029. That is a real terms increase of 27%, transforming our armed forces. We are not going to take any lectures from the Conservatives. They cut defence spending. They hollowed out the armed forces. That is what their Defence Secretary admitted they did. [Interruption.] They do not like it. They will not defend their record, because they cannot. They will not apologise for it, because that would be to admit what we all know: it is a total failure. They just try to pretend that the 14 years during which they were in power never really happened. We are in power. We have record investment in defence and security. I am proud of this Labour Government, and any Labour Prime Minister would stand behind this plan.
It does not sound as if the Prime Minister has told the right hon. Member for Makerfield to find £5 billion. He says that any Labour Prime Minister would stand behind this plan. Let me tell him what Lord Dannatt, the former head of the Army, said yesterday. He said that the Prime Minister had chosen the “cheap option”, and he called the plan “woefully inadequate”. Let me tell him what General Sir Richard Barrons, one of the authors of his own strategic defence review, said yesterday: “we are simply not going to be ready to defend this country properly.”
That is what they are saying.
The reason the Prime Minister is in this mess is that he was too weak to cut welfare when he had the chance. There are only three ways to find the missing £5 billion: increase borrowing, increase taxes, or cut welfare. Which one will the Prime Minister recommend to the right hon. Member for Makerfield?
We are talking about £1 billion a year over four years. The decisions at the last Budget gave us more than £22 billion in headroom, so we can take the decisions the country—[Interruption.] The Conservatives do not understand this, because they crashed the economy. We built a headroom of £22 billion. The very reason for the headroom is so that we have the credibility to take decisions outside the Budget and outside the spending review. The Conservatives do not understand it because they lost control of the public finances. In addition to doing more for defence and security, we have taken control of the public finances. That is why we have headroom to take credible decisions like this. We have £1 billion a year over four years and headroom of £22 billion because of the decisions that we took in the last Budget, which allow us to take these decisions.
We understand it perfectly, and that is why—[Interruption.] Yes, we do. That is why the Prime Minister is leaving and so is his Chancellor. Labour Members are laughing and pretending, but if he was doing such a fabulous job, why did he resign?
Defence of the realm is the first duty of Government. [Interruption.] Yes, it is the first duty of Government. I do not need to read again what General Sir Richard Barrons or Lord Richard Dannatt said. Maybe Labour Members did not hear it the first time—they can rewatch the clips—but defence of the realm is the first duty of Government. Britain is facing a moment of danger unlike anything in our lifetimes and unlike anything that we saw in government. We need a plan to fund our armed forces that meets this moment. They are the Government for now, not for 10 years ago, and the fact is that Labour’s plan is too weak, it is too little and it is too late. If the Prime Minister’s successor does not want to be complicit in this failure, he should come out and condemn this plan. The money must be found, and that money should come from cutting welfare—something that these Labour MPs will not do. If Labour cannot defend our country, what is the point of them?
It is just all talk. What did the Conservatives actually do? They cut defence, from 2.5% to 2.3%, in their 14 long years. And what did they do on welfare? They put the bill up by £88 billion, so we will take no lectures from them. They failed in the first duty of Government, and they will not defend their record, will they? Never do they stand here and defend their record, because they cannot—14 years of failure. They do not get up and apologise, which is what they should do, because they would have to admit what we all know—how much they failed—so they just sit there pretending it did not happen. Well, it did happen. You hollowed out the armed forces; we are correcting that now.
I will tell you what else. When we came into power, public services were on their knees. Today we have seen the fastest fall in NHS waiting lists for 17 years. When I became Prime Minister, we inherited a broken economy. Today we are outperforming the other G7 economies. When I became Prime Minister, our international alliances had been shredded. Now other countries are looking to us to lead on defence and security—foundations of a stronger and fairer country. Britain is in a better state than we found it. That is the difference a Labour Government make.
I thank my hon. Friend for raising this case; he has been a committed campaigner on this issue. I have seen the details of that particular case, and he is right not to repeat them in this Chamber—they are horrifying. The lack of dignity and compassion is unacceptable, and I simply cannot imagine the pain that Cody, Liam and Zoe experienced and are still experiencing. The status quo here is not working for families, and people deserve to know that their loved ones are treated with dignity and compassion. We are going to consider this issue closely, and I thank him for raising it. I do want stronger standards and oversight. I think that is absolutely needed, particularly in the light of appalling cases like this.
I call the leader of the Liberal Democrats.
Can I not associate myself with the Prime Minister’s comments about my party, but can I associate myself with all his remarks about the earthquake and humanitarian catastrophe in Venezuela? May I commend the Scottish team and the Scottish fans for the joy they brought to the world cup? They did the whole of Scotland proud. May I wish England well against DR Congo later today? But with Reece James and Jarell Quansah in doubt, I know the Prime Minister is not the only one struggling for a solid defence plan. [Laughter.] The wars in Ukraine and Iran show us how seriously we must take the threat of missiles and drones hitting our country. Our national security requires the best possible missile defence system, including Royal Navy destroyers, but the funding in the Prime Minister’s plan for this falls dangerously short. Yet he has rejected our proposals for defence bonds, which were used in the past to rearm our country. So why has the Prime Minister chosen to leave our country so vulnerable to missile attack?
First, I join the right hon. Member in his comments about the Scotland team and the Scotland fans, and in wishing England well. I am not sure about his gag. He was getting a bit better the other week, but he has gone back down—I am afraid that one is a red card.
Our defence investment plan gives our country what we need to fight now and into the future, with the capability that has been assessed through the strategic review. Bonds, which we looked at very closely, are simply borrowing by another name, and we are already borrowing in a way that requires us to spend £1 in every £10 on servicing the interest. I would gently point out, before the right hon. Member carries on with any criticism of our plan, that he sat in a Cabinet that cut defence spending by 22%.
The Prime Minister knows that our defence bonds are within his own fiscal rules and that he has had advice from his own team that he should adopt them, and I hope the right hon. Member for Makerfield (Andy Burnham) will listen.
I have another concern that I think the Prime Minister will share: the rising tide of racist violence and hate that we are seeing in our country, and the way it is being incited and normalised, including, I am afraid, by some Members of this House. I was talking to a British friend of Indian ancestry who told me how Reform activists came to her door and said that, if they get into power, she and her family will have their passports seized and their citizenship revoked. Does the Prime Minister agree that racism has no place in our country, and will he join me in condemning anyone who is stoking it?
I thank the right hon. Member for raising this. It is really important, because our politics is becoming more divisive, and racism and intolerance are permeating everywhere. We have to deal with it, because it is tearing our societies apart, it is keeping good people away from politics because they do not want to be involved in it and it should be called out by every single person who is a politician at any level in this country.
Mr Speaker, I say this looking at the plaque to Jo Cox, and of course we have David Amess’s plaque behind me too. We had a Jo Cox 10-year reminder—it was 10 years ago, just a week or so ago, that we lost Jo—when I held a reception in Downing Street with her parents, close friends and relatives. We read out Jo’s words again, but the very sad thing is that I was not able to say that, in the 10 years since Jo’s death, things have got better, because sadly they have got worse. That is on all of us to fix—every single Member of this House, whatever their party—and anybody who flames it should be absolutely ashamed of themselves.
Order. I call the Prime Minister.
I thought the next few weeks were about to get quite interesting, Mr Speaker. We all wish England the best of luck this evening. Every time those players step on to the pitch, they represent the talent, ambition and diversity of this country. We are proud to be supporting the next generation, investing £400 million in grassroots facilities and over £1 billion in school sports. And if Thomas Tuchel needs any advice on penalties, he should ask David Seaman, who slotted one past him just a few weeks ago.
I am gravely concerned that time after time this Prime Minister, in response to the abject and honest criticism of his defence investment plan, cites recent trends in defence spending, when he should be calibrating it against the chronic and very real threat the people on these islands face. In his limited time left in No. 10, will he get a grip of his paper thin plan?
That is from the party that thinks we should give up the nuclear deterrent, and the hon. Gentleman stands there to talk about defence. We need no more advice and sanctimonious nonsense from the SNP. Before he or any of them give any more advice to me or this House, let us have some home truths. Their chief executive has just been jailed for five years for embezzlement. They are all pretending they did not know anything about it. They could not even see the motorhome parked in the driveway, apparently. And now they are blocking an inquiry in the Scottish Parliament. Before they offer any more advice, they should look in the mirror.
Our commitment to space in the defence investment plan reflects how we are preparing our armed forces for the conflicts of the future. When I see apprentices working in our defence industries, I see this investment creating more opportunities in many constituencies, including in my hon. Friend’s. It underlines exactly what our investment delivers: 60,000 new jobs, investing in British skills, promoting our brilliant industries abroad and driving growth in the UK.
In relation to the hon. Gentleman’s hospital, he knows that those decisions are taken at a local level, based on expert advice. We are committed to prioritising women’s health as we reform the NHS, including through our women’s health strategy. In his area alone we are investing £57 million to transform care. That is money we provided at the Budget. He actually voted against it, along with the rest of the Lib Dems. They cannot complain about the lack of investment and then, when we put the money forward, vote against it. That, again, is very Lib Dem.
I thank my hon. Friend for raising this subject. Baroness Amos’s findings show a deeply disturbing picture of deep fragmentation and an overly complex system, with women and families not being listened to, no proper accountability, and discrimination driving inequalities in treatment and outcomes. We will deliver the change that is needed. We will look at the urgent recommendations of Baroness Amos and Donna Ockenden and deliver them. I thank my hon. Friend for leading from the front as the first maternity adviser, working with families and the NHS to deliver safer and better care for every mother and baby. I know that her son Billy will be very proud of her.
I thank the right hon. Gentleman for raising this important point—I am enjoying our weekly exchanges! Every veteran who served our country should be looked after and better able to access any compensation that they are entitled to. We have dedicated pathways for veterans in every jobcentre to provide support with benefit claims and complex cases. I can assure and reassure him that anyone coming forward will get tailored support, and we will seek to resolve any issues swiftly and fairly to see where we can improve. If the right hon. Gentleman or other Members have any specific cases, they can pass the details to us, and we will look at them. I noticed that the BBC reported on the right hon. Gentleman’s question last week as being almost certainly his last to me as Prime Minister—a reminder that you shouldn’t always believe everything you read in the news! I look forward to seeing him—same time, same place—next week.
My hon. Friend always speaks her mind! [Laughter.] I join her in thanking our people. I am proud that during my tenure, we have delivered five major trade deals, led the coalition of the willing to support Ukraine, strengthened the NATO alliance, built stronger partnerships with the EU and kept us out of the war in Iran. I thank my hon. Friend for the contribution that she made as a Minister in the Foreign Office.
The hon. Member obviously did not pay as much attention as he should have to what I said yesterday on the plan, the capability, the record investment that we are putting in and how we are funding it. I do agree that we need to work more closely with the EU on defence and security, as well as on trade and the economy. That is precisely what we agreed at the EU UK summit last year, and we have been building on that. I am proud to say that in the last two years, the relationship between the UK and the EU has been transformed into a much better, trusted relationship. It is very important that, as Prime Minister, I leave the country in a better state than I found it, and I do.
I thank my hon. Friend for raising this matter. I am pleased that we have delivered over 1.8 million additional courses of NHS treatment, because no one needing urgent care should be left in pain and waiting for help. We have already made early reforms, including embedding urgent care into the contract so that people get fast access to NHS care, and delivering the first sustained expansion of dental school places in nearly 20 years to get extra dentists trained. We will consult on a reformed dental contract soon, and I will make sure that Ministers update my hon. Friend on that.
I am very proud of the fact that after net migration reached almost 1 million under the Conservatives, we have brought it down by 82%. The hon. Gentleman references the asylum system; asylum decisions are being made at record levels, the backlog is down, removals are up 41% and we are closing asylum hotels. The Conservatives lost control of our borders, but small boat crossings are now coming down, and we have deported 70,000 people with no right to be here.
The hon. Gentleman likes to ask questions. He should be asking some questions of the leader of his party, the hon. Member for Clacton (Nigel Farage), who is sitting next to him—he received £5 million from a crypto billionaire and then privately lobbied the Bank of England on digital currencies. Did the Reform leader carry out paid lobbying? Why did he keep his £5 million gift secret? Are Reform Members happy with their leader earning £20,000 an hour flogging gold bullion? They need to ask questions across the Reform Bench, but they never do.
We are determined to transform mental health services so that everyone gets the support they need. I am pleased to say that we have recruited 8,700 extra mental health workers. We have opened the first of six 24/7 neighbourhood mental health centres and ensured that nearly 800,000 more children and young people have access to a mental health support team at their school or college. There is more to be done, but this is a real step forward.
I thank the hon. Lady for raising the case in Belfast that concluded last week and, like her, salute the courage of the victims to come forward. It must have taken extraordinary courage; it does in every single one of these cases, but particularly when they involve powerful people and institutions, it takes even more courage to do so. We salute them for their own acts, but also because that will, I hope, have helped others to see that if they do come forward, they will be believed and justice can be done, notwithstanding the difficulties.
On grooming, we have set up the inquiry and it is very important it goes wherever the evidence should take it. That is an absolute guiding principle of the inquiry.
This afternoon we are joined in the Gallery by Lisa Phillips, a British survivor of Jeffrey Epstein’s horrific and despicable trafficking and abuse. Lisa’s bravery is to be commended, and her determination for justice and accountability on behalf of all UK survivors should be put on record. I want to place on record my thanks to you, Mr Speaker, for meeting Lisa this week; your solidarity means more than you will ever know. In that vein, will the Prime Minister please commit to meet Lisa and the other British survivors, and commit to what is needed: a full public inquiry, so that we can have truth, justice and accountability?
I thank my hon. Friend for raising this really important issue and drawing it to the attention of the House, and I am glad that we are joined in the Gallery today. It is really important that we keep our focus on violence against women and girls, and I will make sure the meeting she requested is set up.
12.42 pm
(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if she will make a statement on Israel’s planned illegal expansion in the E1 zone in the Occupied Palestinian Territories.
The British Government firmly oppose the E1 settlement plan. It would divide the west bank in two and mark a serious breach of international law. The Prime Minister led 11 other world leaders in a joint statement last month. That condemned the E1 plans, urged the Israeli Government to end settlement expansion, and warned businesses of legal and reputational consequences of participating in construction in E1 and other settlements. We are clear: businesses should not bid for construction tenders in E1 or other settlements.
We are deeply alarmed by the situation in the west bank: illegal settlements continue to expand; settler violence remains at record levels; and the Israeli Government have further entrenched their control. Last month, the Foreign Secretary announced further sanctions in response to that violence in the west bank. That is the fourth package under this Government. We welcome the condemnation of settler violence at the highest levels of Israeli society. Now Israel must conduct swift and transparent investigations into these attacks, and ensure accountability.
The Foreign Secretary also announced that we had updated our business guidance to clearly advise British businesses and citizens not to engage in economic and financial activity in settlements. We have been concerned by efforts to advertise settlement property in the UK and by reports of charitable links between the UK and settlements. I have written to the Advertising Standards Authority and spoken to the Charity Commission about these issues, but I want to reassure the House that while these trends in the west bank continue to worsen, we will continue to take steps to ensure that no one can profit from the sale of land that has been taken unlawfully, that violent settlers are held to account, and that the British Government stand up for the rule of law, for the right of Palestinians to self determination, and for the prospects for peace and security through a two state solution.
We are in discussion with partners, including those few countries who have explored how a ban on settlement trade might work. We are looking at further concrete steps to counter settlement expansion and promote peace and security. It is only through a negotiated two state solution, not unilateral action, that a viable path to long term peace can be achieved. That path must guarantee security to Israelis and Palestinians alike.
Just yesterday, the Israel Land Authority published new dates for the tender for the construction of the proposed E1 settlement zone in the west bank. The bidding period for the tender ends in October, and once the contracts have been awarded, it will become impossible to stop E1. Why is E1 so critical? It is because the proposed settlement would absolutely and permanently destroy any prospect of a true two state solution. It is a large area of land that would split the west bank from north to south, severing connections between Palestinian communities and East Jerusalem, while forcibly transferring 7,000 Palestinians—itself a war crime under the Rome statute.
A few of us visited just four weeks ago. We saw at first hand the accelerated pace at which Israel is expanding its illegal settlements. A massive 2,000 housing units have been approved since that visit alone according to the United Kingdom chargé d’affaires at the UN on Monday. It is clear that Israel is systematically and deliberately doing all it can to make a two state solution impossible, and its impunity must end.
Will the Minister make categorically clear today that any businesses or organisations, including financial and insurance institutions, or individuals that participate in or facilitate the construction of the E1 zone, will be sanctioned and not allowed to trade and do business with the UK, and will the Government legislate accordingly as a matter of urgency? Secondly, alongside 139 parliamentary colleagues, I have urged the Minister to end all trading with illegal Israeli settlements. Can I once again urge the Minister to implement a full ban and suspend the free trade agreement with Israel, based on its continued violations of human rights and the prospect of this development?
Palestine is fracturing before our eyes. Our intelligence can see this. The international community must stop E1.
I thank my hon. Friend for his attention to these issues, and I know that he recently travelled to the Occupied Palestinian Territories to see it with his own eyes. As I have said many times, I will not comment on sanctions from this Dispatch Box, but I have been clear, and the Prime Minister has led 11 other world leaders in being crystal clear, on the implications and consequences if the E1 settlement continues. He and his colleagues were clear in that statement that there would be implications for the businesses themselves. So far we have had word from the Israeli Government about their plans; clearly, businesses in the region will want to consider carefully the warning in the statement last week and the clear commitment from the Dispatch Box in the UK that we will take further measures if the violent action to increase settlements continues in the west bank.
I call the shadow Minister.
I will address directly the matter of settlements in a moment, but I want to make a broader point first. Diplomacy is about rolling up our sleeves and putting in the hard yards, not just issuing condemnatory statements. I believe that if the Minister wants to have real sway with the Government of Israel, there has to be meaningful dialogue, but at the moment there is no dialogue between this Labour Government and Israel, despite the obvious importance of the bilateral relationship to Britain across so many domains.
That is because of the decisions that Labour has made—from suspending export licences when Israel was burying murdered hostages to cancelling trade talks and recognising a Palestinian state when hostages were still being held in terrorist captivity. By deliberately keeping relations with Israel in a deep freeze, Labour is cutting off its ability to influence situations on the ground.
None the less, settlement expansion in the west bank is not helpful for achieving the long term peace that we all want to see. [Interruption.] That has long been my party’s position. We would also like to see Israel use its legal system to bear down on settler violence.
We on the Conservative Benches do support a two state solution: one that guarantees security and stability for both the Israeli and the Palestinian people. Will the Minister tell us whether he has spoken to his Israeli counterparts directly on the E1 situation? Are the Government doing anything at all to help the Abraham accords expand or to unblock issues holding up a broader regional peace? Finally, will he update us on his assessment of the Palestinian Authority’s plan to hold elections in November and whether he is concerned by the PA’s lack of progress on the total overhaul of curricula and welfare policy, which is so clearly needed?
I will deal first with the latter points raised by the Opposition spokesman. Yes, we continue to talk to the Palestinian Authority, including on the reform agenda and the need for elections.
It is an undeniable fact that I am the middle east Minister who during my time recognised a Palestinian state, and sanctioned Israeli Ministers who now regularly take to the airwaves to issue in the most bloodthirsty terms encouragement for some of the activity that I am being asked about today. I am afraid that an inevitable consequence of the actions announced from this Dispatch Box is that the warmth of my relationship with my counterparts in Israel has indeed suffered, but this Government will not hesitate to stand up for principles, which I think are supported right across this House.
The right hon. Lady could not have failed to hear the groans from behind her on the Conservative Benches. I know, in recognising a Palestinian state, that I was of course supported by Labour Members behind me, but I think I was also supported by Conservative Members behind her.
I call the Chair of the Foreign Affairs Committee.
I recently read an interesting letter from the Dutch Foreign Minister to the Speaker of their Parliament. In it, he said that his Government had carefully weighed the efficiency, the effectiveness, the proportionality, the enforceability and the administrative burden of introducing a full trade ban on Israeli goods coming from the illegal settlements in the west bank. He said that, having looked at all of that, the Netherlands had decided that the right thing to do and the legal thing to do was to push for a full trade ban with the settlements—and so has Ireland, and Norway, and Spain, and Slovenia, and Belgium, and Luxembourg, and Portugal, and Finland and Poland. My question is: when are we going to join them?
I dislike disagreeing with my right hon. Friend. Slovenia introduced and then repealed the measures it took. In our discussions with our counterparts—particularly those in the European Union—we hear of a number of technical difficulties that people are encountering. But let me be clear to the House, as I was in my statement, that I am confirming today that we are in discussions about such measures.
I call the Liberal Democrat spokesperson.
Well, here we are again. The Liberal Democrats have welcomed the Government’s historic decision to recognise the state of Palestine, which we have long called for. We have welcomed more recent statements of intent, including just 10 days ago in this House, but such statements are utterly hollow without action, especially when we know that the Israeli security cabinet’s stated aim is to make a future Palestinian state unviable.
We have asked these questions before, but we will ask them again. When will the Government put forward a clear plan to halt and reverse the illegal expansion into East Jerusalem and the west bank? When will they respond to the 2024 ruling of the International Court of Justice? When will they introduce a package of sanctions including fines for any UK firms that bid for contracts for settlement construction in E1 or anywhere in the Occupied Palestinian Territories? Will they expand that to cover any UK financial institution that finances or facilitates UK companies’ involvement in construction or other services? When will the UK move fast to ban all UK trade in goods and services with illegal Israeli settlements?
I think that I have already addressed most of those questions. I have just confirmed again, as I did in the statement, that we are in discussions about further measures in relation to west bank goods. We have set out business guidance, and the Foreign Secretary announced the fourth round of sanctions in June.
The hon. Lady referred to speed. I think she will acknowledge that we have moved rather more quickly than some of our partners and allies. I am pleased to see many of them taking some of the measures that I announced in the House in 2025, including sanctions on the Ministers that I mentioned. We are moving with alacrity in response to what we see.
The question at issue in the urgent question is about the E1 settlement expansion. It is rumoured that there is now a timetable for those tenders. I have been as clear as I can be from the Dispatch Box that we are watching very carefully who bids for those tenders. We have been clear repeatedly with the Israeli Government about our view on the E1 expansion; I have repeated it today. The question before us is whether, in the run up to the Israeli election, commercial entities choose to bid for those tenders. That is what we will be watching carefully and taking action in response to.
I call the Chair of the International Development Committee.
It is right that the Government acknowledge that Israel’s presence in Palestine is illegal under international law, but for two years they have not responded to the ICJ’s advisory ruling that Israel’s actions towards Palestinians in the west bank may constitute forcible transfer.
The Israeli Government expressly back the E1 scheme, which will necessarily displace tens of thousands of Palestinians and dissect the west bank. Netanyahu said of the plan: “We are going to fulfil our promise that there will be no Palestinian state. This place belongs to us.”
The UK’s current situation is unsustainable. Will the Minister acknowledge the Israeli Government’s role in the forcible transfer of Palestinians in the west bank and act accordingly with a full range of diplomatic interventions?
I would not want there to be any ambiguity about the force of our views about what is going on in the west bank. That is why we have done four rounds of sanctions and why I am setting out clearly today what the likely consequences are, should that action continue. The advisory opinion of the ICJ is important, but it is a non binding opinion of an international court. We do not need to make a judgment on that opinion in order to take action. Indeed, we have taken considerable action over the last two years in the way in which I have set out.
I have said it before and I will say it again: I believe that the life of a Palestinian child is as precious as that of an Israeli child. That is the foundation of all of my views on this. May I congratulate the Minister for the middle east, and indeed the Prime Minister, who is not in his place, on having the courage and the leadership to recognise the Palestinian state when they did so? I supported that and continue to do so.
Indeed, this urgent question justifies that position last September, because at that point we were all concerned that the viability of a Palestinian state was reducing as the weeks went by. We have seen that the extant policy of the current Israeli Government is to continue those illegal occupations and expansion. Will the Minister tell the House the latest on his discussions with Washington about the board of peace and reconstructing Gaza, ensuring that there is a viable Palestinian state? Finally, what is his view on whether the current Israeli Government’s position is likely to pertain beyond this autumn?
I thank the right hon. Gentleman for the question. We are clearly speaking in the run up to an Israeli election campaign. Elections are likely in October, and there is, as in any democratic country, a particularly heavy amount of policy positioning by various parties. We are calling on all Israeli politicians to abide by the basic principles of both international law and the very important 20-point plan to which he alluded. I have spoken to officials at the board of peace and the National Committee for the Administration of Gaza as well as the Palestinian Authority. It is vital that we make progress on that plan. There are still insufficient quantities of aid getting into Gaza and unresolved questions about the disarmament of Hamas. We are playing our full role behind the scenes to try to make progress on those questions, but the situation is becoming urgent indeed, both in the west bank and in Gaza.
The E1 settlement expansion programme is clearly designed to undermine a Palestinian state, despite this Government, for the first time in our history, recognising Palestinian statehood. Will my hon. Friend highlight the timeframe that he is working to, for discussions on the FTA, as well as for other actions, including sanctions? I recognise that he cannot talk about the specifics, but will he set out the timeline in order to assure us that it works, in the light of the expansion plan, so that we are not acting after the event, as has often been the case in relation to the Israeli Government’s actions?
I am hesitant; I do not want to end up talking about, at the Dispatch Box, what the Israeli Government’s plans may or may not be; they will speak about those themselves, through their own channels. As I understand it, there is an intent to have a tender, as was mentioned by the Liberal Democrat spokesperson, which would end in October. We will work to that timetable, which clearly runs right up to the Israeli election. It is deeply inappropriate to proceed, so close to an Israeli election, with a programme that has such grave consequences internationally.
I thank the hon. Member for Warwick and Leamington (Matt Western) for his urgent question. I was on the trip to Israel with him the other week, and we saw all too clearly and depressingly the very clear strategy of the Israeli Government; for them, E1 is a way of effectively blowing out of the water any delivery of a two state solution. May I gently make this point to the Minister? The quiet, gentle Foreign, Commonwealth and Development Office approach of taking a watching brief—looking at events to see how they unfold—needs a bit of gumption and muscle behind it. President Trump recently reminded Israel that without America, it would not exist. That should send a chill up the spine of Benjamin Netanyahu and his Ministers. As well as the Minister trying to talk to his Israeli counterparts, what conversation is he having with the Americans, who provide a massive amount of military support to Israel, to try to get the Netanyahu Government to rein it in, when it comes to E1?
The Foreign Secretary, other Ministers in the Government and I discuss those questions with the American Administration. It is obvious, as the President of the United States has said, that the Israeli Government are alienating even some of their closest allies through their conduct, both on the west bank and in Gaza.
I thank my hon. Friend for his response on Israel breaking international law, and for opposing and denouncing illegal settlements on the west bank. Recently, the International Development Committee heard about some of the atrocities that are taking place; in one instance, gunshot was fired through a car, killing a 7-month old baby and their parents. The community has no legal protections; they are not safe. What more are the Government doing, or considering, to give legal protections to this desperate community?
As I said, questions of justice and accountability are foremost in our mind. We raise them with the Israeli Government regularly, particularly in relation to cases that involve British nationals. We are still awaiting justice and accountability for the World Central Kitchen incident, which killed a number of British aid workers.
I know of so many stories like the one my hon. Friend refers to. I remember visiting Ramallah before I was a Minister; children had been killed on the streets as we drove in to see the Palestinian Authority. There are far, far too many such cases, and we continue to make that point with force, both to the Israelis and in multilateral settings.
In June last year, the UK sanctioned Israeli far right Minister Bezalel Smotrich for inciting violence against Palestinian communities. In recent weeks, Smotrich has issued an order to displace the Palestinian Bedouin community. The UK position on sanctions against Smotrich was part of a joint statement last year with Australia, New Zealand, Norway and Canada. What talks have the Government had with those same partners about further united sanctions against other Israeli Ministers?
For obvious reasons, I will not disclose the full details of diplomatic talks, but I am sure the hon. Gentleman can see the number of things that we have done jointly, including the E1 statement that I referred to last month. We think we have more impact and influence when we work in concert with our friends, and that is what we will always seek to do.
I was proud last year to be part of the Government who finally recognised the state of Palestine. However, the very idea of statehood is illusory when such activities are happening. After four rounds of sanctions, what is being done with international partners to hold individuals to account for forced displacement, as mentioned by my hon. Friend the Member for Warwick and Leamington (Matt Western), as we know that that constitutes a war crime under international humanitarian law?
It gives me no particular pleasure to be talking about the fourth round of sanctions. One would wish that diplomatic activity could have been enough to prevent the kind of incidents that so many Members are talking about this afternoon, but while they continue, so will we.
They say that the definition of insanity is doing the same thing over and over again and expecting a different result. Many of us feel that way about these statements, and surely the Minister must be starting to feel that way, too. He must recognise that the E1 settlement would represent the final and complete collapse of any British strategy in Israel and Palestine, and would have wider ripples, in terms of our standing in the world. Surely it is incumbent on him to change his modus operandi. Over the last two years of savagery, we have had meagre measures—talk, talk, talk, from both this Government and the previous one, frankly—and none of that has had any impact on the conduct of the Israeli Government. Surely now is the time to lay out exactly what the consequences would be for the establishment of the E1 settlement in plain terms, so that there is a hard red line, and the Israelis can make a judgment about whether they want to cross it.
I gently disagree. I feel that there is some force in what the right hon. Gentleman says about insanity being doing the same thing again and again. We have had many exchanges of that nature. Over the course of two years, the British Government have taken a whole range of steps. We have talked about recognition and sanctions—
None of them has had any impact; not a single thing has changed.
Returning to the question about the consequences for the Israeli Government, we could not have been clearer, alongside 11 other world leaders, about what they would look like. I say gently to the right hon. Gentleman that the range of actions taken by the Government that I am a part of was absolutely unthinkable to him when he was sitting on the Government Benches. Recognition, suspension of—[Interruption.] We have done it; you did not.
Order. I know that this is a very sensitive debate, so let us make sure that we keep our emotions in check.
Israel’s illegal expansion in the E1 zone of the Occupied Palestinian Territories is a clear breach of international law and makes a viable Palestinian state impossible. Does the Minister agree that that is nothing short of ethnic cleansing, and that the Government should do everything in their power to prevent that from happening by sanctioning all British companies complicit in the expansion, bringing an end to the import of settlement goods, and establishing a full arms embargo?
I have set out as clearly as I can our position on the E1 settlement. I have also been clear that no one should be profiting from unlawfully seized land.
The expansion is yet another egregious violation of international law, and as expected, the UK Government have unequivocally condemned it, but the problem is that, as Tel Aviv understands it, condemnation from the United Kingdom is pretty meaningless and largely consequence free. That is a position that simply cannot hold. Will the Minister lay out what the consequences will be for the state of Israel of its actions, and for any UK company that seeks to involve itself in the illegal expansion into the E1 zone?
I gently push back on the suggestion that what we do has no consequences. I have been pleased to see, as I said to the Liberal Democrat spokesperson, that other partners and allies have taken the actions that we have. There are consequences for Israel, in terms of its position in the world, when it alienates as many of its friends and allies as it has. We have set out as clearly as we can, both for companies and for the Israeli Government, what our views on the E1 settlement are. We did that at head of Government level last month. That statement has been seen widely around the world. I cannot guarantee to this House that people will take heed of the statement, but we have set out our position in exactly the way that the hon. Gentleman requests.
I have joined other MPs in visiting the west bank and East Jerusalem. This mega development, this zonal occupation, is huge in scale. It involves a massive city, a dual carriageway, universities and hospitals, and it is absolutely undermining the peace of the two nations. I ask the Minister: what more can be done at international level? What is being done by our mission in the United Nations to bring in international sanctions, working together? Can he also tell us more about what is being done with America? This is being done with its blessing, support and money. What more can be done to get a change of pace, and to ensure that a different envoy goes in from America to sort out peace in the middle east?
I will not speak for the American Government; they have set out their position on their concerns about annexation quite clearly. We have discussed throughout this afternoon just how significant the E1 development would be, and I think that that is understood in Washington DC.
I share the Minister’s frustration about our appearing to be on the sidelines as this Israeli Government divide up the west bank, making a two state solution nigh on impossible. What is happening is contrary to the fourth Geneva convention, Oslo II and all the rest of it. However, does he agree that his capacity to influence what is happening is finite? If Israel, under Netanyahu, is not listening to the Trump Administration, it almost certainly will not listen to the Administration that the Minister is part of. However, he can do something in this awful situation: he can at least protect those in this country who will suffer the consequences of what is happening in Israel and the Occupied Palestinian Territories, who are the butt of a lot of the violence in this country, namely the Jewish community. What will he do to ensure that they do not suffer the consequences of what is going on?
I thank the right hon. Gentleman, my predecessor, for his question, and for the opportunity to comment on antisemitism. Before I do, I just want to say that this is a delicate period in Israeli politics. I hope the result of the Israeli election will be a set of Israeli policies that are much closer to the wishes of this House. He is, of course, right to say that my ability to influence developments on the ground is finite—if it were not, we would not be in this situation—but we will continue to use all our leverage to try to ensure change. During this period, we can perhaps hope that the Israeli political process will deliver results more akin to a policy that this House would like to see.
I echo the frustration that we all have, and I want to live long enough to see Netanyahu before a criminal court. When we raise individual cases, it is frustrating to not know whether it will have any effect, but sometimes it can have the effect of letting people know that they are not forgotten. Part of the annexation of the west bank has been about the arrests of individuals, and one of them is Dr Mazen al Rantisi, known as the doctor of the poor. Can I ask the Minister to raise his case with the Israelis? Could he also raise another case that we mentioned some time ago—that of Dr Hussam Abu Safiya, who has been in isolation for 500 days? If we could raise those cases, at least their families would know that they are not forgotten.
We have, and we will.
All this hand wringing over the E1 zone is very important, but in reality what is happening is part of the greater Israel plan. Israel already controls 70% of the Gaza strip; it is squeezing the whole population into the sea or into Egypt. It is already supporting, by military means, all the activities of the settlers, their abominable behaviour towards Palestinian people, and the construction of massive settlements all over the west bank. In reality, it is Israel’s strategy, Israel’s plan and Israel’s determination that we are up against. Merely condemning Israel for this occupation of E1 will achieve nothing. There has to be a policy of stopping all arms trading and military co operation of any sort with Israel until it ends this settlement policy. Anything less will just be hand wringing that the Israeli Government will ignore.
I do not think the policy of settlements is supported across the whole of Israel. That is very clear in the discussions about the coming elections. There are many voices in Israel who recognise the terrible harm being done to the state of Israel by the expansion of settlements. I hope you will forgive me, Madam Deputy Speaker, if I come back to the point about antisemitism. We must be really careful in our language. There are many, many Israelis—and indeed many, many British Jews—who can see the terrible damage being done by violent settlement, and we must not tar communities in this country or the whole nation of Israel with the same brush. I am grateful for the opportunity to return to the point raised by the right hon. Member for South West Wiltshire (Dr Murrison).
First, may I thank the Minister most sincerely for his statement? His is not an easy task. Eileen and Catherine from Bury St Edmunds lobbied me here in Parliament yesterday, for they feel very deeply about the plight of the Palestinians, as do we all. They asked me what we in this House could do to influence the Government of Israel. I believe that we must support progressive voices in Israel, for this is an election year. Does the Minister agree with me?
I do agree, and I pay tribute to my hon. Friend’s work. I know he has been an active voice on these questions and that he sought to visit Israel to engage with those progressive voices. More fool Israel that it did not allow him in.
The Minister has one of the toughest jobs in Government, and he carries out his duties with diligence, courtesy, reasonableness and ability. I wish him well in whatever the future holds, and I hope he retains his post. Members on both sides of the House have rightly highlighted the illegality of settlements and rightly expressed support for a two state solution. However, it was reported that on approving the E1 zone development last year, Israel’s Finance Minister said that it would “bury the idea of a Palestinian state”.
Will the Minister unequivocally reiterate his full condemnation of such a statement and approach?
I will, and I thank the right hon. Gentleman for his courteous words.
Before I start, I thank the Minister not only for his statement but for his robust response to the Opposition Front Bench, whose response was appalling. The E1 settlement plan deliberately cuts the west bank in two. The escalating violence and expansion of illegal settlements not only undermine the viability of the Palestinian state but fly in the face of international law. This is not by accident; this is by deliberate design. Will the Minister outline how exactly the Government can guarantee that illegal settler activity is not supported by UK registered businesses, charities or trade, and how we will hold them to account if they ignore the guidance set out?
My hon. Friend has been a doughty advocate on these questions for many years, and I was pleased to join her to meet students from Gaza earlier this week. We will take steps to ensure that the UK is not in any way involved. Legitimate trade with green line Israel is, of course, permissible, but when businesses in this country trade with the occupied territories and seek to make a profit from land that has been unlawfully procured, we will take action.
Build E1, kill the prospect of Palestine. It is that simple, and that is not a conspiracy theory; it is Israel’s stated aim. We have a small window to affect what happens next because the Israeli elections are happening soon, as the Minister said. If we are going to make any difference to the ordinary Israeli politic about who they decide to elect, we need to act now and turn this on its head. He talks about the technicalities in banning trade with the illegal settlements. I have laid a Bill that makes it quite simple: prohibit it now, put the onus on the Israeli Government to sort it out, and if they change their policy, we will change ours.
I thank the hon. Lady for the question. I can reassure her that I am very conscious of the electoral timeline and the rumoured timeline for the tenders as well. That is one reason we have set out the statements that we have on the timeline that we have.
As co chairs of the Britain Palestine all party parliamentary group, my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) and I have written to over 43 organisations that have, or are suspected to have, previously been involved in unlawful expansion in the occupied territories. That was to warn them of the potential issues should they try to bid for these tenders. We have also been in contact with counterparts in Europe and Australia who will be doing a similar thing, and we hope that Members in the New Zealand and Canadian Parliaments will follow suit. On what the Government can do, the Minister has mentioned monitoring. Have the Government written to these entities, not just made a statement, to make them aware of their responsibilities? What will the Government do if they are found to bid for these tenders?
I have set out the statement we made last year and the intensity of focus we have on these issues. I wrote to the Advertising Standards Authority following concerns raised in many places, including in this House, about an event some weeks ago, and have indeed engaged with the Charity Commission following concerns being raised.
Frankly, I despair. I have lost count of the number of times that I and others across this entire House have come here to press the Minister to put in place a full ban on settlement trade and the number of times he has prevaricated. I have lost count of the number of times that he has wrung his hands, made statements of concern, expressed worry and condemnation and yet refused to do what he claims he will do, because he has talked about acting with alacrity and using all the leverage we have, and yet he does not. If E1 goes ahead, that will be the death knell for the prospect of the Palestinian state that he, all Labour MPs and so many of us are so proud of this Government for recognising last year. It is, however, worth nothing if he does not follow up with action and use every lever in this Government’s power to follow through, to put pressure on the Israeli Government and to ensure that the rights of Palestinians are upheld.
The hon. Lady is right: we have had many exchanges across the Dispatch Box. I gently remind her that over the course of these exchanges, I have recognised the Palestinian state; I have sanctioned Israeli Ministers; we have restricted arms sales; and we have led statements repeatedly on these issues. I understand that we are all appalled by the violence that continues, but that does not mean we are not taking the action that we can—
You’re not doing everything!
And no doubt you can set out your own proposals. We have taken repeated actions and will continue to do so.
“You” and “your”—the best thing to do is always speak through the Chair. That prevents that mistake from happening.
Building on the question asked by my hon. Friend the Member for Bury St Edmunds and Stowmarket (Dr Prinsley), what more can we in this House and this Government, and other Governments around the world, do to make it clear to those many Israelis who are appalled by the behaviour of this Israeli Government that a two state solution and a viable Palestinian state are very clearly in their interests, and furthermore that we will do everything in our power to ensure that that state becomes a reality and is safe and secure, just as we want Israel to be safe and secure?
Madam Deputy Speaker, let me beg your forgiveness for forgetting the customs of the House—you would think that practice would make perfect.
I thank my hon. Friend for the question. All of us, particularly in election year, need to be reminding all our friends in Israel and all the politicians of the importance of the points that he makes.
All settlers are criminals— not just those who are violent—because they occupy land that does not belong to them. Since the late ’90s, successive Governments have called the E1 a red line because it would permanently divide the west bank and destroy the possibility of a Palestinian state. Meanwhile, more than 700,000 settlers now live illegally over 140 sanctioned settlements and 100 unsanctioned outposts in the Occupied Palestinian Territories, and settlements continue to expand while Palestinians continue to be forcibly displaced. The International Court of Justice has made it clear that states must not assist in this unlawful occupation. Is the E1 finally the moment when this Government will match their words with action, or will this simply become another so called red line that Israel crosses without consequence?
I have tried to be as explicit as I can be about the potential consequences, while abiding to the long standing position on sanctions.
I will not ask the Minister to comment on future sanctions designations—I understand he cannot do that. I want to ask him about something different: the scope of the multilateral statement. He will be well aware that the statement did not specify just one type of firm—for example, construction firms; it talks about involvement. Can he confirm that it is the UK Government’s view that the scope of that statement, following its wording, is not restricted to construction firms, but could cover, for example, firms financing this? Can he confirm that there is no prima facie restriction within that statement?
The statement was signed by 11 countries. We all have different arrangements and different tools at our disposal. The British Government’s position is that we oppose any involvement of any kind in the E1 settlement. Given the magnitude of the consequences of the E1 settlement, we would consider that in a broad way, not a narrow way.
I think I heard the Minister say a few moments ago that he hoped the outcome of the Israeli election would be a policy more amenable to British Government policy. May I just clarify that he, as a Minister of the Crown, is suggesting that the British Government would like Netanyahu to lose that election?
It is obviously not appropriate for me to set out who should win an election in a fellow democracy. What I can set out is British Government policy and what we would wish to see from Israel. We have been very clear over an incredibly long period of time about our views on a two state solution, about the conduct of the war in Gaza. It is not for us to set out who should win the Israeli election. It is perfectly reasonable for us to set out what we would wish the policy of the Israeli Government to be in relation to these questions after October.
I thank my hon. Friend the Member for Warwick and Leamington (Matt Western) for securing this question. I, too, attended the visit to Israel and Palestine last month. The scale of the E1 settlement, as has been described, is massive, but just as insidious is the trend, which has been going on for a long time, of Israeli settlements surrounding Palestinian villages across Palestine and cutting those villages off from vital services such as water and other utilities. Also in the ranks of the insidious actions of the Israeli Government is the fact that they demand that taxation from Palestine must go through Israel and then be repaid to the Palestinian Authority. That money accounts for some 70% to 75% of the Palestinian Authority’s revenue. No money has been paid since May 2025, which perhaps explains why they cannot do all the things that the Opposition would like them to do. Is that an area we can put pressure on to ensure that the Palestinian Authority has its own revenue, which it is entitled to, to do its work?
I thank my hon. Friend for the question, and I know that she has been a doughty supporter of some of the Gaza students who were relocated to her constituency. She is right to raise the financial pressure that the Palestinian Authority—and the whole of the economy of Palestine—are under as a result of this dispute about correspondent banking. We have raised this repeatedly and will continue to do so. The economic viability of Palestine is vital.
The E1 zone expansion is a deliberate attempt to do away with any hope of a two state solution. The FCDO’s unit tracking the Israeli Government’s breaches of international law was closed earlier this year, in April. I am glad, of course, that the Government recognise the state of Palestine and for the moves they have taken so far, but surely the very least this Government’s watching brief can do is to be willing and able to track atrocities of their own initiative and to come to their own conclusions.
I am pleased to confirm to the House that the unit was not closed—it was moved. The function remains within the Foreign Office and we still receive assessments. There has been some reorganisation within the Department—I was surprised that excited as much interest as it did—but I can confirm that the function remains and the unit was not closed.
Advice to UK businesses and complaints to Israeli Ministers are not just inadequate but create ambiguities, because they suggest that the UK Government are prepared to speak but not to act. When Netanyahu previously threatened the annexation of parts of the west bank, we made it clear what the consequences would be. Will the Minister do the same now, and say that in the event of any move towards E1, there will be a comprehensive trade and investment ban?
I do not think I can go further in response to my hon. Friend than I have already. We have been clear at the highest possible level, in the voice of our Prime Minister, about the seriousness with which we take this issue, the breadth of concern that we have and the consequences that are likely to follow. I cannot spell out those consequences for reasons I have already alluded to, but I reassure him that we treat this with the seriousness that it deserves.
Yesterday, a group of us met with non governmental organisations and heard about how the settlers are physically surrounding Palestinian homes and schools, with properties built on every side of homes, schools and sports pitches, making it impossible for children to get to and from school. In one case, we were told that the only way to reach a school was via the back stairs of a residential property. All the settlements are illegal and we must focus on the building of E1 to prevent expansion. In an election year, the UK has an additional influence on Israelis who also abhor this illegality and violence, so will the Minister consider a full travel ban on all settlers to show that there are real consequences for illegal activity?
I have spoken myself to schoolgirls impeded in their day to day lives. We have taken four waves of sanctions sanctions against settlers, recognising the severity of the situation, and I have been clear that while the situation continues to get worse, we will continue to act.
With every expansion of Israel’s illegal settlements and with every horrendous act of settler violence, the prospect of a two state solution recedes, and my constituents in Newcastle upon Tyne Central and West lose faith in the capacity or the will of the rules based international order to deliver some measure of justice for Palestinians. The Minister and I have corresponded about what we could actually do in this country, so does he agree that regardless of the technical issues that he has outlined, as a matter of principle, goods from Israel’s illegal settlements should not be traded with the United Kingdom?
Goods produced in illegal settlements should not be traded with the United Kingdom. We distinguish them clearly from goods produced in green line Israel. I have said repeatedly that no one should benefit from a profit made on land that has been unlawfully procured.
No one doubts the Minister’s commitment to bringing about change. Those hon. Members who have consistently stood up as firm friends and allies of Israel recognise its absolute right to defend itself and secure its borders. However, as someone who represents a deeply rural constituency with a strong tradition of family businesses and farming, I know that land is not a political commodity; it is a livelihood. In the E1 corridor, any unilateral land grab will disrupt centuries of agricultural practices and cut off traditional grazing routes. When farming infrastructure and small businesses are dismantled or isolated by expansion, local economies collapse, leaving families with no means of self sufficiency. Will he Minister take time to convey those concerns to our ally and friend, and ask for immediate reconsideration of this action?
The hon. Gentleman makes an important point and raises a concern that many across the House have raised about the huge disruption to long standing agricultural practices caused by the expansion of settlements.
The Government have said that they advise British businesses against involvement in illegal settlements, and this week they warned companies not to bid for the E1 contracts. Given that settlement expansion continues unbated, with properties recently promoted in London, over and above sending in the Advertising Standards Authority, will the Government confirm that they are working with UK regulatory bodies and will ensure that existing sanctions and anti money laundering and proceeds of crime powers are used to prevent and to punish UK financial and commercial support for and involvement in illegal settlements? We have the criminal powers, so if the Minister wants to take action, will he explain why they are not being used?
My hon. Friend asks me about the use of the Sanctions and Anti Money Laundering Act 2018. That is obviously the basis on which all the Foreign Office sanctions are made. For the reasons that I have set out, I will not say anything further about sanctions from the Dispatch Box. We have done four waves and we have been clear today, as we were last month. In relation to the expo he refers to, I can clarify that it is legitimate to sell real estate within green line Israel in the UK and to advertise that, but it is not legitimate to advertise illegal settlements. That is why I wrote to the Advertising Standards Authority following that expo.
Businesses trading with unlawful settlements can be under no illusion that the settlements are unlawful and that the majority of Members of this House view them as utterly morally repugnant. Nor can they be under any illusion that the UK Government’s position is that people should not trade with unlawful settlements. I urge the Minister to act swiftly on this and to leave no stone unturned in ensuring that clever legal arguments around retrospectivity—because any measures will come in after the Minister’s clear statement—are closed off. Will the Minister consider primary legislation to ensure that those engaging in this morally repugnant trade are closed off, even if they enter into contracts today and legislation is passed in two months’ time?
I hesitate to commit the Government to primary legislation. The Sanctions and Anti Money Laundering Act has been sufficient for the four waves so far, but I have heard my hon. Friend’s important points.
These settlements are not “unhelpful”, as the Opposition have claimed today; they are illegal. My constituents and I are horrified by the ongoing settler violence and the expansion of these illegal settlements. In that context, I welcome the Minister’s clear condemnation and the further actions he has committed to today. Will he assure me and my constituents that his Department is working with Treasury colleagues to fully map and understand the exposure of UK financial institutions to the financing of illegal settlements, their expansion and trade within them? When his Department and the Treasury understand that, are they committed to taking action against those institutions?
I thank my hon. Friend for his commitment to these issues. I know that the people of Uxbridge have raised them with him many times and he has not failed to reflect that to me. We are taking actions in the way that I have set out, and I expressed the range of concern that we have about financing for the settlements in my answer to my right hon. Friend the Member for Oxford East (Anneliese Dodds).
I express my concern about the tone taken by the shadow Minister at the beginning of the urgent question. Netanyahu could not have been clearer about his point of view that there should not be a Palestinian state, and the plans for the E1 area near East Jerusalem are just the continued manifestation of the intention to entirely destroy the viability of a Palestinian state. Taken together with clear evidence of war crimes, it is obvious to all that this Israeli Government are not serious about a sustainable peace for the region. As hon. Members have said numerous times, I fear that Netanyahu is pressing ahead with this in order to shore up his support ahead of critical elections that could see fresh leadership in Israel, which we would all like to see. Will the Minister tell us a little more about what steps he is taking with allies to keep the two state solution alive? What sanctions and penalties might be imposed should these settlements proceed?
I agree with my hon. Friend about the response of the Opposition. This is a particularly critical year. It is critical for us all to engage with the full breadth of Israeli politics and society to encourage Israelis, alongside our allies, that there is a better way for the state of Israel and the state of Palestine, and that will be a focus until that election.
Since we rightly recognised the state of Palestine, I put it to the Minister that actually nothing has changed. The settlement expansions are ongoing, as are the land grabs and ultimately the ethnic cleansing of Palestinian people. The cultural, economic and educational genocide inflicted on Palestinians carries on regardless.
For years, we have seen what drives Benjamin Netanyahu—what his ultimate goal and ambition is—and that is the eradication of Palestinian people and of Palestine. My fear is that diplomacy once again will fail. What will the UK Government do to stop the eradication of Palestine and the Palestinian people?
We will do everything we can. I have set out some of the steps taken so far, and I will not hesitate to return to this House as and when required.
I hope I am not alone in knowing that the vast majority of ordinary Palestinians and Israelis want peace. As an optimist, I hope that they vote for it when they get the chance later this year in both Palestine and Israel.
It is clear that the consensus here is that this expansion would be a bad idea—it would be illegal and bad for any hope of peace in the future—but what about the existing settlements? How do we consider them? I know that the Minister has talked about trade, but what about their actual existence as a barrier to peace? Are the Government raising that with Netanyahu’s Government?
We consider those settlements to be illegal, and we are clear with the Israeli Government that that is our position.
I echo the concerns of colleagues from all parts of the House on the E1 settlements. If they go ahead, they will clearly destroy the viability of a Palestinian state. That is not a commentary; as has been said, it is a stated aim.
To build on the comments of my right hon. Friend the Member for Oxford East (Anneliese Dodds), may I encourage the Minister to do whatever he can to emphasise to the business community not just in this country, but across the world, that involvement with these settlements is morally bankrupt? The public will not tolerate it, and we need to do everything we can to stop British business being involved in this morally repugnant trade.
That was one of the reasons why we set out even clearer business guidance to our own businesses, and I am sure that many others will have taken notice.
I welcome the Minister’s strong condemnation of the annexation of land in Gaza and the west bank. What reassurance can he give to Members of this House that no military components that we have sold to Israel—not just bombs and bullets—have been used in this further illegal settlement expansion?
It is important to say that at the moment, the E1 is going through a tendering process. There are not yet spades in the ground, but that is what we must seek to avert. That will be a focus of our diplomacy, as it has been since the most recent announcements by Prime Minister Netanyahu in September 2025 of his intention to go ahead. As many Members have said over the course of this afternoon, we have a window before October, and we intend to use it.
I welcome the opportunity to update the House on the reforms that Flood Re is announcing today, with the support of this Government. The changes will ensure that Flood Re remains fair, sustainable and focused on those who need it most, while supporting a transition to a more resilient insurance market by 2039.
Flood risk unites Members across this House. We all recognise the devastating impact that flooding has on people and communities and the importance of having access to affordable insurance. That is why this Government have put a record amount of investment into flood protections and simplified the funding rules. This year alone, we have unlocked £1.4 billion to enhance flood resilience across England, funding more than 600 projects and better protecting more than 70,000 properties from the devastating impacts of flooding. Despite that record investment, flooding is an ever increasing risk.
Flood Re was established to manage a transition to prices that better reflect underlying flood risk and promote the affordability and availability of insurance. Since its launch, Flood Re has been a big success, and it is a strong example of Government and industry working together to address systemic risk—a partnership that started to be strengthened under a Labour Government after the 2007 floods.
Flood Re works by receiving a subsidy paid for by households that buy insurance. That money is used to purchase insurance so that households that would not be able to get insurance in an open market have affordable premiums. However, the context in which Flood Re operates has changed; rising claims, higher reinsurance costs and more properties being identified as at risk are placing increased pressure on the scheme.
We now have a perverse system in which money collected from all insurance customers, from all parts of the country and all income brackets, is flowing to the richest households in the country. That is not fair and needs to change. In three of the last four years, Flood Re has spent more on repairing homes in the most expensive council tax bands of G and H, which make up less than 4% of UK homes, than it has spent on repairing homes in council tax bands A and B, which make up around 45% of homes.
Let me give an example that shows why change is necessary. In 2025 a property near a river was flooded, resulting in a claim cost to Flood Re of more than £3 million. The property had very limited flood resilience measures in place, and the claim covered extensive restoration costs, including a quad garage, an indoor swimming pool, a jacuzzi and gym, a music room and den, a machinery storage unit, an outdoor astroturf padel court, and a five a-side football pitch.
It is right that all properties are insured, but without reform of Flood Re, we will continue to have a system in which average income and low income households are subsidising flood insurance for the richest households in the country. That is why reform of Flood Re is needed—not to set a new policy direction, but to restore it to its original purpose. That is what we are doing.
First, Flood Re will work with insurers to reform its premium model so that support is better targeted. It will aim to make premiums as fair as possible across different council tax bands, regions and areas. Secondly, Flood Re will introduce a cap on the claims that insurers can pass to it, limiting payouts to an agreed level, with insurance companies covering the remainder. That will be worked out with Flood Re and insurers.
Thirdly, I have spoken to people who have lost everything through flooding and have been unable to afford contents insurance, so I am delighted that Flood Re is more than halving the premiums it charges to insurers for contents only insurance for the 45% of homes in council tax bands A and B to £25 a year from April 2027. This Government are restoring fairness. We are making insurance affordable and helping with cost of living pressure. Finally, Flood Re will improve efficiency, make better use of its resources and reduce reliance on costly reinsurance while maintaining financial resilience.
However, to protect all homes from ongoing flood risk, we need more than just floor insurance and large flood defences; we need individual homes to become more flood resilient. That is why Flood Re will work with insurers and lenders to introduce flood performance certificates, helping households to better understand their flood risk and ensuring that if they take actions to make their homes more resilient, that is reflected in the cost of their premiums. That builds on the work of the recommendations in the “FloodReady” report. Flood Re will also strengthen incentives for Build Back Better, a UK home insurance sector initiative that, instead of simply restoring a home to a condition exactly as it was before, allows an additional £10,000 as part of the insurance claim to improve the flood resilience of the home.
These reforms will be implemented from 2028, with the reduction in contents premiums for council tax bands A and B taking effect from April 2027. Flood Re will keep the scheme’s eligibility criteria under review, including how it applies to leaseholders.
Under this Government, more homes are better protected from flooding than they were when we came into government. Our country will become more resilient to flooding as homes are incentivised to take action with flood performance certificates, and the 45% of people living in average income and low income households will be able to afford to protect their homes from the devastation of flooding. That is the difference that a Labour Government make, and I commend this statement to the House.
I call the shadow Minister.
I thank the Minister for advance sight of her statement, and for our recent conversations about flooding in Somerset.
Flooding is a huge challenge for areas across the country. Some 6.3 million properties in England are currently located in areas that are at risk of flooding, including many in my constituency. When floods occur, the Environment Agency, local volunteer groups and farmers work to help people quickly, often in difficult circumstances. I was humbled and deeply proud to see the way the community pulled together in affected areas during the flooding earlier this year, particularly in Moorland and Fordgate. The Minister knows how seriously I take flooding, and has engaged with me following my requests for stronger national support, clearer local responsibilities, more dredging and improved pumping capacity.
The previous Conservative Government took real action to prevent flooding and protect homes and businesses, ensuring that over 600,000 properties were better protected from flooding and coastal erosion. Between 2015 and 2024, over 900,000 acres of farmland were also protected. In 2020 the previous Government announced a doubling of capital funding for flood defences in England, which rose to £5.6 billion from 2021 to 2027.
Flood Re was set up under the former Conservative Government, and it remains an important scheme to promote the availability and affordability of flood insurance for eligible homes. Its recent accounts report contains serious warnings for Ministers. Flood Re is clear that “the external environment has changed materially, with higher climate driven loss volatility, tighter global reinsurance capacity and greater pressure on affordability.”
It says that the scheme is now retaining higher levels of risk and facing “increased liability exposure”. At the same time, Flood Re warns that the scheme is under structural pressure. Its board has said that improved flood mapping has led to “more properties being classified as high risk…including a growing number of higher value homes”, and that without change, the scheme risks being asked to carry “unsustainable levels of exposure and cost.”
As such, will the Minister please explain what steps she is taking to ensure that Flood Re’s growing pressures do not result in additional costs for households through higher insurance bills? Will Ministers bring forward a credible, long term flood resilience plan? Do the Government have plans to include businesses in Flood Re? What assessment has the Department made of the impact of these changes on households that are asset rich but income poor, including pensioners living in higher band homes in flood risk areas? In her statement, the Minister said that Flood Re would reform its premium model across council tax bands and regions. Will she publish the modelling behind those changes, including regional impacts, so that households can see what this means for them? Flood performance certificates may help households understand risk, but will the Minister confirm who will pay for them? Will they be mandatory, and will they affect mortgage availability?
Flood Re has done valuable work, but households continue to need affordable insurance. They also need a Government who are serious about flood prevention, resilient homes, and long term protection for communities. Conservative Members will always work with the Government to ensure that every person living in a property that is vulnerable to flooding gets the support they need.
I thank the hon. Gentleman, and I recognise his commitment to flood protection. He referenced our meeting, at which we discussed the £50 million that we are putting into Somerset because of its particular landscape and challenges. He is right to highlight the accounts that Flood Re has produced; without reform or change, we would be in a poor situation. Flood Re has been an amazing success, but to continue for the next 10 years, it needs to change. That is why we are introducing the changes that I have mentioned: targeting those who most need support by introducing a cap, making contents cover cheaper for lower council tax bands, and the work on the premium model. One of the other changes, which is probably not as eye catching, is allowing Flood Re access to some of its trapped capital to make reinsurance costs cheaper. All of the reforms that Flood Re is introducing are intended to ensure that it is sustainable and keeps going.
Turning to continued support for flood protection, the hon. Gentleman will know that we have put the most money into flood protection of any Government ever, with £10.5 billion committed for the next 10 years. There are no current plans to include businesses because, as I said, Flood Re works by levying every insurance company; if we were to include businesses, we would be levying every business in the country to pay for it. For people in the top council tax bands, we are looking at flood performance certificates, so that if they can take action to improve the resilience of their home, that will be reflected in their premiums. We are doing some pilots, and I have been pushing insurance companies and others to get those pilots out the door as quickly as possible. We are not just looking at the top council tax bands; we are also looking at people in social housing to see how flood performance certificates could work.
As for when these changes are going to take place, contents insurance changes will take effect from 2027, but the cap will be from 2028. Up until that period, Flood Re will be carrying out extensive engagement with insurers and other people to make sure they are setting affordable limits. This is all about ensuring that Flood Re is there for the next 10 years.
I thank the Minister for her statement. The vital importance of protecting and insuring people against flooding is highlighted by the case of my constituents who live next to Thingwall allotments, where extensive surface water flooding has blighted their lives for four years. Residents of Abbeystead Road have been forced to continually use flood sacks, sandbags and pumps to protect their homes, and gardens have become unusable. I am particularly concerned about the welfare of elderly constituents in poor health and families with children. Despite my representations over the past four years, Liverpool city council and United Utilities have not resolved the issue; instead, the council is sending tankers to pump out the water, at what must be considerable cost. I have written to the Minister, and although I know she is extremely busy, will she meet me, residents, Liverpool city council and United Utilities to find a resolution once and for all?
My hon. Friend is right to highlight how difficult it is for people to continually have to take action, especially elderly people, as well as the mental health impact of thinking they are going to have to do something to try to protect their home every time it rains. I would be happy to help convene a meeting with all the relevant parties.
I call the Liberal Democrat spokesperson.
I thank the Minister for advance sight of her statement.
We Liberal Democrats support the Flood Re scheme and the protection it provides, but we are concerned that the package still risks falling short in a few ways. We agree that it cannot be right for lower income households to subsidise the most expensive properties. Targeting support more fairly is overdue, but fairness must also mean reducing costs at source, which means a far stronger focus on prevention. We are still spending billions reacting to floods rather than systematically reducing risk. Flood Re’s future must be tied more clearly to resilient homes, sustainable drainage, and a planning system that stops putting people in harm’s way in the first place. That includes progressing schemes such as Guildford’s flood alleviation scheme more quickly through greater Government support, which would protect homes and unlock sustainable brownfield development. Without doing this, we are merely rearranging who pays for failure.
The proposals on flood performance certificates and Build Back Better are welcome, but they remain incremental. We need a step change—embedding resilience upgrades as standard, ensuring that insurers reward households that act, and bringing lenders fully into the framework. Serious gaps also remain: millions are excluded from Flood Re, including many leaseholders and those in homes built after 2009. If we are serious about fairness, those gaps must be addressed.
Finally, the transition to a risk reflective market by 2039 cannot simply mean a cliff edge and higher premiums for those most exposed. Reform is needed, but it must be matched by ambition. Fairness, resilience and prevention must go hand in hand.
The hon. Lady is quite right to say that we need to take action on the risk of flooding. That is why this Government are putting the most money into flood protection and taking action against flooding of any Government ever. In our first year in government, we delivered 151 flood schemes, better protecting more than 24,000 homes; that was after we put £108 million into maintenance to restore and repair our flood defences, many of which were in a poor condition. We are also putting £300 million into natural flood management—again, the most money any Government have ever put in. We have put in another £30 million for coastal adaption, and we have reformed the flood funding formula to ensure that it gives proper weight to deprivation, so that the communities that are most affected by flooding and least able to recover have more support. Total funding for internal drainage boards is £91 million, so I think we have ticked the box for “Have this Government put their money where their mouth is when it comes to protecting our country from flooding?”
We have not only done that; we are also looking at sustainable urban drainage systems and at introducing flood performance certificates, so that we can reward homes that have become more resilient to flooding. We are also looking at a fundamental change to how we address resilience and flooding as a country. When flooding happens, the people who go out there and do the work in the communities—whether local people, the Environment Agency or all the emergency services—deserve our absolute support, because the only thing I cannot protect this country against is climate change.
I call the Chair of the Environmental Audit Committee.
The 500 households in Chesterfield that were flooded during Storm Babet, almost all of which were in council tax bands A and B, will welcome the Government’s intention to make sure that this scheme remains sustainable. It is important to remember that flood victims are just that— victims. They are not the cause of their problems; they are victims of our global failure to take the requisite steps on climate change, and of previous Governments’ and the water industry’s under investment in flood protection. The example that the Minister raised is obviously ridiculous, and there is a need for those at flood risk to take the action they can to protect their houses. What assessment have the Government made of how many households will see increases in their premiums as a result of the steps being taken? Can the Minister assure us that households will not be unable to get insured, leaving us in the position we were in before Flood Re existed?
I know how much my hon. Friend cares about this issue. Indeed, we have visited some of the areas in his constituency that have been flooded. I remember the devastating loss in his constituency prior to the election; he was out there on the frontline, helping to lead some of the flood recovery work.
On the impact of this change, we need to work carefully with insurers on Flood Re. We have said we will introduce the cap by 2028 to enable them to have the time to work through things carefully and properly. It is about fairness. Council tax bands G and H represent 4% of properties, yet they make up 20% of claims on Flood Re. We want to make this change in conjunction with insurers. Piloting the flood performance certificates will be so important, and that has to be done hand in hand with people. We want to incentivise people by saying, “If you take action to improve your home and make it more resilient to flooding, you will be rewarded with lower premiums.” We are trying to encourage people to do the right thing where they can, while recognising that there are people at other end of the scale—some of the people we have seen in my hon. Friend’s constituency—who are simply unable, for various reasons, to take action to improve the resilience of their own property. It is all about keeping things in balance.
In West Worcestershire we have the River Severn, the River Avon, the River Teme and many brooks, so flooding is a perennial issue. Over the years, we have built many new flood defence schemes. I thank the Minister personally for her role in the Severn Stoke scheme, which is currently under construction. Unfortunately, the Tenbury Wells scheme has been cancelled, and there will be individual property level resilience in that town. Does the Minister have any advice for the town council, which is unable to get any insurance now? Will she consider changes to the Flood Re scheme to enable properties that have benefited from flood resilience measures to get access to Flood Re for their insurance?
I am pleased to be responding to the hon. Lady, because I think that the very first Adjournment debate I had as a Minister was with her and it was about flooding. It is nice that whenever I make a statement about flooding, I already know who will be in the room. I commend her on her tireless campaigning on this issue and the commitment she has shown to her constituents. I have been pleased to go and see those property flood resilience measures and the difference they have made to communities. Flood performance certificates will be piloted, and those communities are an example of where householders have taken measures—albeit in this case through the Environment Agency—to better protect their homes from flooding. When people do that, it should be reflected in their premiums, and there is not currently a way to do that. The system looks at postcodes and areas, and gives people a premium on that basis, but we want to make it more intelligent, so that it can recognise if someone has made their home more resilient to flooding—that should mean that they have cheaper premiums.
The Minister will be aware that I spent most of my career supporting the most vulnerable people in communities that had been flooded, and helping them to find ways to support their mental health. It is not unknown for many of them to have post traumatic stress disorder post floods. That can be brought on by a number of triggers, including the sound of rain on the window or the anxiety of worrying about being able to insure a house post floods. The reduction of contents only insurance to £25 a year for bands A and B will be transformative. Does the Minister agree that it will make such a difference in helping lower income households and in ensuring that Flood Re protects the things that matter most to people?
I pay tribute to my hon. Friend, because before he was elected as a Member of Parliament, he was running part of the Living With Water project in my constituency, which looked at bringing together the Environment Agency, Yorkshire Water and the council to create more sustainable urban drainage to improve resilience to flooding. He played a tremendous role and has made a real difference to many people’s lives. I share his delight that Flood Re is more than halving the premiums it charges insurers for contents only insurance for the 45% of homes in council tax bands A and B to £25 a year. That will make a real difference to people’s lives, making insurance more affordable for everybody.
I commend my hon. Friend the Member for Bridgwater (Sir Ashley Fox) on his clear response to this statement. My constituents in Brook Drive, Ruislip and all across the floodplain of the River Pinn are very interested in this issue, so I will ask the Minister two questions. In a borough where a tiny fraction of properties are in bands A and B, there is a risk that this change means that the cost of insurance will no longer be priced based upon the risk incurred at that property, but upon its council tax band. That risks shifting the provision from being a premium to simply being a tax based on the value of a property, which clearly would not be welcome and was not the original basis of Flood Re. Can she give the House a clear assurance that the claims experience data gathered by Flood Re will then be used by colleagues across Government to feed into such things as planning regulations, so that flood resilience can be built in to homes in the future?
The original purpose of Flood Re was to make flood insurance affordable for people who otherwise would not be able to access affordable insurance on the free market. This is not new policy, but returning Flood Re to the purpose for which it was created.
I welcome the focus on supporting low and middle income households. The Minister will know that after the July 2021 floods in central London, denial of flood insurance or punitive excesses for people living in blocks of four or more flats has been a serious problem. That is a big chunk of my constituents. They cannot access Flood Re, because those properties are treated as commercial premises. What plans does the Minister have to address this issue?
My hon. Friend raises an important point. We are continuing to work with the Government, the regulator and industry to review the scheme eligibility criteria, including considering options to better support leaseholders.
Flood Re does need change. However, the Minister has not announced a key change that would make a difference for thousands of households in my North Norfolk constituency: establishing a “Coast Re” scheme for those homes at threat of erosion. They find themselves at huge risk and have no financial backing if the worst happens and they lose their home. My call is supported by the cross party report of the Environment, Food and Rural Affairs Committee. There is not much coastal erosion in Manchester, but can the Minister please make a pitch for “Coast Re” with her new boss in the coming weeks?
I thank the hon. Gentleman and the EFRA Committee for their work. He will have heard our commitment to the £30 million coastal fund, which is looking at what we should do about managing coastal erosion and the risks of coastal flooding.
I thank the Minister for her statement, and I welcome the work to make the scheme fairer and more sustainable. Can she say a little more about the measures under way to encourage rewilding, the planting of trees and other measures further upstream in river catchments, as well as measures to encourage all landowners to behave responsibly and to stop temporary dams from building up under culverts, bridges or in other locations where localised flooding might otherwise happen?
My hon. Friend knows that I share his love of nature based solutions and natural flood management, so he will be as delighted as I am that we are putting a minimum of £300 million into natural flood management under our current plans.
I think this is an important moment for us to remind all our constituents to check their insurance policies and make sure that they have sufficient cover, but on a practical note, may I ask whether the Minister expects the flood protection certificates to have the same status as energy performance certificates? Obviously that encourages improvement, but there may be a problem of stranded assets. I just want to be sure that we have thought about the impacts on the housing market and on social mobility.
The hon. Lady is quite right. People should not only check their insurance to make sure that it covers everything, but check to ensure that they are covered for Build Back Better, because not every insurance company offers that cover at this moment. We will be piloting flood performance certificates as soon as possible, and as soon as they are ready I will be more than happy to update the Environment, Food and Rural Affairs Committee with more details of exactly how this will work and where.
There were serious floods in Ruislip Gardens in 2024, which I have discussed with the Minister before; 100 homes were flooded, and access to ongoing affordable insurance was a major concern for many residents. Part of the flooding review recommended improved individual householder resilience measures, and I welcome some of the measures announced today to incentivise that—such as the flood performance certificates—but according to feedback that I have received, it can still be very expensive for cash poor individuals to fund them up front. What options are being explored for access to affordable finance, and what other measures are being considered that might make this possible?
I well remember very well my hon. Friend raising the issue affecting his constituency. Let me reassure him. The flood performance certificate pilots will include social housing and lower income communities, as we recognise that some will need support to increase their resilience. We are piloting the certificates across a range of different homes so that we can gather that intelligence before we decide what further steps to take.
Ilminster residents, like Krystal, who have houses on floodplains tell me that they cannot obtain insurance, although people living up the road can. The Minister has confirmed that the eligibility criteria remain under review. Will she commit to reviewing the exclusion of homes built after 2009, and will she also undertake to make the whole process fairer, so people like Krystal, throughout my constituency, can obtain affordable insurance?
I recognise how difficult it is when people cannot afford insurance. There are no current plans to look at homes built after 2009, but of course the Government always keep everything under review.
The Government have invested £45 million in flood defences in York. That will provide resilience until 2039, which coincides with the ending of the Flood Re scheme. It is important for us to think about how, in the longer term, we will support people with that risk sharing approach. Will the Minister also consider and consult on the position of leaseholders, who are excluded from the scheme although they have responsibility and pay the costs for their own personal buildings?
I thank my hon. Friend for recognising the money that we are investing in York, not least owing to the formidable campaigning that she has undertaken for a long time, and also for identifying the need to look at the longer term. Of course Flood Re will continue to look at eligibility to ensure that it is acting according to the principles on which it was set up, to ensure that there is affordable insurance for all who need it.
I welcome the work of Flood Re. Later this month, I will be hosting its Floodmobile in my constituency, where 13% of properties are already at risk of flooding. However, according to experts at Flooded People UK, our capital spending on flood defences and maintenance is not at record levels; in fact, it is actually lower than the annual rates in the previous capital spend. Will the Minister commit herself to protecting households in all our constituencies, and to increasing the spending commitments above the level in the 10-year infrastructure plan?
I do not recognise the figures that the hon. Gentleman has given. This Government have put more money into flood protection than any other Government on record: that is an absolute and indisputable fact. However, I do hope that he has a great time when the Floodmobile visits his constituency. It is fantastic, and demonstrates real, practical examples of ways in which people can take action to improve their flood resilience.
Residents of Catcliffe and Treeton in my constituency have suffered two devastating floods in the last decade or so. That means that, even if people are eligible for insurance from Flood Re, it is extremely expensive, and in some cases prohibitive. Can the Minister reassure us that that will not apply to, in particular, low income householders, and that they will be able to obtain insurance? Let me finally put on record my gratitude to the volunteer flood wardens who, every time it rains, try to keep their communities safe.
I echo my hon. Friend’s gratitude to flood wardens and volunteers all over the country, and I know how much this issue means to her. I am delighted that Flood Re is halving the premium that it charges for contents only insurance for the 45% of homes in council tax bands A and B. It will be reduced to £25 a year from April 2027, which will make a huge difference to the cost of living.
Might the Minister be able to say a few words about the increased number of flooding episodes in urban areas, especially those containing basement flats? My constituent Jackie ended up being done by her insurance company because its representatives could not make up their minds whether it was a storm or a flood. There was too much small print. The ombudsman could not stand up for Jackie, and she ended up £2,500 in the hole. I wonder whether Ministers could remind insurance companies of their duty not to lead people up the garden path, and to pay out when they should.
The hon. Gentleman is absolutely right: flood insurance companies should behave with integrity towards their customers. If he would like me to follow that up with the Association of British Insurers, I would be happy to do so.
I welcome the statement, and thank the Minister for her work. She has rightly observed that people are more likely to be at risk of flooding because of climate change, and that also brings with it a greater risk from coastal erosion. As she will know, my constituency lost 11 homes over the winter because of coastal erosion, which is set to put even more homes at risk over the years and decades ahead. In our report, the Environment, Food and Rural Affairs Committee recommended the extension of Flood Re to Coastal Re. Will the Minister comment on that recommendation, and commit herself to looking at it further?
I know how difficult the loss of those homes has been for the hon. Lady and her constituents. Losing one’s home because of coastal erosion must be devastating. There are no current plans to consider Coastal Re, but, of course, Flood Re keeps eligibility criteria under review.
In September 2024, my constituency experienced a month’s worth of rainfall in 36 hours, which led to the inundation of many homes. A constituent in Woodstock has described how her house and her annexe—into which she had poured her pension to convert it to a holiday let—were inundated. She is now unable to obtain any kind of insurance, including Flood Re insurance. She wrote this to me: “ I am terrified to think about any rainfall that could damage my home and business again.”
Will the Minister look at that case, and at Flood Re eligibility for those at risk of surface flooding—as distinct from river flooding—and those whose business premises abut their homes?
The hon. Gentleman is right to raise the concern about surface water flooding, which, owing to climate change and flash flooding, is becoming a greater risk than it ever was in previous years. As I have said, there are no current plans to look at businesses, but it should be possible for domestic properties to be covered by Flood Re. However, if the hon. Gentleman wants to write to me about this, he can of course do so.
I thank the Minister for her statement and for her ongoing commitment to flood defences—both the natural flood management in which organisations such as Slow the Flow in my constituency specialise, and the more traditional types that have just been signed off for the town of Hebden Bridge.
More than half the homes in Calder Valley are in council tax bands A and B, and many of their residents live with the risk of flooding. In my community, the memory of the devastating Boxing Day floods in 2015, followed by those in February 2020, still loom large in people’s minds, and cause a great deal of anxiety. The lowering of the flooding element of their household insurance to just £25 will make a real difference to families with modest incomes. What practical steps will the Government take to encourage people to take up that offer, and to ensure that they understand what changes have been made?
I absolutely love Slow the Flow, and I made a delightful visit to my hon. Friend’s constituency to look at the flood defences there. The halving of the contents only flood element to £25 will make a huge difference to the cost of living. Flood Re policies should be automatically ceded by the insurance companies, and that should be clearly communicated. I am encouraging Flood Re and the insurance companies to ensure that communication is as clear as possible so that people know exactly what their rights are, particularly when it comes to accessibility to Build Back Better.
Walford Mill Crafts and Little Pickle at the Mill, the café, in Wimborne were under water in the aftermath of storm Chandra, but although it was a named storm, no flood recovery grants were available. Flood Re does not cover them, and flooding is excluded from their policies. Will the Minister consider action for commercial buildings such as Walford Mill so that they can continue their education work, protect the creators who work there and support their community—if not through Flood Re, by extending flood recovery grants to all named storms?
The hon. Lady raises an important point, and I absolutely recognise the impact that flooding has on businesses. Through the floods resilience taskforce, we have been looking at the various grants that are available. As she will know, that sits within the Ministry of Housing, Communities and Local Government, but conversations are happening across Departments.
In Shrewsbury, we regularly suffer flooding along the River Severn and Rea brook, so I really welcome today’s announcement. The measures proposed reflect the common sense and long term solutions that my colleagues and I set out in the Environmental Audit Committee’s report on flooding resilience. We gave feedback from residents and businesses that insurance is not just unaffordable but, in some places, impossible to get. We requested that funding be prioritised for prevention, preparedness, mitigation and adaptation, rather than simply paid out each time floods hit, so it is so welcome to hear today that the long term approach is that we will have flood performance certificates and Build Back Better, which will provide extra money not just to repair people’s homes post flooding, but to make them resilient against future floods. That is a much more effective use of public money, and provides longer term support. It is great news for my residents, but what advice can I give to a business that has the same postcode and the same flood risk as others, but which is being quoted £40,000 for flood insurance?
I recognise the work that my hon. Friend has done on this issue through the Environmental Audit Committee. Although businesses are not eligible for Flood Re, the record amount of money that we are putting into flood defences should help to make flood insurance more affordable right across the country. Exactly as she says, building resilience and preparedness is what makes a difference, as well as insurance companies paying out every time there is a flood. We need to make our country more resilient, and that is a huge focus of the work I am doing.
The Minister has rightly spoken of the flood resilience grant scheme, which is an important scheme, but residents of Wheatley in my constituency found out in September 2024 that they were ineligible for grants, because 2,000 homes need to be flooded before payments are triggered. That fundamentally disadvantages rural areas, because many villages will never reach the threshold, even if the entire village is flooded. That is really unfair and advantages urban areas over rural areas. Will the Minister look at that with Cabinet colleagues, so that we can better support rural areas?
As the hon. Gentleman will know, that particular scheme is supported by MHCLG. However, we have been having conversations about the best way that we can support people collectively as a Government in the floods resilience taskforce.
I thank the Minister for her statement and for her clear passion for this work. I welcome the reforms to ensure that the Flood Re scheme remains sustainable and financially viable in the medium term, and the £25 cap on flood excess for contents insurance for band A and band B properties will be particularly important to those who can least afford to be affected by flooding.
However, the Minister knows that investment in flood defences is the only way to transition to a fully resilient system by 2039. Residents in Woodborough in my constituency will welcome the reforms, but what they really want to see is investment in a Woodborough flood alleviation scheme, which is long overdue. Will the Minister commit to working with me to ensure that Woodborough receives its fair share of the £1.4 billion investment in flood defences next year? Will she also join me in paying tribute to the Woodborough Flood Action Group, which does outstanding work in protecting Woodborough village in my constituency?
I would be delighted to pay tribute to Woodborough Flood Action Group for tirelessly working to protect the local community. My hon. Friend is a formidable champion of his area, and I commend him for raising this issue with me again. It is a very exciting project, and I hope to be able to visit it at some point.
A Government consultation on changes to the planning system closed on 10 March. It included consulting on weakening flood protection in planning guidance, which could lead to greater house building on land prone to flooding. To avoid the need for new insurance schemes such as Flood Re, which supports people after their homes have been flooded, the Government should seek to prevent house building in areas subject to flooding in the first place. When will the Government respond to the consultation that closed on 10 March?
As I am sure the hon. Gentleman knows, that is a question for MHCLG, not DEFRA. However, we work closely with MHCLG to make sure that the homes that we desperately need in this country are built in areas that are not prone to flooding, and do not contribute to flooding elsewhere.
On a point of order, Madam Deputy Speaker. On 15 October 2024, the former Secretary of State for Health and Social Care, the right hon. Member for Ilford North (Wes Streeting), said: “This Government are committed, as we were in opposition, to doubling the number of medical school places.”—[Official Report, 15 October 2024; Vol. 754, c. 683.] On 22 April 2026, in a Westminster Hall debate, the current Minister for Care, the hon. Member for Aberafan Maesteg (Stephen Kinnock), said: “Yes, it is still our intention to double the number of medical school places.”—[Official Report, 22 April 2026; Vol. 784, c. 134WH.] However, on 27 April, some five days later, the Minister for Care issued a somewhat bizarre ministerial correction. He said: “The Government have never committed to doubling medical school places.”—[Official Report, 27 April 2026; Vol. 784, c. 3MC.] Given what was said by so many Ministers before the election, and by the former Secretary of State at the Dispatch Box, how can that be accurate? I raised this issue with the Minister for Secondary Care, the hon. Member for Bristol South (Karin Smyth), in the Health Bill Committee last week, but there has still been no response. How can I establish whether that is still Government policy?
The hon. Member is an experienced parliamentarian and will know that I am not responsible for the Government’s policy position—if only I were. She will know that there are many ways in which this issue can be pursued with Ministers, and the Clerks and the Table Office are also available to advise her. No doubt those on the Treasury Front Bench will have heard her and will ensure that she gets a response in due course.
On a point of order, Madam Deputy Speaker. I seek your guidance on how we can ensure that all Members of this House observe the courtesy of letting other Members know when they will be in their constituency. Last Friday, the hon. Member for Ashfield (Lee Anderson) was a keynote speaker at a Reform UK fundraiser in my constituency. I hear that tickets were selling for as much as 30p, but unfortunately he neglected to let me know that he would be in Cannock Chase. I am sure that Members who have served in this House for as long as he has will be well aware of that courtesy, but I seek your advice on how he might be reminded.
All Members should be familiar with the convention that they should inform colleagues in advance whenever they intend to visit another Member’s constituency. As the guide to the rules of behaviour and courtesy states, “failure to do so is rightly regarded by colleagues as very discourteous.”
I hope that if colleagues fail to observe these courtesies an apology is forthcoming.
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move, That leave be given to bring in a Bill to require the Secretary of State to prepare a strategy for expanding the provision of Minor Injuries Units and Urgent Treatment Centres in rural areas; to require the Secretary of State to report to Parliament annually on the implementation of the strategy; and for connected purposes.
Since my election as North Cornwall’s MP almost two years ago, I have worked on far too many cases with constituents who face huge barriers in accessing healthcare. The first is the issue of getting to hospitals and healthcare centres. Bus services in my constituency are few and far between, to put it mildly, and the transport network lacks direct bus services from every single one of my major towns to their nearest district hospitals. Bude to Barnstable hospital is a five to six hour round trip involving three buses. Bodmin to Treliske is a four hour round trip involving two buses and a lengthy train journey. Launceston to Plymouth is a four hour round trip involving three buses. Wadebridge to Treliske is a five hour round trip, and Camelford to Treliske is a six hour round trip. That is not to mention the many villages across North Cornwall that have even worse bus connectivity.
To access her 20-minute chemotherapy appointment, one constituent was forced to travel from Bude to Derriford hospital, which is a three hour round trip, even by car. She did that journey every day for three weeks. Another constituent undertook a 120-mile round trip to Tiverton last week, only to be told that the appointment had been cancelled when she got there. The hospital told her that this was down to staff shortages due to sickness, but why was there no adequate cover in place for vital appointments?
Staff shortages due to sickness caused major problems for my constituents in Launceston last summer when, during the peak tourist season, those shortages caused the town’s minor injuries unit to close its doors. The “shortages” were just one staff member being off sick. The remaining staff were then distributed to other MIUs, none of which I would describe as being nearby, leaving my constituents and North Cornwall’s visitors travelling much further to access minor injury treatment—that is, if they were able to travel at all. Many told me that during that time, they had vital aid administered at home, instead of being seen by a healthcare professional.
My constituents have also urged me to raise the issue of the lack of dementia care. Despite having one of the oldest populations in the UK, Cornwall sadly ranks among those with the lowest capacity for dementia care, due to its lack of specialist care home beds and community support. Despite being one of the worst affected areas, Cornwall has less than half as many specialist care home beds per 100,000 people as Surrey, even though about one in three people in Cornwall are over the age of 70.
On a personal note, my grandmother suffered from dementia towards the end of her life, and my father and I shared her care in her final years. Through this experience, I saw at first hand how dedicated the care home and medical staff were, but also how dangerously overstretched they were. Had I not gone in to feed her every evening, she would not have eaten. For dementia patients interacting with the rest of our creaking health system, the situation gets even worse. One constituent with advanced dementia fell and sustained a head injury. After an hour long journey to the nearest major hospital, he was forced to wait outside in an ambulance for over eight hours. During this time, he was brought in for an assessment and then taken back outside again. As night fell, he became more confused and more agitated, and his family had no choice but to take him home to Launceston, without blood tests, and without confirming the suspected brain bleeding, and with no testing and no treatment.
On the subject of waiting times, those suffering from mental health issues in Cornwall can be stuck on referral waiting lists for months and months. When they reach crisis point, their options are limited. Some attend their local urgent treatment centre or MIU. In rural areas like mine, people can be extremely isolated, and their mental health can really suffer. Our farmers in particular face a mental health epidemic. In Cornwall, mental health patients can be sent from one end of the duchy to the other, or even to the other end of the country. They are often driven miles and miles from their family and support systems, and are isolated even further. One constituent who attended my surgery just last week had waited 313 days for accommodation back near his family. I urge the Government to ensure that rurality is factored into their ongoing mental health consultation, as part of the 10-year health plan commitment.
I come to one of the most pressing issues for my constituents of all ages: the total lack of NHS dentists in North Cornwall. This massive issue puts huge strain on our major hospitals, but it also has a serious knock on effect; patients visit their local MIU with serious dental problems. That is not to mention the huge pressure on A&Es, if patients can get to one. In the strategy required by this Bill, I would ask the Government to address the chronic lack of NHS dentistry in rural areas. We know that the NHS dental contract needs urgent reform, but will the Government also look at stopping integrated care boards handing back unused ringfenced funding, such as the unspent £1.2 million recently handed back by the Cornwall ICB?
All the issues that I have raised affect thousands of my constituents. They have paid their taxes and national insurance contributions for decades, and they have put their faith in a national health service, but they have been very badly let down when they most needed support. What I have described sounds like the sort of access to healthcare that would shock us if we were looking at a third world country, but sadly this is the reality that my constituents face, and there is seemingly no help on the way on healthcare transport. Both the Government and Cornwall council regularly tell me that there is no money available for any more buses, even if routes are a matter of life or death.
Of course, I recognise the absolutely incredible and tireless work of our nurses, doctors and other staff at our hospitals and medical facilities; I want to make that clear. They work in incredibly stressful environments, and with stretched resources, dealing with patients who have been let down by the system. However, this Government must put in more effort on the recruitment and retention of MIU staff. That must include expanding the provision of key worker housing for MIU nurses. The lack of that housing seems to be a key reason why Cornwall is failing to attract a workforce, and it further exacerbates our problem of closure due to constant short staffing.
Our local GP surgeries also experience enormous pressure during MIU closures. The Minister for Secondary Care, who is in her place, has helped me and my constituents to finally secure a desperately needed new GP surgery building in Bodmin, but unfortunately the battle continues, and I will come back to her for further assistance with that.
We have needed help, funding and more support in North Cornwall for decades, but we have not just sat by and waited for it. Our amazing volunteers and their excellent initiatives have demonstrated that we can offer real value for money and great healthcare outcomes, even compared with more urban areas. Barry Cornelius runs a pioneering healthcare transport system, and Cym Downing and many others run amazing memory cafés. The mental health charity Man Down provides excellent mental health services, and countless other charities, staffed by incredible volunteers, fill in the service gaps.
To end, I would ask the Government to set out for my constituents in writing how they plan to ensure minimum staffing levels at MIUs and urgent treatment centres in rural areas like North Cornwall. I ask the Government to let my constituents know exactly how they will expand the provision of medical facilities in the rural areas that need them most. I commend this Bill to the House.
Question put and agreed to. Ordered, That Ben Maguire, Andrew George, Steff Aquarone, Mr Joshua Reynolds, Ian Roome, Edward Morello, Rachel Gilmour, Dr Danny Chambers, Layla Moran, David Chadwick, Freddie van Mierlo and Charlie Maynard present the Bill.
Ben Maguire accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 16 October, and to be printed (Bill 108). Supply and Appropriation (Main Estimates) Bill Motion made, and Question put forthwith (Standing Order No. 56), That the Bill be now read a Second time.
Question agreed to. Bill accordingly read a Second time. Question put forthwith, That the Bill be now read the Third time.
Question agreed to. Bill accordingly read the Third time and passed. Taxation (Energy and Vehicles) Bill (Business of the House)
Ordered, That the following provisions shall apply to the proceedings on the Taxation (Energy and Vehicles) Bill— Timetable (1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.
(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.
(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.
(d) This paragraph shall have effect notwithstanding the practice of the House as to the intervals between stages of a Bill brought in upon Ways and Means Resolutions.
Timing of proceedings and Questions to be put (2) When the Bill has been read a second time: (a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put; (b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply: (a) any Question already proposed from the Chair; (b) any Question necessary to bring to a decision a Question so proposed; (c) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision; (d) the Question on any amendment moved or Motion made by a Minister of the Crown; (e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any Motion described in paragraph (10)(a) of this Order.
(5) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(6) If two or more Questions would fall to be put under paragraph (4)(d) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.
(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Miscellaneous (8) Standing Order No. 15(1)(Exempted business) shall apply to proceedings on the Bill.
(9)Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
(10) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(11) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(b) The Question on any such Motion shall be put forthwith.
(12) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.
(13) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(14) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.
(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Mark Ferguson.)
Second Reading
I beg to move, That the Bill be now read a Second time.
The conflict in the middle east has left British families and businesses exposed to volatile gas prices, which has made things more expensive for those who drive for work, including care workers. Even though much of the country’s electricity comes from cheaper renewables and nuclear, electricity prices are still largely set by gas, which means that running a wash, turning on the lights or boiling the kettle has also become more costly for families across the UK. As my right hon. Friend the Chancellor set out in May, the Government are keenly aware of the costs that the conflict in the middle east will impose on British people. The Government have taken steps to put our economic security and national security first. The Chancellor has committed to doing what she can to support families and businesses; to being responsive to a changing world; and to being responsible, in the national interest.
Some legacy renewable energy generators stand to benefit from the disparity when higher gas prices determine the price of electricity. Without any new costs or risks, those generators receive extraordinary revenues. The electricity generator levy already recoups some of the excess returns made by renewable generators when electricity prices are over £82.61 per MWh, but the Government have decided to increase the rate of the levy from 45% to 55% from today, 1 July.
The rate rise will have two main benefits. It will ensure that a larger proportion of any exceptional revenues from high gas prices are passed back to the Government. That will provide a vital revenue stream, so that money is available to the Government to support businesses and families with the impact of the conflict in the middle east. In the longer term, the increase in the EGL rate will also encourage participation in the new voluntary contract for difference scheme, announced in April—part of a broader package of measures that break the link between electricity and gas prices. Importantly, new investment is excluded from the levy. This ensures that the measure is targeted solely at legacy windfall returns, and does not deter future clean energy development.
In March, the Government announced a review of mileage rates for employees who use their own vehicle for work, and for the self employed who use the simplified expenses rates. In recognition of the pressures facing drivers as a result of the conflict in the middle east, my right hon. Friend the Chancellor announced in May the first uprating of mileage rates in 15 years. It was backdated to April, to provide immediate support to both groups. Mileage rates will increase for 2026-27 from 45p to 55p for the first 10,000 miles and 25p thereafter, with effect from 6 April 2026.
My hon. Friend is making an excellent speech. This is fantastic news for my constituents, my farmers and my businesses. Does she welcome the statement from the End Fuel Poverty Coalition, which said that increasing the rates of approved mileage allowance payments is absolutely the right thing to do right now?
I thank my hon. Friend for his thoughtful intervention. I absolutely agree that this will make a real difference to those workers who drive for their work. This is a long overdue measure, and I am very happy to put the Bill forward today.
The proposals represent the largest ever increase to the mileage rates, benefiting around 2 million employees and 1 million self employed individuals, and saving over £120 a year for a worker doing 6,000 business miles. Looking beyond 2026-27, the Government have already committed to a review of the rates, and will set that out at the Budget.
Recognising the key role that the road haulage sector plays in transporting goods across the UK, and its disproportionate exposure to fuel costs, the Government are introducing a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles for licences taken out between 1 July 2026—today—and 30 June 2027. That will save a typical HGV £600, on top of savings from fuel duty. Fuel costs make up a substantial proportion of HGV operating costs, and this action will help prevent cost pressures arising from the conflict in the middle east spreading across the economy.
The announcements on mileage rates and HGV VED were part of a wider package of measures announced in May, including on fuel duty. In total, the decisions taken since the 2024 general election to freeze fuel duty will save motorists 11p per litre, or £120 for the average car, £250 for the average van and over £2,000 for the average HGV, compared to previous plans. For those reasons, I commend the Bill to the House.
I call the shadow Minister.
I know that this legislation is fast tracked, but the Minister did rattle through very rapidly. I will seek to follow her lead as best I can.
It is a pleasure to debate the Bill on Second Reading and its measures on increasing the electricity generator levy, increasing the mileage allowance and introducing the 12-month HGV vehicle excise duty holiday. We are broadly supportive of the measures. However, we must consider the wider context in which we are debating them. The energy price cap has today increased by 13%, inflation is well above target, economic inactivity is rising, we have high borrowing costs, taxes are at record levels and are set to go higher, and, sadly, growth is non existent. Those things cannot all be blamed on the conflict in the middle east, so it is little wonder that this zombie Government are under pressure to show that they have a plan for energy costs, business costs and the strain on ordinary family finances.
Given the title of the Bill, people might expect ambitious measures in it to deliver cheaper energy for consumers and businesses, make our economy more competitive, and unwind the bills, levies and targets that are increasing costs, but there are not. Instead, this is a small package of measures with no serious plan to ease the burden.
The shadow Minister speaks of the need for ambition, but does he not agree that there is little that is more ambitious than breaking the link between the cost of gas and electricity, which so many of our constituents have called on us to do in recent months?
I agree with the hon. Gentleman on that point, which I will come to shortly. I just note that when the Secretary of State for Energy Security and Net Zero had the opportunity to really break that link, he backed away from doing so. This measure does so in a limited way, but it does not make the ambitious reforms that could have been made by the Energy Secretary.
The electricity generator levy—[Interruption.] I am sure the Parliamentary Private Secretary, the hon. Member for Hitchin (Alistair Strathern), can intervene if he is allowed. The electricity generator levy was introduced by the previous Government in 2023 as a temporary windfall tax applying to revenue above the benchmark price. It was a short term response to exceptional circumstances and is due to end in 2028. What do the Government propose? To increase the rate from 45% to 55% and to extend it beyond 2028, with no end date. This is another example of Ministers reaching for higher taxes while offering no certainty in return.
The Government say, to answer the point made by the hon. Member for St Austell and Newquay (Noah Law), that the increased rates will support the decoupling of gas prices by incentivising generators into voluntary wholesale contracts for difference, but while the new higher levy applies from today, those new contracts are yet to be seen, the proposed strike price is not known, the likelihood of generators accepting them is therefore unknown and in question, and the value for money for taxpayers is yet to be proven. Will the Energy Secretary still be in post to oversee the reforms? We all sincerely hope he will not be in the Treasury.
In the winding up speech, will the Minister provide an update on when the consultation on the CfDs will be launched, when the first contracts are set to be awarded, and if that will be through an auction or an allocation round? The Government have said that their intention is to extend the levy beyond 2028, but with no clarity on when it will end. The Government do not know how long they want it to last and have said there will be further legislation on that point. The Exchequer Secretary, in the debate on the resolutions last week, said that this was something “the Government are considering”. That is hardly a robust approach when bringing legislation before the House. Indeed, it seems like a hasty measure to give the Chancellor something to announce.
The House of Lords Constitution Committee previously recommended that for fast track legislation, sunset clauses should be the default presumption. An amendment to add one is outside the resolutions of this House, but we have tabled a new clause that would require the Government to come forward before the due end date in March 2028 to say whether they think the levy should continue.
There is an absence of any publicly available costings on the measures. That is true for all the measures, yet this House is being asked to approve an indefinite extension. When the levy was first introduced, the Office for Budget Responsibility predicted that it would raise £2.3 billion a year, but the out turn in 2024-25 was only £700 million. That matters, because part of the rationale for the higher levy is to generate revenues to support businesses and households. What measures is the Minister proposing in that regard? Surely not the Thorpe Park VAT cut, because that is funded by changes to corporation tax. Can the Minister enlighten us on what other benefits the consumers—my constituents—are getting from the tax?
The levy needs to be seen in the context of the Government promising to reduce energy bills by £300—instead, bills have increased by around that amount. That is what happens when Governments do not have a plan. The Conservatives would cut bills for businesses and consumers through our cheaper energy plan, taking VAT off energy bills, axing the carbon tax and legacy subsidies, and backing the North sea to get drilling.
The second measure on increasing mileage payments to 55p for 10,000 business miles is something that we support. It is right that those workers, including carers, who are using their own vehicles for work should not be left to absorb the rising cost. The measure is backdated to the start of the financial year. When winding up, can the Minister guarantee that His Majesty’s Revenue and Customs will not pursue anyone for any income tax or national insurance contributions that may otherwise have arisen on payments made before the legislation took effect?
The increase applies only to the first 10,000 miles. When we debated the resolution, the Minister said that the Government considered an increase in the 25p rate, but that it did not represent good value for money. If Ministers accepted that the 45p rate needed to be increased, can the Minister explain how they justify leaving the longer distance rate untouched at 25p? As has been set out, this is the first increase for some time, which raises the question of how we can avoid such a long period between increases in future. I accept that indexation would be complicated, but what commitments will the Minister make to regularly review increases?
Mileage is an important part of motorists’ costs, but the bigger impact comes from fuel duty. At the last Budget, the Chancellor announced plans to scrap both the 15-year freeze and the 5p cut that the Conservatives put in place. It was only after pressure from the Opposition that the Chancellor made a U turn. However, it was only a partial one, and those costs are going to start hitting from as soon as January. For the logistics sector, which pays £5.4 billion in fuel duty, a 1p increase per litre will increase costs by nearly £83 million. Perhaps the new Chancellor will recognise the folly of that approach and reverse the plans they inherit.
We welcome the HGV vehicle excise duty holiday. That duty had been frozen since 2014 until Labour came into office. For a year from today, HGVs will pay just £1, which will be a significant saving for the sector. However, the Government must recognise the full scale of the pressures facing hauliers and accept responsibility for those they have added; the Chancellor did not have to increase business rates, transport taxes and fuel duty.
More than 95% of road haulage firms are small businesses with small margins, so any increase in costs is a challenge. The Government say that the measure will save £600 for a typical lorry, and £900 for the largest vehicles. At peak prices, filling a single HGV costs more than £1,000. Yes, the measure is helpful, but not markedly so.
Taken together, the measures reveal a Government reaching for short term fixes while avoiding the harder questions. On the generator levy, they are demanding higher taxes without certainty or proper costings—all while displaying a lack of urgency on reforms to decouple energy prices. Mileage allowances are a partial change, and one that leaves high mileage workers behind. The vehicle excise duty holiday is a temporary relief without a plan for what comes next.
The Conservatives welcome the measures, as far as they go. However, they have not been brought forward by choice; they have been forced by the consequences of the Chancellor’s decisions. Taxes remain at record highs, and are set to go higher, costs continue to rise, and growth has stalled. Against that backdrop, the measures offer very limited relief.
I will now announce the results of today’s deferred Divisions.
On the draft Employment Tribunal (Extension of Time Limits) (Miscellaneous Amendments and Transitional Provisions) Regulations 2026, the Ayes were 323 and the Noes were 107, so the Ayes have it.
On the draft Employment Tribunals Extension of Jurisdiction (England and Wales) (Amendment) Order 2026, the Ayes were 318 and the Noes were 107, so the Ayes have it.
I call the Liberal Democrat spokesperson.
[The Division lists are published at the end of today’s debates.]
We Liberal Democrats support all three measures in the Bill. We recognise that the electricity generator levy is intended to encourage legacy renewable generators to move away from volatile wholesale electricity prices and on to contracts for difference.
As the only party to put in its manifesto a commitment to decoupling gas and electricity, the Liberal Democrats support the Government’s objective. If it succeeds, consumers will benefit from greater protection against future gas price shocks and the volatility that we have seen in recent years. However, if the measure does not achieve that behavioural change, and instead primarily generates additional revenue, I believe that Parliament and the public deserve clarity on how that money will be used. As the Bill progresses through the House, I hope Ministers will say how they intend to report to Parliament the amount of money the levy raises, and how they intend to spend it.
We have consistently argued for an emergency transport package to help Britain keep moving, emergency home insulation schemes, and low interest loans to support households to adopt energy security measures—something I proposed last autumn that the Government are now consulting on. There are many ways in which the Government could be helping households and businesses with the rising cost of living.
The change to income tax mileage allowance payments is another measure that Liberal Democrats are pleased to support. However, Ministers will be aware that there are many carers who drive their own cars, often hundreds of miles a week, who do not benefit from mileage allowances. Again, I hope that as the Bill progresses through the House, Ministers will say what measures will be taken to ensure that all of our valued and professional care workers can benefit.
The 12-month vehicle excise duty holiday for HGVs is a sensible measure and one that we welcome, but we must also recognise the unprecedented pressures facing the haulage sector. As international instability continues, and global energy markets remain uncertain, we urge Ministers to remain vigilant and responsive to the impact that those pressures are having on households and businesses, as well as industry and haulage.
Today’s debate is progressing rapidly—so rapidly, in fact, that I am yet to turn to the speech in my folder. It is a privilege to close this rapid debate on behalf of the Government, and I thank Members for their contributions, as well as the Economic Secretary to the Treasury for opening the Government’s arguments. She was right to point out that the conflict in the middle east has imposed additional costs on the British people, which is why the Chancellor and the Prime Minister have been careful throughout the conflict—from the beginning, when other parties took a different approach—to tread carefully, be cautious and not rush to entangle ourselves in a foreign conflict, risking national security and potentially further harming our economic security.
The measures we are considering are an example of how the Government have responded in a proactive and positive way to the impact of the conflict in the middle east on households, families and businesses. Reasonable people can disagree about how the Government could have best responded to the conflict as it played out. It is this Government’s judgment that we have taken the right approach to ensure that we support those families and businesses that most need it. We have been there for them with the changes in this Bill and others—either already passed or making their way through the House via instruments of some form—such as continuing the freeze in fuel duty.
We wanted to ensure that our response was proportionate and targeted so that we could continue on the path that this Government have set out to bring down the deficit and bring down borrowing sustainably over the course of this Parliament. This year, for the first time since the 2000s, we have a lower deficit than the G7 average—something that the Conservatives never managed to achieve, despite all their talk about wanting to manage the public finances well.
I will not run through the measures in detail, as my hon. Friend the Economic Secretary to the Treasury has already done so. Instead, I will take the chance to respond to the questions asked by Opposition spokespeople.
I can confirm that the consultation on the electricity generator levy will come before the end of this year. It is being worked on at the moment by officials in the Department for Energy Security and Net Zero. We will ensure that we consult on this at the end of the year. Questions such as auction allocation and details of the way the wholesale contracts for difference will work will, I am sure, be raised in the consultation or elsewhere in engagement.
Given that the levy kicks in from today and the Minister said that the consultation will be published before the end of the year, six months henceforth, and then legislation will have to go through, are the Government considering any backdating provision? If a company generator wanted to go into one of these wholesale CfDs, doing so would allow it to have that backdated; at the moment, it would not have the option to go into the wholesale and will just be hit with the higher levy.
No. If prices are slightly above the threshold set in the electricity generator levy, as they are at the moment, I believe, those taxes will be due now, from 1 July, whether or not businesses make decisions down the line after the consultation, after engagement and after the detail of the wholesale contract for difference policy has been set out by the DESNZ Secretary of State.
Both the shadow Exchequer Secretary and the hon. Member for St Albans (Daisy Cooper) asked how much revenue will be raised by this and other measures. It is a good tradition—a tradition set in place, in fact, by the Conservatives and Liberal Democrats—that the Office for Budget Responsibility set out the costings of policy decisions when they are made. That is important. This Government and this Chancellor have been keen to protect the independence and integrity of the OBR, rather than throwing it under the bus and causing market turmoil, as Liz Truss did. At the Budget later this year, the OBR will, in the usual way, confirm the costings of the changes announced by the Chancellor and included in the Bill.
The shadow Exchequer Secretary is right that the costings the OBR put out initially on the EGL ended up being very different from the revenue that it has pulled in. That is why it is right that we have an independent forecaster, so that even if things materialise differently than was forecast, we have forecasts that are robust to the information at the time and can be relied on by all.
The hon. Gentleman questions whether the Government have provided sufficient support more broadly. I would just mention that we have taken the decision to extend the fuel duty freeze. Going into the general election, the previous Government’s plan, as set out by the OBR, which we have already talked about, was for fuel duty to continue to rise and for the 5p cut to unwind. I believe that motorists would be paying a further 11p of fuel duty if it was not for their choice in 2024 to elect a Labour Government and not go ahead with the plans that the Conservatives set out.
A couple more points have been raised. The shadow Minister mentions a review of indexation. We will, of course, keep the mileage rates under review. The Chancellor announced a few weeks back that we will have a review. We have somewhat pre empted that with this 10p increase, because we wanted to respond to the conflict in the middle east and the impact on households, but that review is still ongoing and will report if further changes are to be made to the policy at the Budget.
The Liberal Democrat spokesperson made the important point that many care workers and people who drive for work may be working for an employer who does not provide a mileage rate. It is not compulsory for employers to set the rate at the HMRC rates. We have increased rates from 45p per mile to 55p per mile up to 10,000 miles, and I encourage employers across the country to adopt that higher rate.
For employees who work for an employer who does not do so or who persists in having a significantly lower rate, as I am aware that some do, it is possible to claim back marginal tax up to that amount, so 55p per mile now. A basic rate taxpayer can in effect get 20% back on that. It was a pleasure to meet care workers and members of Unison, the trade union, a couple of weeks ago at No. 11 Downing Street. Some questions were raised about whether that process could be made any easier for workers to navigate, and that is something I certainly want to look at with my officials. This is a complex area of policy. I encourage Members to inform care workers and others who drive for work and who do not have mileage rates provided by their employer that they can claim the tax back from HMRC.
I hope that responds to many of the points made.
I think the Minister might be coming to a conclusion, and I would not want him to miss the opportunity to refer to the House of Lords Constitution Committee and the presumption that fast tracked legislation should include sunset clauses. Could he explain why the Government have chosen not to follow that guidance in this case?
There is a very sensible policy rationale when it comes to the electricity generator levy, which I think is the clause the hon. Member is referring to. We want to ensure that the ending of the EGL and the future decisions made on it are made in the light of the decisions that will be made on the wholesale contracts for difference, which, as I have said, are coming forward. It would not have been the right decision to pick a future end date without considering how it would interact with the decisions that the Government will make and will be consulting on later this year on the detail of the wholesale contracts for difference.
I hope that that has responded to many, if not all, of the points that have been raised by Opposition Members. I encourage Members to support the Bill.
Question put and agreed to. Bill accordingly read a Second time.
Considered in Committee (Order, this day)
[Judith Cummins in the Chair]
Clause 1
Increase in rate of electricity generator levy
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Clauses 2 to 4 stand part.
New clause 2—Approved mileage allowance payments: review of rate for care workers— “(1) Within six months of the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a review of the adequacy of the approved mileage allowance payment rate set under section 2 in respect of care workers using a personal vehicle in connection with their employment.
(2) The review under subsection (1) must consider— (a) whether the rate of 55 pence per mile adequately reflects the costs incurred by paid care workers when travelling between the homes of those for whom they provide care; (b) the merits of setting a higher approved rate for paid care workers who are required to transport specialist equipment, medication or mobility aids in connection with their caring responsibilities; (c) the merits of setting a higher approved rate for paid care workers who make three or more separate care visits in a single day; and (d) the interaction between mileage reimbursement practices in the social care sector and the effective hourly rate received by paid care workers relative to the National Living Wage.
(3) In preparing the review under subsection (1), the Chancellor of the Exchequer must consult— (a) representatives of paid care workers; (b) representatives of employers in the social care sector; and (c) such other persons as the Chancellor considers appropriate.
(4) In this section "care worker" means a person employed to provide personal care to individuals in their own homes, whether employed directly or through a domiciliary care agency.”
This new clause would require the Chancellor of the Exchequer to review the adequacy of the approved mileage allowance payment rate set under section 2 in respect of care workers using a personal vehicle in connection with their employment. New clause 3—Vehicle excise duty: assessment of impact on haulage costs and consumer prices— “(1) Within three months of the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons an assessment of the impact on haulage costs and consumer prices of the temporary vehicle excise duty (VED) rates for goods vehicles provided for under section 3.
(2) The assessment under subsection (1) must include— (a) an estimate of the reduction in annual operating costs for a typical goods vehicle operator resulting from the reduced VED rate set under section 3; (b) an assessment of the extent to which the temporary reduction in VED affects the overall tax burden on goods vehicle operators, including that arising from fuel duty; and (c) an assessment of the adequacy of the temporary reduction in VED as a measure to reduce haulage costs and consumer prices.
(3) In preparing the assessment under subsection (1), the Chancellor of the Exchequer must consult representatives of the haulage industry.”
This new clause would require the Chancellor of the Exchequer to publish an assessment of the combined impact on haulage costs and consumer prices of the temporary vehicle excise duty (VED) rates for goods vehicles. New clause 4—Electricity Generator Levy: review of rate— “(1) The Treasury must review the impact of the increase in the Electricity Generator Levy rate to 55% under section 1.
(2) The report must, in particular, assess— (a) the impact of that rate on investment in energy generation; (b) the effects of that rate on electricity prices, including consumer bills; (c) the implications of that rate for the security of energy supply; and (d) whether the Levy should continue to be charged at a rate of 55%.
(3) The Chancellor of the Exchequer must lay the report containing the findings of the review before Parliament before 31 March 2028.”
This new clause would require the Treasury to review the impact of increasing the Electricity Generator Levy rate to 55% and to report to Parliament by 31 March 2028. New clause 5—Goods vehicle excise duty (VED) rates: review— (1) The Treasury must review the impact of the temporary vehicle excise duty (VED) rates for goods vehicles provided for under section 3.
(2) The report must, in particular, assess— (a) the impact of the temporary VED rates on— (i) UK public finances, and (ii) the competitiveness of the UK freight and logistics sector; (b) the effects of the temporary VED rates on operating costs for goods vehicle operators; (c) the contribution of the temporary VED rates to efficient supply chains across the United Kingdom; and (d) whether it remains appropriate for the temporary VED rates on goods vehicles to continue.
(3) The Chancellor of the Exchequer must lay a report of the review before Parliament before 30 June 2027.
This new clause would require the Treasury to review the impact of temporary vehicle excise duty rates for goods vehicles and to report to Parliament by 30 June 2027.
I will open this debate in Committee of the whole House by reminding the House—though I am sure Members know what is in this Bill—of the purpose of the Bill, which is to respond to increases in costs for families and businesses in the UK because of the conflict in the middle east. Even though we have just completed Second Reading, as we are now in Committee, I will address the clauses of the Bill in turn—Members will be relieved to know that there are only four clauses, so it should not take too long. I will address the amendments that have been tabled in my closing speech, which, with the leave of the House, I intend to make.
Clause 1 makes changes to ensure that the electricity generator levy rate will rise from 45% to 55% from today, 1 July. As my hon. Friend the Economic Secretary to the Treasury set out, in the UK the majority of our electricity is generated from renewables. Despite that, when the crisis in the middle east pushed up international gas prices, the cost of electricity, and so the cost of living, rose too, because electricity prices are still largely set by the price of gas. The changes made by this clause will ensure that a greater proportion of any exceptional revenue that many non gas generators may receive because of the conflict in the middle east is available to Government to support businesses and households where appropriate.
As we have discussed, the Government also announced back in April that we are acting to de link electricity prices from gas prices through new voluntary long term fixed contracts being offered to existing low carbon generators. As we have discussed, these are known as wholesale contracts for difference, and the changes made by clause 1, increasing the rate from 45% to 55%, will encourage participation at a competitive price in these WCfDs.
Clause 2 makes changes to increase the generosity of mileage rates for 2026-27 for employees and self employed individuals who use their car or van for work from 45p to 55p for the first 10,000 miles and 25p thereafter, with effect from 6 April 2026. I forgot to respond to the shadow Exchequer Secretary asking me earlier why we have not increased the rates above 10,000 miles. I did respond to that point in the Ways and Means debate last week and think the Government have got the balance right here. We are supporting all drivers, noting that of course for a driver who drives 10,001 miles, almost all of their miles will be covered by the higher rates, and it is still open to employers with employees who drive many more miles to set their own rates if they wish. I would just note that the Conservative party had many opportunities to uprate these mileage rates after 2011, when they did do so, but they demurred from that choice for 13 years in a row, and I am very glad to be part of a Government who have introduced the largest increase in a very long time, if not ever.
The changes made by clause 2 will provide immediate support for both employees and the self employed, and this is on top of the universal support announced in May, including the freeze on fuel duty, which will save motorists 11p per litre compared to previous plans, or £120 for the average car, or £250 for the average van. This clause represents the largest ever increase to these mileage rates, benefiting around 2 million employees and 1 million self employed individuals, saving over £120 a year for a worker doing 6,000 business miles.
Clause 3 reduces the vehicle excise duty liability for the majority of heavy goods vehicles to £1 for 12 months for licences taken out from today until 30 June 2027. The changes made by this clause are in recognition of the key role that the road haulage sector plays in transporting goods across the UK and its disproportionate exposure to fuel costs.
Fuel costs make up a substantial proportion of HGV operating costs, and this action will help prevent cost pressures from the conflict in the middle east from spreading across the economy. The shadow Exchequer Secretary is right to point out that this measure on its own is not a silver bullet in helping the haulage sector, but I hope that it will provide some assistance, and it does show very clearly by our reducing this rate down to £1, saving HGVs £600 a year, that this is a sector that we do want to support and see grow and weather the storm from the conflicts in the middle east. We also want to do all we can to reduce costs in the supply chain, to keep prices in the shops for everyday families as low as possible. The decisions taken since the 2024 general election to freeze fuel duty will save the average HGV over £2,000.
With that, having taken the Committee through the three clauses, I look forward to hearing the contributions from other Members.
I call the shadow Minister.
I will be speaking primarily to new clauses 4 and 5 tabled in my name and those of my hon. Friends, specifically related to the electricity generator levy and the HGV vehicle excise duty holiday.
I have to say to the Exchequer Secretary that it is quite nice to see a Treasury Bill that is so concise, rather than the hundreds of pages that we see in every Finance Bill, adding complexity and costs for businesses. I hope that he will take that point back to the Treasury when he returns with the next Finance Bill. I think he has also given a commitment, or expressed an ambition: he said he likes to scrap taxes, so I hope that we will see more taxes scrapped. Now we turn to one that he is increasing, rather than introducing.
3.15 pm New clause 4 would require the Treasury to review the impact of increasing the generator levy to 55% and to report on its findings to Parliament before 31 March 2028. Importantly, the review should also consider whether the levy should continue to be charged at a rate of 55%. Due to the resolutions passed by the House, it is not possible to seek to amend the Bill to put a levy end date on the face of the Bill, so this is a modest amendment, but it is an important one because it goes to the heart of whether this Government have thought through the consequences of their approach.
The levy was originally introduced as a temporary windfall tax, designed to capture exceptional receipts in extraordinary market conditions. The Government are now proposing to raise it further and to extend the regime, but without setting out an end date. In last week’s debate, the Exchequer Secretary to the Treasury said: “we have not made a definitive announcement on whether that rate will last a short period or will go on into the future, but we will update in due course”.—[Official Report, 24 June 2026; Vol. 788, c. 397.] In his winding up speech on Second Reading, the Exchequer Secretary said he wanted to consider how the impact of the wholesale contracts for difference might impact on the levy. I gently suggest that a joined up policy might have considered those two things before bringing forward one of them, because that is not a sound way to make energy or other policy.
If the Treasury believes the measure to be justified, it should welcome a formal review. This new clause matters because investment in energy depends on confidence, predictability and a stable fiscal framework. It would require that implications for consumers and energy security are considered. If the Government are going to increase the tax burden on generators, they must be prepared to show what that means for future investment decisions, project financing, and the UK’s attractiveness as a place to build and expand capacity. The new clause also asks questions about electricity prices and consumer bills.
Ministers have suggested that this measure and the policy may help to reshape the market—to decouple gas and electricity prices—but the measures designed to do that have not been published. All we know from the Exchequer Secretary is that they will be published by the end of the year. In those circumstances, we should not be asked to accept on trust that a higher and indefinite levy will have no adverse consequences. This new clause is a call for scrutiny, for transparency and for certainty, and the Government should have no objection to a review by March 2028 and a statement on whether they intend for the levy to continue.
Doubtless the Exchequer Secretary, who is consistently consistent, will say that all measures are always kept under review by the Treasury. If so, I look forward to him accepting the new clause, which simply says that there will be a review; otherwise, I will urge other hon. Members to support it.
Similarly, new clause 5 would require the Treasury to review the impact of the temporary VED rates for goods vehicles and to provide a report to Parliament. This report must consider whether it remains appropriate for the temporary excise duty rates on goods vehicles to continue, and it should be produced before 30 June 2027. It would force Ministers to explain whether this short term relief is delivering and whether an extension might be appropriate.
The temporary holiday is welcome, but it is limited; it is not a silver bullet, as the Exchequer Secretary has acknowledged. Equally, I acknowledge that it is a good measure and the right starting point, because the freight and logistics sector is under immense pressure from rising operating costs, fuel costs, business costs and wider economic uncertainty; more than 95% of those road haulage firms are small and medium sized enterprises operating on margins as low as 2%, and the sector simply cannot absorb repeated shocks.
A policy like this should therefore be tested properly, and the long term benefits properly weighed. New clause 5 would do precisely that. It would also assess the impact on the public finances, the competitiveness of the freight sector and operating costs for goods vehicle operators. If the Government’s measure improves supply chains and helps firms keep goods moving efficiently across the UK, then they should demonstrate that. If it does not, Parliament should know that too.
The new clause also asks the sensible question of whether this temporary reduction should continue. Businesses need certainty, not a series of one year sticking plasters. Haulage firms plan investment, staffing, maintenance and route costs on a long term horizon, not on the Treasury’s timetable. In the face of mounting pressures, the Government should assess whether this support needs to be continued in the future.
Temporary relief is no substitute for a coherent growth strategy. New clause 5 would ensure that Parliament has the evidence to judge whether the policy is working and whether we should support an extension.
The Government have brought forward a package of measures that are more of a short term fix than a serious plan. That package includes an indefinite tax on electricity generators, a limited increase in mileage allowance, and only temporary relief for HGV operators. They have failed to give the House the clarity that it deserves about the fiscal impact of the measures. The Exchequer Secretary referred to the OBR scoring of the original levy rate. That scoring was provided at the time that the levy was announced because we announced it at a Budget. The problem we have is that this Chancellor makes announcements outside of a Budget, and then refuses to provide any costings or estimates. Presumably she had advice from officials before she brought the measure forward, so why can she not share with us the indicative amounts in order to aid our debate?
The Government also failed to give clarity on the duration of the electricity generator levy—we are supposed to just wait and see—and on the long term support needed for businesses and working people. I urge hon. Members to support our two modest new clauses.
I call the Liberal Democrat spokesperson.
I rise to speak to new clauses 1 to 3. New clause 1 would require the Chancellor to publish a report on the use of additional receipts arising from the increase in the electricity generator levy from 45% to 55%. New clause 2 would require the Chancellor to review the adequacy of the approved mileage allowance payment rate set under clause 2 in respect of care workers using a personal vehicle in connection with their employment. New clause 3 would require the Chancellor to publish an assessment of the combined impact on haulage costs and consumer prices of the temporary vehicle excise duty rates for goods vehicles.
As I indicated on Second Reading, we support what the Government are trying to do with these measures. However, it is really important for trust in politics that when Ministers stand at the Dispatch Box and say that the intention is to use the levy to supporting households and businesses with the cost of living, there is a report to demonstrate to the public that the money does, in fact, go towards measures that do just that, rather than the money disappearing into Treasury coffers. I urge the Exchequer Secretary to accept new clause 1, which would provide transparency to Parliament and the public.
Let me turn to new clause 2. Some Members will know that I have spoken repeatedly in this House about the extraordinary work carried out by our care workers. The salary of our care workers, and the status they are given, is nowhere near big enough to recognise the extraordinary work that they do. I have spent several hours with Abbots Care in my constituency, watching how their care workers work. They have an enormous emotional investment in every single client; they observe their habits and personality, and they know when something is slightly out of whack or not quite right. A care worker’s routine can suddenly change if there an emergency with another client. There may be something wrong with the client’s medication and they have to make phone calls that they had not expected to make. They are experts on their client and on people, but they are not experts on tax.
I was very heartened that the Exchequer Secretary said on Second Reading that employees who do not receive the mileage allowance can claim back an equivalent amount. I was also heartened to hear him say that he would look into ways to make it easier for care workers. Could he outline what those measures might look like? We owe care workers so much thanks for the work that they do. It is diligent, hard work to make sure that our loved ones are cared for and can live with dignity. We should make the system as simple as possible for them. It might be a case of care organisations and providers sending letters to care workers to tell them what they are entitled to, or it might be a case of requiring HMRC to proactively write to them, but we must bend over backwards to make sure that care workers can benefit from this particular measure.
As I said on Second Reading, we welcome the measure, but we urge Ministers to think very carefully and to go as far as they can to make sure that every care worker who is entitled to this benefit understands that it is there for them. It must be made as simple as possible for care workers, and we must make it clear that it will not end up in a drawn out dispute with HMRC; I urge the Exchequer Secretary to think about a dedicated hotline for care workers, in case we need one down the line. Finally, new clause 3 requires a report on this particular measure.
Our three new clauses are all transparency measures, and I hope that the Government will look favourably on them.
I thank the shadow Exchequer Secretary, the hon. Member for North West Norfolk (James Wild), and the hon. Member for St Albans (Daisy Cooper), for their scrutiny and attention to the measures contained in this short Bill. I am proud that, as the shadow Exchequer Secretary said, we removed three taxes, and I am glad to say that, on a temporary basis at least, one tax is being put down to £1 as a result of the legislative changes that the House is about to vote on. It is a privilege to close this brief debate on behalf of the Government.
Let me turn to each amendment. New clause 2 would require a report to the House of Commons on the approved mileage allowance payments system, including the adequacy of the rate for care workers. The hon. Member for St Albans spoke powerfully about the work done by care workers in her constituency, who she has the honour of representing. I think that all Members will know—from personal experience of family members who have either worked in the sector or been cared for by those who work in the sector—just how valuable care workers’ time, effort and care is.
I am glad that the hon. Lady is now aware that care workers can claim back the tax. They cannot claim back the whole amount—it is not fully equivalent—but they can claim back the tax relief, as it were, on the amount. I want to look at whether we can make that process simpler and easier to use. As the Department does so, I would be happy to provide further updates—if not at the Budget, then beforehand. We have said that the Government’s review of the rates is not over. We came forward with the 10p increase, and we are continuing the review and will update the House further at the Budget. I therefore urge Members to reject this new clause.
New clause 3 would require a report to the House on the impact of haulage costs and consumer prices, including the operating costs for and overall tax burden on goods vehicle operators. As I am sure the shadow Exchequer Secretary and the Liberal Democrat spokesperson will know, the Government have already published a tax impact and information note setting out the expected impact of the measure. The costing for it will be subject to scrutiny by the Office for Budget Responsibility and set out at a future fiscal event. It is therefore the Government’s view that the new clause is unnecessary.
New clause 4 would require the Treasury to review the impact of the EGL rate rise, including on investment, electricity prices and energy security, and to report to Parliament by 31 March 2028. The EGL was carefully designed to avoid disincentivising renewable generation, which means that since its introduction in 2023 it has had no adverse effect on energy security or new investment; in fact, we are having record levels of new investment in renewables under this Government. It is worth noting that new investments made since 2023 are exempt from the EGL and will continue to be so.
The Government have published a tax information and impact note on this measure, too, which sets out clearly that the Government’s view is that this rate rise is not expected to have an impact on electricity prices or investment in renewable generation going forward. The note also explains the rationale for the new EGL, which we have discussed. I will be consistent in reminding the Committee that, of course, the Government keep all taxes under review and monitor and evaluate tax policy changes on an ongoing basis, and that, unless responding to international conflict, in order to be there for households and businesses, tax policy decisions are usually best made by Chancellors at the Budget in the usual way.
The shadow Exchequer Secretary seemed to suggest that the Opposition’s view is that we should not have introduced this change until wholesale contracts for difference have been consulted on and sorted out. The Opposition would choose to forgo the additional revenue that may come in if prices remain higher than the threshold in the coming years; the Government’s view is that that is not the right approach.
I am happy to clarify that for the Minister. My point was rather that if the Government are to introduce a higher levy rate on the basis that it will incentivise people to move into wholesale contracts for difference, it might be as well to have the policy for those wholesale contracts for difference ready.
I thank the shadow Exchequer Secretary for that. As I said, we are consulting on that policy before the end of the year. It was the Chancellor’s and this Government’s decision that the better thing to do for the country—for businesses and for households—was to respond to the conflict in the middle east with pace and appropriate responsiveness rather than waiting until the next fiscal event, which is scheduled for the autumn.
I turn to new clause 5, which would require a report to the House of Commons on the impact of the measure on UK public finances, the competitiveness of the UK freight and logistics sector and the contribution of the temporary VED rate to efficient supply chains, and whether the measure remains appropriate beyond the next 12 months. As always, taxes and reliefs will be looked at ahead of the next fiscal event in the context of the public finances. Consistent with the Chancellor’s approach, this is a targeted and time limited intervention in response to the conflict in the middle east, in recognition of the key role that the road haulage sector plays in transporting goods—including food—across the UK and its disproportionate exposure to fuel costs. The Government will continue to monitor the situation and consider further action as and if that may be necessary. As on other measures, the Government have already published a tax impact and information note, and the costing for the measure will be subject to scrutiny by the Office for Budget Responsibility.
Finally, the shadow Exchequer Secretary talked of this measure as a short term fix. I hope he is aware of and has seen the impact of the long term decisions that the Government have made over our time in office to ensure that we can have higher economic growth, as we have had, and higher living standards—rather than their falling by 2%, as they did in the previous Parliament, they have already risen so far by 2% in this Parliament—in part because we have brought back economic stability and had wages rising faster than inflation in every single month since we took office. That has supported stability in the economy which has delivered six interest rate cuts. We have made sure that we are increasing capital investment and that we work with the private sector to get growth up and to invest in our public services and important infrastructure. We have done that in a way, along with investing in our NHS, that has enabled us to manage the public finances well and get borrowing falling in every year of this forecast, with the deficit lower than the G7 average, which the previous Conservative Government never achieved, despite how much they talked about it. They talked a good game on the public finances, but they were never able to deliver that. I therefore ask the Committee to reject the new clause.
For the reasons that I have set out, I urge hon. Members to reject the amendments tabled by the Opposition. I commend the clauses in this short and well formed Bill to the Committee.
Question put and agreed to. Clause 1 accordingly ordered to stand part of the Bill. Clauses 2 to 4 ordered to stand part of the Bill. New Clause 2 Approved mileage allowance payments: review of rate for care workers “(1) Within six months of the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a review of the adequacy of the approved mileage allowance payment rate set under section 2 in respect of care workers using a personal vehicle in connection with their employment.
(2) The review under subsection (1) must consider— (a) whether the rate of 55 pence per mile adequately reflects the costs incurred by paid care workers when travelling between the homes of those for whom they provide care; (b) the merits of setting a higher approved rate for paid care workers who are required to transport specialist equipment, medication or mobility aids in connection with their caring responsibilities; (c) the merits of setting a higher approved rate for paid care workers who make three or more separate care visits in a single day; and (d) the interaction between mileage reimbursement practices in the social care sector and the effective hourly rate received by paid care workers relative to the National Living Wage.
(3) In preparing the review under subsection (1), the Chancellor of the Exchequer must consult— (a) representatives of paid care workers; (b) representatives of employers in the social care sector; and (c) such other persons as the Chancellor considers appropriate.
(4) In this section “care worker” means a person employed to provide personal care to individuals in their own homes, whether employed directly or through a domiciliary care agency.”—(Daisy Cooper.) Brought up, and read the First time.
Question put, That the clause be read a Second time.
46|00:00|80|281|divided:|Question accordingly negatived.||0|0
New Clause 4
Electricity Generator Levy: Review of Rate
“(1) The Treasury must review the impact of the increase in the Electricity Generator Levy rate to 55% under section 1.
(2) The report must, in particular, assess—
(a) the impact of that rate on investment in energy generation;
(b) the effects of that rate on electricity prices, including consumer bills;
(c) the implications of that rate for the security of energy supply; and
(d) whether the Levy should continue to be charged at a rate of 55%.
(3) The Chancellor of the Exchequer must lay the report containing the findings of the review before Parliament before 31 March 2028.”—(James Wild.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
47|15:49|173|282|The Committee divided:|Question accordingly negatived.||0|0
New Clause 5
Goods vehicle excise duty (VED) rates: review
“(1) The Treasury must review the impact of the temporary vehicle excise duty (VED) rates for goods vehicles provided for under section 3.
(2) The report must, in particular, assess—
(a) the impact of the temporary VED rates on—
(i) UK public finances, and
(ii) the competitiveness of the UK freight and logistics sector;
(b) the effects of the temporary VED rates on operating costs for goods vehicle operators;
(c) the contribution of the temporary VED rates to efficient supply chains across the United Kingdom; and
(d) whether it remains appropriate for the temporary VED rates on goods vehicles to continue.
(3) The Chancellor of the Exchequer must lay a report of the review before Parliament before 30 June 2027.”—(James Wild.)
This new clause would require the Treasury to review the impact of temporary vehicle excise duty rates for goods vehicles and to report to Parliament by 30 June 2027.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
48|16:01|177|308|The House divided:|Question accordingly negatived.||0|0
The Deputy Speaker resumed the Chair.
Bill, not amended, reported.
Third Reading
I beg to move, That the Bill be now read the Third time.
I am grateful for the discussion that we have had today on a Bill that responds directly to the pressures placed on people and businesses across the UK by the conflict in the middle east. In respect of energy, rising gas prices have driven up electricity prices, and non gas generators stand to benefit significantly as a result. The electricity generator levy ensures that a share of this exceptional revenue is redirected to the public, and we are increasing that share by raising the rate of the levy from 45% to 55%. As for fuel costs, we are uprating mileage rates for the first time in 15 years, providing relief for millions. We are also introducing a 12-month vehicle excise duty holiday for the majority of heavy goods vehicles, supporting those who drive for work and the transport of goods across the UK. Those three measures are the right measures at the right time, and I commend the Bill to the House.
This has indeed been fast tracked legislation, at 90 minutes—no need for extra time here. [Laughter.] There is more.
The Government have sought to move rapidly to impose a higher levy on generators, but the measures designed to decouple electricity and gas prices have not been given the same priority. Motorists using their cars for work will welcome the increased mileage rates, but those driving more than 10,000 miles a year will be puzzled that those rates remain unchanged. Reducing the costs on those who keep goods moving around our country will make a difference, but that has to be seen as only part of the ledger and set against higher employment and higher taxes.
I congratulate the Minister on so ably shepherding the Bill through this afternoon. I am sure that he will have many more Bills to take through as the Exchequer Secretary to the Treasury, but this may well be the last piece of legislation to be granted Royal Assent before the Prime Minister shuffles off the stage. For this Bill and this Prime Minister, they think it’s all over—it is now.
We Liberal Democrats support the Bill and the three measures in it. We tabled our three new clauses in Committee, and I was grateful that the Minister gave assurances from the Dispatch Box that he would look at every single opportunity to ensure that care workers are aware of the ways in which they can benefit from these measures. We are happy to see the Bill fast tracked, but I believe the Minister said that he would look for opportunities to come back and report to this House—if not at the Budget, perhaps before—on how that is going. I am glad that is on the record. I hope that care agencies see that on the record and act on it to inform their staff, but I was pleased to hear the Minister say that. I will try to hold his feet to the fire so that we do everything we can to ensure that care workers are aware that they will benefit from this measure.
I ask that the House gives the Bill its Third Reading.
Question put and agreed to. Bill accordingly read the Third time and passed.
The petition states: The petition of residents of the United Kingdom, Declares that current laws and procedures relating to drink driving, drug driving, and dangerous driving are failing to protect the public, as delays between arrest and prosecution allow suspected high risk drivers, including repeat offenders, to remain on the roads, contributing to preventable deaths such as that of Tim Burgess.
The petitioners therefore request that the House of Commons urge the Government to introduce urgent reforms, known as “Tim’s Law”, to strengthen the response to drink, drug and dangerous driving, including the immediate suspension of driving licences for those suspected of serious driving offences, the introduction of rapid evidential roadside saliva testing for drug driving, stronger measures to tackle repeat offending by dangerous drivers, and improved monitoring and enforcement of high risk drivers.
And the petitioners remain, etc.
[P003211]
Motion made, and Question proposed, That this House do now adjourn.—(Gregor Poynton.)
I am very grateful that you have granted tonight’s debate, Madam Deputy Speaker, and that we have so much time to discuss this important issue.
Packaging extended producer responsibility, which I will call EPR, is a policy that genuinely has a laudable goal: the move towards a circular economy, in which recycling is the norm, waste is minimised and we shift away from environmentally harmful materials such as plastic—something that the House can get behind. If done right, EPR could deliver just that, but the reality of the scheme now being implemented by the Minister is altogether different. We are seeing jobs being lost, British businesses losing contracts and investment, an increase in carbon intensive glass being imported and, ultimately, producers switching from infinitely recyclable materials to plastic.
I appreciate the hon. Lady giving way so early in her speech, because I have to run to a Delegated Legislation Committee. I agree with all the points she is making, but would she talk later about the impact on the pub trade? This policy will hit the pub trade by about £50 million—it is going to do some real damage to a very important industry.
I will indeed be talking about the pub industry. I thank all the Members who have been campaigning so hard on this particular point for the last two years. The hon. Member will need to read the speech afterwards—it will be brilliant. We will try to protect our hospitality industry.
While this debate is not focused on a single material, I must declare a particular interest in glass. Next month, I will be really proud to attend an event marking the 275th anniversary of the founding of Beatson Clark. Since the earliest days of the industrial revolution, it has been manufacturing glass in my Rotherham constituency, providing generations of skilled, well paid jobs to my constituents. Throughout world wars, economic decline, depression and indeed renewal, it has endured, helping to drive our regional economy. I say to the Minister that I want Beatson Clark to thrive for another 275 years, but the reality is that the EPR is placing that future at risk.
A plethora of interventions, but I have to go to the sister at the back first.
In my constituency, I also have a phenomenal glass manufacturer, called Encirc. It has three sites across the UK, employing over 2,000 people. It is unfairly penalised by this tax, because it is about weight. As the hon. Lady has pointed out, this is encouraging manufacturers of things like tonic to switch to aluminium and plastic, which are infinitely less recyclable than glass. It is also competing against imports from countries like Turkey, so not only are we facing the increased carbon emissions from shipping over the glass, but the glass is less pure and is therefore not as recyclable. I would ask the Minister urgently to look at this tax—I have already asked for that—and very quickly to bring in a 75% reduction while she considers its overall implications.
I hope to amplify the hon. Lady’s points later in my speech. Glass is not just another packaging material; it is infinitely recyclable.
I wanted to give the hon. Lady a chance to get back into the swing of things before intervening, but as she is talking about a valuable business in her constituency, let me say that the pub and brewery sector in Woking represents £100 million and 1,800 jobs to our local economy; those numbers used to be higher but, sadly our small brewery, Thurstons, had to close. The EPR was one of several factors that hit that brewery. Does she agree that we need a change from the Government on the EPR, as well as wider support for the sector?
I completely agree. Trying to level the playing field on this EPR measure is the one thing that I hope the Minister will give us comfort on today. Our hospitality industry is really suffering. More generally, I worry where the remaining places of community are in our towns, cities and villages. If we are not protecting the ones we have—the few we have—it is going to be a very dark future. Let me now get back to glass.
The hon. Member is being very generous in giving way, and she is making an excellent speech. I think we would say that the cost of food right now is the No. 1 issue for all our constituents and that household budgets are very tight. Does she agree that this is a bad time to be implementing this tax, whatever its merits may or may not be? The Bank of England estimates that it will add 0.5% to food price inflation, and that food prices could rise by 7% over the next 12 months. Households on very tight incomes are going to be squeezed as a result. Would it not be better either to cancel this measure, or at the very least not to implement it at a tough time like this?
As I said, I think the principles of the scheme are laudable. What frustrates me is that it is disincentivising using renewable materials, which in the long term are much cheaper. Instead, it is driving businesses to plastics, which have a very real cost on our environment as well as on our pockets. The Minister needs to do anything she can to mitigate that risk, but I hope this debate will grant her the opportunity to do so in a fair and equitable way.
Glass supports a circular economy. It underpins supply chains across food, drink and pharmaceuticals. We all support the principle underpinning the EPR—that those placing packaging on the market should pay towards its collection—but, as Members have said, the weight based fee structure that the Government have chosen to utilise disproportionately penalises glass, making glass significantly more expensive per unit than lighter, less sustainable alternatives like plastic.
I congratulate my hon. Friend on securing the debate. I declare an interest as the chair of the all party parliamentary group for packaging in the circular economy. Like her, I have engaged extensively with manufacturers across the supply chain. They support the EPR in principle but raise concerns about its implementation. Businesses need predictability, transparency and confidence. The current plan for annual adjustments to the recyclability assessment and methodology provides concerns about the long term capital certainty that our factories need in order to reinvest. Does she agree that it would be helpful if the Government would commit to periodic, rather than annual, methodological changes and a comprehensive post implementation review covering manufacturing, employment investment and material inflation?
I absolutely agree with my hon. Friend’s points. The methodology throughout—I will come on to it later—has been flawed, if not straight wrong in some cases. I would much rather that the research he is talking about—on the methodology—was done years in advance, rather than on the hoof as seems to be happening now. The Government seem to be suggesting that they will retrospectively look at what is happening and make adjustments, but unfortunately for a business and its bottom line, it is not possible to retrospectively charge people for something the Government choose to modify.
Let me state one inescapable fact. Glass is heavier than plastic—it simply is. By choosing to base fees on weight rather than on units, which they could have done, the Government are pushing businesses towards switching to a cheaper, less recyclable and much more environmentally harmful packaging. The industry has been told by the Department for Environment, Food and Rural Affairs that the modulation of fees will save glass, but let us be honest: this is too little, too late. Why not get the scheme right at the beginning, rather than trying to modify it later?
One of the largest employers in my constituency is Bostik, which is famous for Blu Tack. It also produces quite a lot of adhesives used in the DIY and home repairs sector. Bostik agrees with the scheme—it does not oppose the scheme in and of itself—but it does see one issue: although 95% of the company’s products go to site and are used by professionals, it will be charged the EPR on 100% of its products because it cannot trace every single item. It therefore supports the Builders Merchant Federation’s argument that commercial and industrial packaging should remain outside full cost recovery, because trade packaging waste is already covered through merchant distribution. Does my hon. Friend agree that the Government could consider that in the implementation stage, right at the beginning of the process?
My hon. Friend makes a point that I was not aware of. I have been in contact with loads of different industries, but not that particular one. It seems as though it is the same sort of double payment that hospitality is facing. That absolutely needs to be addressed.
Businesses have also been told that they need to move towards reuse systems. I am sure that both the points we are raising will be mentioned by the Minister in her response. It is true that glass is the perfect material to reuse, but it is not within the power of the glass manufacturing sector to force producers to move to use reusable bottles. Let us be honest: widescale reuse systems in the UK will take significant buy in from the whole supply chain and will take at least a decade to become a reality, by which point—let me also be honest again—we will not have a glass manufacturing sector in the UK to supply the reusable glass packaging.
The signal that the Government are giving to businesses is clear: switch away from glass right now. The result? We are seeing an evident and accelerated shift away from UK made glass towards both cheaper imports, which now account for—I am really surprised by this—14% of the market, and increasingly towards plastic.
I thank my hon. Friend for her tireless campaigning on this issue. We are joined in the Public Gallery by GMB glassmakers—I declare an interest as a GMB member—who are at risk of losing their jobs if the measure goes ahead in its current form. Will my hon. Friend recognise the human impacts that could come if we do not see a change in policy, and pay tribute to those workers in the sector and GMB for their campaigning?
I absolutely support what my hon. Friend says. GMB and Beatson Clark have been fantastic on this issue, as have other unions. We should never forget the human impact of the debates that we have in this Chamber. When we talk about numbers, percentages and import tariffs, we forget that it is the people making the products who are suffering the most and facing the uncertainty.
A survey conducted by British Glass found that nearly half of businesses say that they have already switched away from glass, or plan to do so, due to EPR fees. Once those decisions are made, and once investment is committed to new packaging formats, they are unlikely to be reversed. Glass manufacturing is not easily replaced. Furnaces represent long term capital investment—often hundreds of millions of pounds. Decisions about whether to rebuild or reinvest are already being delayed or cancelled, meaning hundreds of millions of pounds of investment in the UK is already being lost.
When production shifts overseas and capacity is lost, it is almost impossible to rebuild. I am not talking about short term disruption. I am talking about permanent industrial decline. If left unchecked, the policy will not just reshape the packaging market; it will hollow out an entire industry. With that decline, as my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier) said, comes something even more serious: job losses.
In my constituency we have three breweries—Verdant, Keltek, and St Ives Brewery based in Hayle. Does my hon. Friend agree that those breweries are about not just producing excellent product—which they all do—but the communities that grow up around them? Does she agree that there is a risk of social damage if we are unable to support those small breweries, and that this proposal risks that happening?
That is absolutely my concern. People do not talk about the impact on the supply chain. We already know that at least 350 jobs—more than 5% of the direct workforce—have been lost so far, but we do not know about the impact on the supply chains and associated businesses. These are not abstract numbers; these are well paid, highly skilled manufacturing jobs, concentrated in industrial communities like mine, where, to be honest, such opportunities are at a real premium.
Since I first raised these issues nearly two years ago, I have been contacted by a range of businesses and industry groups, including: UK Hospitality, the British Beer and Pub Association, the UK Spirits Alliance, the Society of Independent Brewers and Associates, O I Glass, the Scotch Whisky Association, the Wine and Spirit Trade Association, GMB, Unite, AB InBev, the all party parliamentary beer group, the APPG on packaging in the circular economy, the Packaging Federation, Teva Pharmaceuticals, British Glass, and the Campaign for Real Ale. Their concerns are strikingly similar.
The EPR is not just affecting glass. Across the packaging sector, businesses are struggling in the face of this poorly designed, poorly implemented policy. Graphic Packaging International employs 57 people in my constituency, and upwards of 1,700 across the UK. It produces a range of fibre based packaging for household goods, supplying major UK retailers with sustainable and innovative products, which are largely made from renewable or recyclable raw materials. However, like glass, they face unfairly high fees on the basis of being a heavier than their plastic equivalents.
That distortion is even greater for fibre based composite packaging. Industry groups have identified what appear to be substantial errors in the methodology used for DEFRA’s EPR fee calculations for fibre based packaging. By way of example, in the EPR fee cost breakdown, the cost of FBC collection is more than twice that of paper and board, yet it is collected for recycling with paper and board. How can the costs to local authorities be so radically different?
Similar anomalies are observed with other EPR cost categories, including sorting, residual collection and handling and disposal overheads. Costs for managing FBC should be similar to those for paper and board, yet are wildly disproportionate. Industry groups believe that that results from DEFRA seeming to have used data for another, wholly distinct type of FBC—beverage cartons—in its FBC fee calculation. Such elementary errors risk undermining the EPR’s core objectives. The Alliance for Fibre Based Packaging has already reported evidence that long standing shifts away from plastic towards more sustainable alternatives are slowing and, in some cases, reversing altogether.
I thank the hon. Lady for being so generous with her time. I remember her making the same points in her Westminster Hall debate on the EPR back in May 2025. I made similar points in my Westminster Hall debate on beer tax—draught duty—in which we also talked about the EPR. Does the hon. Lady agree that it is really disappointing that a year on, the Government, and DEFRA in particular, have not listened to our concerns?
I think it is infinitely more than disappointing, but I will follow the hon. Member’s parliamentary language: it is hugely frustrating. Colleagues here are raising the real, human costs of that. Something needs to change, and I do not want that change to be us losing our hospitality and renewable packaging industries.
Hospitality businesses have faced similarly unfathomable logic from DEFRA. EPR fees are meant to offset the cost to local authorities of handling and recycling waste. Hospitality businesses’ waste is not collected through public collections, but through commercial waste removal contracts. Yet perversely, the annual burden to British pubs for EPR fees has been estimated by the British Beer and Pub Association to be £50 million. Hospitality businesses are, in effect, being told to pay for the same thing twice. DEFRA has long been aware of this anomaly—I thank the hon. Member for Woking (Mr Forster) for his debate on it—but nothing has been done to address it.
Packaging EPR fees will disproportionately affect generic medicines, where high volume, low margin products risk becoming commercially unviable, increasing the likelihood of supply disruption, medicine withdrawal from the UK and higher costs to the NHS. Medicines manufacturers have minimal flexibility to redesign packaging, because primary packaging is tightly regulated by the Medicines and Healthcare products Regulatory Agency.
The Government’s one size fits all approach is revealed again when we consider social enterprises. The Minister will no doubt be familiar with Belu, which supplies water for parliamentary catering—indeed, Belu water bottles are in front of us on the Table right now. Belu donates 100% of its net profits to WaterAid, which supports clean water, sanitation and hygiene programmes around the world. However, while charities are rightly exempt from EPR fees, no such exemption exists for social enterprises, which are treated exactly the same as for profit companies. The result for Belu is £1.1 million of EPR costs over the next two years—money that would otherwise be donated to WaterAid.
The EPR system adds complexity and uncertainty for businesses. Baseline fees were not finalised until very shortly before liability for EPR was due to begin. Fee modulation remains unclear, and the system allows for retrospective fee calculation, potentially creating exposure to unplanned costs late in the financial cycle.
I wanted to pick up on the hon. Lady’s point about the complexity of the scheme, on top of the additional costs for small businesses. I have a fantastic vineyard in my constituency called Camel Valley, which has talked about spreadsheets being almost matrix like—branded, non branded and so on. It is so complicated for businesses to understand. Does the hon. Lady agree that as well as the punitive costs on our fantastic local breweries, vineyards and other businesses that she has described, it is the complexity of the scheme that is really holding back so many amazing businesses?
I completely agree with the hon. Member’s points, because I agree with the polluter pays principle—I believe that is at the heart of this issue—but the people who are paying are our workers, our hospitality businesses and the poorest people in the world who would have been getting £1 million. They are the people paying, not the polluters, because this policy is perversely driving businesses to using plastic, which surely is the exact opposite of what it should be trying to do.
With all of that in mind, it is hard to escape the conclusion that this is a poorly designed and implemented policy which is having a severe negative impact on British businesses. Despite these concerns, DEFRA has argued that the EPR will in fact create jobs, but that claim simply does not stand up to scrutiny. The figures are not based on official calculations and, critically, the jobs referenced are not comparable to those being lost. They are more likely to be lower skilled, lower paid roles in waste management, often at entirely different locations. These mythical jobs will not deliver the same economic value, will not support exports, and will not provide the same level of regional resilience. I must be very clear: we cannot replace high skilled manufacturing jobs with lower value roles and then claim an economic net gain. That is not growth; that is managed decline.
The EPR is also adding significant inflationary pressures that will be reflected in consumer prices. Producers expect to pass on the vast majority of EPR costs, often over 95%, to the end user. The upshot is that the EPR will not represent a boon to the public purse. On the contrary, this failed policy will cost the UK economy and that cost will be substantial.
I have raised these issues time and again, as have other Members. I have had meetings with Secretaries of State, Ministers and civil servants, and I have written, led debates and asked questions, all to no avail. This situation demands urgent action now, not a review in a year’s time. It requires not minor adjustments but immediate intervention to sort out this deeply flawed policy.
The glass industry has been clear in its ask: a targeted, time limited reduction in the glass EPR fees of at least 75%. This is not about abandoning the policy or doing a U turn; it is about fixing it. The Minister has the opportunity today to stabilise demand, prevent further switching away from glass, protect jobs and investment, and buy time to assess properly the real world impacts of her policy. Crucially, it would allow the Government to realign the policy with their own original environmental and economic objectives. More broadly, the Government must make sure that the EPR protects UK jobs and investment, that incentives towards less sustainable products are removed, that fees reflect real world costs, and that businesses have the clarity they need to plan and invest for the future.
Across the many sectors that have raised concerns about the EPR, support for its core principle has been universal. Businesses want to play their part in a circular economy, but the current system is not working; it is driving the wrong behaviours, undermining UK businesses, and putting jobs, investment and regional growth at risk. If we continue to get this wrong, the consequences will not be measured in tonnes or targets; they will be measured in job losses, lost industries and lost opportunities for the communities, like mine, that need them most.
I urge the Minister today at the Dispatch Box to put this scheme back on track.
I will be brief, because I know something else is happening this evening that others want to engage in. I am not entirely sure what that is, but apparently it is quite popular.
I congratulate my hon. Friend the Member for Rotherham (Sarah Champion) on securing this debate. I know about the glass industry and she has rehearsed some of the arguments in particular for producers of beer. I have had similar correspondence from various agencies about the perversity of a weight based system that precludes the use of a product that is infinitely usable and moves manufacturers towards plastic and thinner aluminium products because it is cheaper. I am sure the Minister will comment on that.
I want to talk about two things. I must first declare an interest as the vice chair of the all party parliamentary group on packaging in the circular economy, which is chaired excellently by my hon. Friend the Member for Redditch (Chris Bloore). I think it is quite clear that this is a good policy and a good system but that it has had some unintended consequences. We are trying to iron them out for the benefit of all.
In my constituency I have one of Premier Foods’ Mr Kipling factories. It has done a considerable amount of work on reformulating its plastic from red trays so that it can be recycled. It has also looked at how it can use cardboard better. It has looked at the use of its plastic film, which is really important for the freshness of its products, but that is obviously a product that it is trying to phase out. The high cost of looking at using the newer systems, particularly those that are too small for registration, such as biodegradable or organic films, means that there is an incentive to stick with the plastic manufacturing, which is a challenge.
I also wanted to touch briefly on the ceramics industry—of course, no debate in this place is complete without mention of ceramics. I say that in jest, but one of the things that the ceramics sector is dependent on, particularly the giftware sector, is people buying a product that is often shipped around the country. Most of those organisations will have a turnover that means that their products and packaging are registerable under the scheme. If I go online and buy a product from the European Union—something of appreciable aesthetics but of a much lower quality—and it is brought into the UK, there is a price differential, because of the cost of the packaging that it is shipped in. It becomes a disincentive for the UK purchaser to buy a British product.
If companies are shipping certain products, such as ceramics or glass, they need to be absolutely certain that the packaging is sufficiently robust, due to the fragility of the product being shipped. There are not that many alternatives. I know that some in the sector have looked at cardboard, but cardboard is a move away from polystyrene, and polystyrene is cheaper by weight, so they stick with the product that is actually more damaging to the environment.
Finally, because I know Members will want to go and watch association football—I believe that is what is on right now—there is also an issue for small innovative packaging firms that are looking at new material. I know that the Minister is scheduled to meet, or may have already met, an organisation from Staffordshire called WoolCool. They are using wool as a packaging product, and it is entirely reusable. People can use it in their garden, and the birds can take it away to make nests and so on. It can be used for all sorts of lovely things, even as a thermal insulator. It is completely reusable.
However, the company is so small that it was rated “red” until recently, which means that no one really knows what is going on with the costings arrangements. They end up not knowing what costs they might be faced with later on and, therefore, they do not know what costs they have to build into their business models. WoolCool is a small business that is trying to do something really ethical, and it is of real value to the local economy in Staffordshire. It is also trying to move away from those much more damaging products, but it is currently not sure what to do.
Can the Minister touch on how we will better engage with new manufacturers that are producing new materials such as wool? They have a real place in the future of our packaging industry and will create jobs in places such as Staffordshire. We need to ensure that they have an opportunity to grow and take away some of those damaging plastics, which is what we all want. I would be very grateful if the Minister could reflect on how we will make sure that the EPR weightings for those good, consumable products that we want the British public to buy, such as ceramics, are not disproportionately outpriced by foreign competitors because of our packaging rules in this country.
It is a pleasure to speak on this issue today. I thank my hon. Friend the Member for Rotherham (Sarah Champion) for securing this debate, and I thank all hon. Members who have spoken. We have heard from powerful advocates for the glass industry, the fibre based composites industry, the ceramics industry, the wine industry in Cornwall and, of course, the beer and pub industry, which we are all hoping to go and enjoy shortly.
Let me begin by also declaring my interest as a member of the GMB trade union. I recognise the challenging context in which the glass industry operates; that is a result of a range of global pressures, including the international increases in energy costs, volatile commodity prices, growing international competition, and substantial investment in decarbonising energy intensive manufacturing processes. I also recognise and acknowledge the industry’s concerns about packaging extended producer responsibility, or PEPR, which is an internationally recognised model used in more than 30 countries to transform recycling services. The model shifts the cost of managing packaging waste from taxpayers—that is us—to the producers who put it on the market. It is the “polluter pays” principle in action. Its introduction in this country is the biggest change to recycling policy in 25 years.
The policy was formulated under the previous Conservative Government. The right hon. Member for Newark (Robert Jenrick) is no longer in his place, but it was his Government who first began developing it back in 2018-19. There was a debate on it on the Floor of the House, in which he did not register his objections, and he did not vote against it. Perhaps he was absent, or chatting to his new friends in a different party.
Since PEPR has been brought in, the money raised from packaging producers and retailers has gone directly to councils to fund the introduction of simpler recycling—the new recycling collections that we have. That does not include the food waste collections, although they are part of simpler recycling. Last year, PEPR raised over £1.4 billion for local authorities to deliver better recycling services for people in every nation of the UK. Our goal is to get from 45% recycled—that is where we have stagnated over the last decade—to 65% recycled by 2035. That is an important goal. The food waste collections—they are not paid for through PEPR—are part of the simpler recycling reforms and a really important part of taking the methane out of our bins.
Let me come to glass fees. Last year, as my hon. Friend the Member for Rotherham rightly said, year 1 PEPR fees took account only of the weight and volume of materials. That reflected the cost to local authorities of collecting and disposing of the materials. Following her excellent Westminster Hall debate last year, we have worked at pace, and I am pleased to tell hon. Members that from this year—year 2—we are bringing in lower fees for more recyclable packaging.
Our latest data shows that more than 93% of glass will receive a “green” discount for being recyclable. This means that producers of harder to recycle “red” materials, such as crisp packets, will pay a premium. The system is designed to reward the right choices. The incentive to make the right choices will increase, because in years 3 and 4, producers of “red” materials—the more complex forms of packaging—will pay even higher fee rates than those do who use more recyclable, “green” materials, like glass. The forecasts that I have seen expect the glass sector to pay a decreasing share of PEPR costs in years 2 and 3. In year 4, that will fall even further, as the penalty for “red” packaging will reach double the basic “green” rate.
Can the Minister tell us whether that will be the 75% discount that the glass industry is asking for? Does she know what the falling rates will be, please?
Again, we have a complex system. I would very much like to give my hon. Friend the amounts per tonne, but that is not possible, much though I would like to give her comfort, until all packaging producers have reported their data in the autumn. We will then issue the invoices. I can say that the proportion that the glass sector will pay will fall year on year. We have been listening very carefully to the glass industry on that issue. PackUK, the scheme administrator, and officials at the Department for Environment, Food and Rural Affairs meet the glass sector and British Glass regularly, and PackUK ran a workshop just this week, which included British Glass, on how we can drive the use of more recyclable materials.
Everything that PackUK does is subject to four nation agreement. We had a meeting this morning with the devolved Governments, at which we talked through some of the issues. Wales, Scotland and Northern Ireland face very different challenges, and the challenges of collecting in inner city London are not comparable to those of collecting waste in the Outer Hebrides. The model is therefore complex from the recycling and collections point of view as well.
Returning to glass, PackUK and DEFRA officials will visit Ardagh Glass later this month. The visit was due to take place in June, but it was rescheduled at Ardagh’s request. PackUK also visited Encirc in Northern Ireland last month. I have spoken to the hon. Member for Runcorn and Helsby (Sarah Pochin) about the issue around the reduction in energy fees, but those do not apply in Northern Ireland. That is another—well, we could talk about Brexit, but perhaps we will not intrude on that private pain.
May I also say that since we debated glass fees last year, DEFRA officials have visited five of the six major glass manufacturers in the UK to hear from them directly, and that includes Beatson Clark? We are acting on their concerns. Also, we have investment in the glass industry in this country; we have a new electric glass factory at Verallia in Leeds.
Will the Minister give way?
I want to make a little bit of progress, if I may, because it is four minutes to kick off.
We have two and a half hours, Minister.
I want to make some progress, and my hon. Friend may find that I answer her questions.
PackUK has today published improved guidance on how recyclability will be assessed and rewarded. The glass section was developed in close collaboration with the glass industry and we have already received positive feedback. I hear what my hon. Friend the Member for Stoke on Trent Central (Gareth Snell) said about wool. When I see wool used as a coolant, it tends to come in plastic packaging, for hygiene reasons. That packaging can certainly be open up, and the wool can then be composted, but there is usually a film around it, and under the recyclability assessment methodology, that would incur higher fees. All this is meant to incentivise design for recyclability. I was due to meet a wool insulation provider this week. Sadly, I was not able to, but she was on her way down, and I believe that she met officials. I will check that later. I am keen to do work on this issue, because it is particularly important for the British wool industry, with wool at such rock bottom prices.
We are planning to launch a call for evidence this year to gather industry views, which will inform how we continue to reward the right choices. On the post implementation review, it will be conducted and published in the normal way, three years after the regulations came in. That is slated for December 2028.
It is reassuring that we are going to have the consultation. Would it not have been much better to have had it before the scheme was implemented? The Minister mentioned a meeting with my constituency business, Beatson Clark. That meeting only happened because I urged the previous Secretary of State and the Minister to make it happen, and I assume that the other examples of meetings that have taken place, or not, have been at the insistence of MPs. Why was that work not done before the scheme was rolled out?
I cannot speak for what happened under the previous Administration, but I can tell my hon. Friend that the scheme was announced in 2018, and a consultation happened in 2019. There was another consultation, but I cannot find the exact part of my pack on that. There was a full impact assessment of PEPR published in October 2020, setting out the expected overall costs to businesses. At that stage, it was not possible to assess the impact on specific sectors or regions, as fees and modulation had not been finalised. This has been a huge infrastructure project change, and a huge system change. The Environment Agency, acting as the regulator, holds the database of everyone who is a packaging producer. Elsewhere in the waste and packaging sector, we see large issues around avoidance, free riding and other issues, so we had to go through a massive piece of work with our regulator to ensure that everyone who is putting packaging on is meeting their obligations.
There were public consultations in 2019 and 202,1 and a consultation on draft regulations in 2023. There was a consultation with British Glass on the decision to use volume in the apportionment of kerbside recycling collection costs in July 2024, prior to the release of the initial set of illustrative base fees. I think that there was perhaps a misunderstanding, given that this had all been thought about and discussed for five or six years, that it was never going to happen. To be fair to the smaller companies, perhaps they were unaware of their obligations, or perhaps they were not obligated at that time, but have since grown and been brought over the de minimis threshold.
Let me talk a little bit more about what the Government are doing more widely to support glass businesses with their electricity costs.
I genuinely thank the Minister for being generous with her time. On the idea of a post implementation review, is there a way of looking at the time that businesses have to spend interacting with the scheme? The Titanic brewery in Stoke on Trent—very good beer, by the way—has told me that it took three weeks of one employee’s time to complete the assessment for the first year’s fees. I am sure that that is not by design, but in the review, will the Department look at how to make interaction with the scheme easier for small businesses that do not have much capacity?
My hon. Friend makes an excellent point, and this is something that I have been insistent with officials on. This is a complex scheme, and the more complexity we add into it, the more time it will take. There is a trade off here, and a set of difficulties, because we can do carve outs for x and y sector, but that creates more complexity in the recycling assessment methodology calculations for other parts of the packaging industry. We have to beware of making perfection the enemy of the good. I can also let my hon. Friend know that the chief executive officer of PackUK, Jeremy Blake, met the WoolCool CEO yesterday. I thought that had happened, but I am glad to have got the note telling me it is true.
Beyond this, we are supporting the glass businesses with their electricity costs through the British industry supercharger. Glass businesses now receive 90% compensation for electricity network charges. This brings their total reduction in electricity bills to an average of between £65 and £87 per megawatt hour. We are also supporting the retail, hospitality and leisure sectors with lower tax rates for their properties. On the issue around cheaper imports coming from overseas, the Trade Remedies Authority’s independent anti dumping and anti subsidy investigations into cheaper glass imports from China and Turkey are ongoing. That is dealt with by another Government Department.
We are working closely with industry to address the challenge of dual use—packaging disposed of in either business or household waste streams. We know how important this issue is to stakeholders across different sectors, including pubs, hospitality and medical packaging businesses, and construction. Indeed, I met a representative of the paint industry at a B&Q in my Coventry East constituency. Paint will always come in a tin or plastic container with a coating inside it, so it will never attract “green” fees, but we want to get that paint recycled, reused or repurposed. B&Q is doing some excellent work with the charity Neighbourly to ensure that paint has a second life. People do not know what to do with unused paint. Builders finish using a pot, then down into the drain the rest goes, adding to the diffuse water pollution that we are experiencing across our sewer network.
This is a tricky issue, but we need a system that can be effectively monitored and enforced. It is no good just saying, “Oh, everyone decides that all their stuff goes to the pubs” and then suddenly we are left with a massive shortfall in the fees, so it has to be verifiable. We are testing solutions, including for hospitality, and building on international best practice, looking in particular at the Austrian model. I held a roundtable with industry last year to look at solutions for the dual use challenge. It is difficult, but I hope for a solution on this issue soon that does not add undue complexity to the scheme or make it impossible for the regulator to verify.
I am sorry to detain the House. I am not sure if a try has been scored yet, but I am sure somebody will find out—
A try!
The Minister mentioned the super charger scheme and the impact for glass manufacturers. I know the super charger scheme is not her Department, but it is only for frontier industries. Can she say whether or not glass bottle manufacturers that go into the hospitality sector benefit from that? My understanding was that they do not because they are not considered one of the glass fibres or the industrial glass needed for the frontier industries.
I am looking to my officials in the Box, and I think it is probably safest if I write to my hon. Friend on that issue.
Let me tell the House about the year 1 shortfall in fees. There was a shortfall in the fees this year as we allowed packaging producers to submit their tonnages and then their tonnages reduced because, obviously, they looked at their figures and reduced them. We listened to industry on that. Despite the regulations saying that actually industry should make up any shortfall, my Department took pressure off businesses by funding on an exceptional basis to hold fees down. We are taking steps this year to ensure that we do not have a repeat of that.
On early successes, we are hearing about PEPR bringing about change. Councils all over the UK are using this funding from the packaging industry to improve services to local people. In Tameside, the metropolitan council is investing £1.6 million in new vehicles and improved technology to deliver a more reliable service for taxpayers. Councils are investing to improve glass collection directly, which should benefit the industry in terms of the supply of high quality cullet. For example, Aberdeenshire council is investing £5 million over 2 years to purchase a new three compartment glass collection vehicle—I hope that is “vehicles”, but it says “vehicle” here—upgrading glass recycling points to reduce contamination, and improving the quality of glass recyclate, which we know really matters to the glass industry.
I thank the Minister for being generous with her time. I am sure she can probably understand why I, Asahi, which is based in Woking, the hon. Member for Rotherham (Sarah Champion) and others are not satisfied with her answers today. I have heard nothing of the double taxation, which is what EPR is. Will she agree to meet me, the hon. Member, other MPs and, more importantly, the businesses impacted to fully understand the impact and to work out a way forward?
Perhaps the hon. Member was distracted when I mentioned the issue of me holding a roundtable with all these industries on this very issue, but I am happy to meet colleagues from across the House on these issues. I explained in the point that he perhaps missed that it is tricky because it has to be regulatable—we have to ensure that the regulator can verify what would happen. Of course, it is a complex micro econometric model. As soon as fees are reduced in one area, they go up in another area. That is the bottom line on all this.
I might have been distracted in the last eight minutes—I do not know why. I remember hearing that the Minister said she has held a roundtable. I do remember that it was last year, and I am keen for her to meet the stakeholders again before this wider consultation and what happens next—hence my request.
Obviously, I do not sit there and do the maths with people. These suggestions and potential solutions have to be modelled and worked through. We are working at pace to assess whether any targeted short term measures could be introduced through the forthcoming PEPR amending statutory instrument to partially address the dual use packaging issue. So we are working on a short term solution, but we are also working on a longer term solution, which is the Austrian model that I mentioned. Again, the hon. Gentleman may have been distracted by the whistle when I mentioned that.
Councils across the country are rebranding and upgrading their glass recycling points to make it easier for households to use glass recycling facilities and to reduce the contamination that we know is so important to avoid in glassmaking. We have made a £5.3 million investment in that over a couple of years, and those changes are happening on the ground.
As my hon. Friend the Member for Rotherham said, reuse is not a short term fix. It was once the norm when a lot of us—perhaps not all hon. Members present in the Chamber—were growing up, and it can be again. In some ways the future looks like the past—let us hope that is not the case for the England game. PEPR creates a powerful financial incentive for glass producers to move to reuse. Running reuse schemes means producers avoid most PEPR fee obligations, and glass, as we have heard, is a durable, tried and tested technology.
While it requires up front investment and system change, it shifts costs away from single use production and disposal, it improves supply chain resilience and reduces costs over time. Reuse is already operating at scale internationally, particularly for glass. Reusing a glass bottle just five times can reduce the greenhouse gas emissions by more than a third. The more times they are reused, the greater the benefits will be.
As we have heard today, the issue is not just about the environment; it is also about jobs, communities and the long term health of British industry. The industry estimates that these reforms will create 25,000 jobs and underpin £10 billion of investment in new sorting and processing facilities. The reforms will drive that improvement in our recycling rate and, crucially, they will reduce our carbon emissions.
In conclusion, glass matters, industry matters and glassworkers matter. This Government back businesses and workers, and we back the transition to a circular economy that makes the country stronger, cleaner and more resilient. Change is coming to EPR and I reassure all hon. Members that we want to have a predictable, well set out framework within which business can confidently operate and householders can confidently know that what they put in their recycling streams is going to have a second, and hopefully third and fourth, life.
Question put and agreed to.
House adjourned.
44|0|323|107|That the draft Employment Tribunal (Extension of Time Limits) (Miscellaneous Amendments and Transitional Provisions) Regulations 2026, which were laid before this House on 28 April, in the last Session of Parliament, be approved.
The House divided:|Question accordingly agreed to.||0|0
45|0|318|107|That the draft Employment Tribunals Extension of Jurisdiction (England and Wales) (Amendment) Order 2026, which was laid before this House on 28 April, in the last Session of Parliament, be approved.
The House divided:|Question accordingly agreed to.||0|0