Tuesday 31 October 2017
[Mr Peter Bone in the Chair]
Children’s Oral Health
I beg to move,
That this House has considered childhood oral health.
Good morning, Mr Bone; it is a pleasure to serve under your chairmanship today. I am glad that we have been granted this debate by the Backbench Business Committee, because child tooth decay represents a much bigger public health issue than appears to have been recognised so far. It is a problem affecting millions of children, including some of the most vulnerable. It should be a real concern to us all.
As well as thanking the various parties for their help in raising this matter, I also want to thank the Faculty of Dental Surgery at the Royal College of Surgeons and the British Dental Association for their efforts in helping to bring this issue to Parliament’s and the public’s attention.
Public Health England reports that 25% of all five-year-olds in England experience tooth decay in at least three to four of their teeth, and that in some parts of the country it can affect as many as 50% of all five-year-olds. Perhaps not surprisingly, there is a link between deprivation and childhood tooth decay, with the poorest areas suffering the worst levels of oral health and the least contact with dentists. A report, shortly to be published by the Nuffield Trust and the Health Foundation, shows that five-year-olds eligible for free school meals are significantly less likely to attend dental check-ups and have more difficulty in finding an NHS dentist.
If we look at the scale of the problem, we will see that more than 45,000 children and young people aged 0 to 19 were admitted to hospital in England over the past year because of tooth decay. They included 26,000 five to nine-year-olds, making tooth decay the leading cause of hospital admissions and emergency operations for that group. Last year more than 40,000 hospital operations for tooth extractions were performed on children and young people, which is the equivalent of about 160 operations every single day.
My hon. Friend is making an excellent speech. Does he agree that it is extraordinary that it appears that more children go into hospital because of poor oral health than because of broken arms, whereas when we were children it was definitely the other way around?
I absolutely agree with my hon .Friend. That gives us some sense of the scale of the problem.
Those 160 operations every single day are not only detrimental to the health and wellbeing of the children; they are also costly to the NHS. In the financial year 2015-16, more than £50 million was spent on tooth extractions for those aged 0 to 19. The average cost of a tooth extraction for a child up to the age of five is approximately £836, and there were some 8,000 such procedures during 2015-16. Dental treatment is a significant cost to the NHS, with spending in England amounting to £3.4 billion on primary and secondary dental care.
In Birmingham, 29% of five-year-olds suffer from tooth decay, which is significantly higher than the national average. Five-year-olds in Birmingham are three and a half times more likely to suffer tooth decay than those in the South West Surrey constituency of the Secretary of State for Health, and yet Birmingham is a city with fluoride in the water. In Manchester, where the water supply is non-fluoridated, the percentage of five-year-olds with tooth decay is 4% higher than in Birmingham. Hospital admissions related to tooth decay for those under the age of 18 in Birmingham have almost doubled in the past four years.
The way in which data are collected and the regional nature of the information sometimes mask the scale of the problems in the same towns and cities. We know that 20% of five-year-olds have tooth decay in south-east England, compared with 34% in north-west England. In Sutton Trinity ward in the Sutton Coldfield constituency, the figure is less than 10%, but the figure for another part of the same city—the Selly Oak ward in my own constituency—is 47%, which is almost twice the national average. Shocking as those figures might be, tooth decay is almost entirely preventable.
Many health experts now agree that early tooth decay can have a broader impact on health and wellbeing, affecting physical and mental health, and impacting on the child’s development and confidence. Poor oral health can also cause children problems with eating and sleeping, which often results in time away from school. Public Health England has conducted research on the number of school days lost due to tooth decay in north-west England. It shows that the average number of days lost per year was three, but many children missed as many as 15 days owing to dental problems.
Some might wonder why childhood tooth decay matters, because children lose their primary teeth which are replaced by new, permanent teeth. The issue is that a high level of disease in primary teeth increases the risk of disease in the permanent teeth. The child’s self-confidence may also be damaged. More than a third of 12-year-olds said in a recent survey that they are embarrassed to smile or laugh because of the condition of their teeth, and that can often make it harder for them to socialise.
So what can we do? There seem to be three crucial steps to addressing the problem: getting children to brush their teeth twice a day; ensuring they see a dentist regularly from a young age; and reducing the amount of sugar that children consume.
Scotland has been running an educational programme called Childsmile since 2001, which has been credited with making a significant improvement to children’s oral health. The programme supports supervised tooth brushing sessions in primary schools and nurseries, as well as providing twice-yearly fluoride varnishes. Perhaps we will hear more about that later.
A similar initiative, Designed to Smile, was introduced in Wales in 2009. Teeth Team, which is supported by Simplyhealth, has invested £137,000 in a dental programme that takes dental education directly to children in local primary schools in the city of Hull.
Teeth Team has visited one of the schools in Brownhills in my constituency. Does the hon. Gentleman agree that we need to further consider such innovative new schemes and other ways to educate children on dental health and tooth-brushing?
I absolutely agree with the hon. Lady. An education programme for young children and their parents is crucial. I want the Government to play a bigger role, but there are other approaches, too. As I have said, Simplyhealth is supporting the venture in the city of Hull and in East Riding of Yorkshire, as well as in the hon. Lady’s constituency.
A pilot programme called Starting Well is about to commence in 13 areas of England, although none of those pilots will be in Birmingham or the west midlands. I would be grateful for details of the pilot. How long will it run? How will it be evaluated? How were the 13 areas selected? It would also be useful to know exactly how the programme is being funded.
A new initiative by the British Society of Paediatric Dentistry, “Dental Check by One”, is seeking to raise awareness of the importance of getting young children to attend the dentist from an early age. It is supported by organisations across the dental professions. I am pleased to report that it is due to launch in Birmingham tomorrow, despite some torturous negotiations about funding. It seems likely that funding issues will prevent it from being implemented by other regional NHS teams.
What else might be done? Has any consideration been given to proposals from the Faculty of Dental Surgery to use school breakfast clubs to deliver supervised tooth brushing sessions? Analysis by Public Health England has suggested that if public health professionals such as health visitors are involved in supporting oral health improvement programmes, that can lead to significant improvements and long-term savings. Health professionals who have regular contact with children, such as midwives, health visitors, school nurses, pharmacists and early years practitioners, are all ideally placed to help identify children who may be at risk of tooth decay.
Equally, dentists look at all the soft tissues in the mouth and are often able to help identify a number of conditions, from diabetes and Crohn’s disease to oral cancer. According to recent figures on dental attendance, 42% of children aged 0 to 17 did not visit an NHS dentist in the 12 months to 31 March 2017.
Does my hon. Friend share my concern that a cursory review of the NHS Choices website yesterday showed that there are many areas of the country, including Keighley, where there is no advertising at all of dentists who are available to take on new children as patients? Might one answer to the age-old problem of poorer areas having fewer dentists be an expansion of salaried dentists in the NHS?
There is certainly an issue with access to dentists in some areas, although it is probably also true that some parents need to realise that visiting the dentist is free for children. There is certainly a question about how we incentivise dentists and provide better coverage.
As I was saying, 42% of children did not see an NHS dentist in the 12 months to 31 March 2017; in Birmingham, that figure is 47%. The Faculty of Dental Surgery has reported that, in the same 12 months, 80% of children aged between one and two did not see a dentist, but official advice recommends that children begin dental check-ups as soon as their first teeth come through, which is usually at around six months.
We may need to reconsider certain elements of existing dental contracts to see if we can better incentivise some dentists to pursue a preventative dental strategy with children. At present, three visits for fluoride treatment equal one unit of dental activity, which is roughly worth about £60 to the dentist. Perhaps we should look at that again. I am sure that both the Minister and local authority public health officials will be keen to remind me about money if I urge greater activity, but I remind hon. Members that parliamentary questions have revealed a clawback of £95 million through undelivered units of dental activity in 2013-14, rising by 36% to £129 million in 2016-17.
Dentistry remains a highly siloed service in the NHS and has been largely neglected from future NHS plans, such as the five year forward view and sustainability and transformation plans. As I have said, education programmes and regular visits to the dentist are needed if we are to begin to tackle the problem, but we also need action to tackle sugar consumption.
There are question marks over how likely the soft drinks industry is to meet the targets agreed under the voluntary reformulation programme. Earlier this year, the Food and Drink Federation announced that it was unlikely to comply with the optional 20% reduction in sugar content by 2020. It has also been revealed that it will be March 2018 before we even know whether the industry has achieved the first target of a 5% reduction by August of this year.
We desperately need to make significant progress towards reducing the amount of sugar in soft drinks and other products. The Government need to look again at their obesity strategy. As luck will have it, it is Sugar Awareness Week. What better time could there be for the Government to seriously consider the suggestion of the Local Government Association and others that we introduce teaspoon labelling on the front of high-sugar products? We should certainly look at advertising, and consider a ban on two-for-one offers and other price promotions on high-sugar products.
Childhood tooth decay is a problem that affects millions of children. It can be extremely painful and it often results in costly tooth extractions under general anaesthetic. Addressing tooth decay is not complicated; we know what works, and the actions I have outlined today could make a real difference. I hope that the Minister will consider those arguments, and that he is in a position to tell us that the Government are considering a series of preventative measures so that good oral health can be enjoyed by all our children.
Order. It might help the House to know that the wind-ups should start at about 10.30 am and seven Back Benchers are trying to catch my eye. I do not intend to impose a time limit, but perhaps Members will be aware of that.
I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on going through all the statistics, which means that I can cut my speech down immensely; I will put him up for an honorary degree as a dental therapist.
The hon. Gentleman is right: the statistics on child dental health are horrific. Deciduous teeth, or baby teeth, are particularly susceptible to decay as they have thinner enamel than permanent teeth. That is a contributing factor, but the problem is basically one of education, and it has gone on for decades. When I first practised dentistry in this country, in the NHS in east London in the early ’70s, I was struck by the appalling state of child dental health. Every Thursday afternoon, either I or a principal of the practice, with an anaesthetist, ran general-anaesthetic sessions. When I look back on them I am horrified, because the risks were considerable and such treatment is now banned. The children would all go to hospital now.
Those sessions were packed, and were almost entirely about extracting teeth from little children. It is appalling to think of it, but not as appalling as seeing those little children coming in, in pain after sleepless nights due to dental decay. If one wandered down to the local supermarket in east London, the stacks and racks of biscuits and sweets were considerable; the stacks and racks of what we would call wholesome food were minuscule. It was an education problem.
Prevention must be the way forward, because of the cost reductions. If one realises that Britons eat around 700g of sugar a week—an average of 140 teaspoons—one can see that reduction is needed. The intake is not spread evenly; it is higher in the north, lower in the south-east, and teenagers have the highest intake of all age groups, consuming some 50% more sugar on average than is recommended. That is another education issue.
The hon. Member for Birmingham, Selly Oak mentioned Childsmile—the set of Scottish tactics and methods for teaching kids—and that is very successful: more than 90,000 nursery schoolchildren take part. It is a programme of supervised tooth brushing, which has made some quite staggering gains; it has been mimicked in Wales and now here. England has an enthusiastic new chief dental officer, Sara Hurley. She and I will be arranging for every English MP to be invited, region by region, to meet her and others to discuss tooth decay problems among children and understand how we can move forward.
I have a few suggestions for the Minister, some of which have already been mentioned. We need a national oral health programme, such as that in Scotland, which should target poorer areas and areas of poor health, although this is not about poverty—it is about education. Sara Hurley is well on the way with a number of campaigns and areas where that is working. She, I and others have been working with local health and wellbeing boards to move into schools to run a check system that ensures that children, particularly in primary schools, visit their dentist once a year. If children had a little book, every child could be required by the head of the school to come back with an appointment card signed by a dentist to show that they had been once or twice a year. That should be a standard policy in schools.
Not just dental healthcare professionals but all healthcare professionals, such as midwives, health visitors and pharmacists, need to be given training. I remember an occasion when one of my kids visited a healthcare professional. The child was tiny. My wife had to listen to the healthcare professional say that fluoride and fluoride toothpaste were poisonous. I could not believe the ignorance!
Dental associations and groups should wake up—they are starting to—and should help dentists to help tooth-brushing campaigns and programmes. Such practices could be and sometimes are adopted in schools. The dentist does not have to go, but the hygienist and the nurses can. Toothbrushes and toothpaste can come from providers for free, and education can be linked. Kids—little kids especially—love brushing their teeth. Sara is trying to bring that into primary schools and nurseries, and perhaps to children as young as between one and two.
Far and away the biggest proven method of reducing tooth decay among children, and ultimately adults, is fluoridation of the water supply. As part of the health professional programme, the use of oral fluoride for children should be promoted by health workers. It is not, and it should be, because it makes a dramatic difference. My father was a dentist in New Zealand. I remember him saying that before fluoride arrived, trying to treat children with tooth decay was like trying to fill a bath with the plug out. Fluoride has dramatically changed the situation, and education and tooth brushing will change it even further.
In the United Kingdom, approximately 330,000 people have naturally occurring fluoride in their water supply at the optimum level. In addition, some 5.8 million people in different parts are supplied with artificially fluoridated water. That is about 6 million, out of a total population of 64 million—about 10% of the population. The percentage in the United States is 74%; in Canada, it is 44%; in Australia, it is 80%; and in New Zealand, it is about 70%.
The answer has to be a combination of fluoride in the water supply, fluoride in toothpaste—especially where there is none in the water supply—and, as the hon. Member for Birmingham, Selly Oak has said, using the opportunity to get out into schools and teach the kids. If we teach the kids, we teach the mothers. Dental decay is preventable; let us prevent it.
I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate. As always, it is good to have the pleasure of the vast experience and knowledge of the hon. Member for Mole Valley (Sir Paul Beresford) on this subject. I thank him for his contribution.
I am the Democratic Unionist party spokesperson for health, so this issue is very much on my radar. I will give some stats—the hon. Member for Birmingham, Selly Oak gave some, but I will give different ones. That does not make me any more of a statistician or an honorary member of any statistical organisation, but they are important for me because they are from my own region.
I can remember, as a child, my mother taking me to the bathroom and scrubbing the life out of my teeth; we can all probably remember something similar. When I was old enough to brush, but perhaps not old enough to know the importance of brushing, there were mouth checks, which reminded me of checking a horse’s mouth to see the health and age of the horse. Rather than understanding why it was essential that we brushed our teeth, I was probably more afraid of not having my teeth brushed and my mother doing it for me. The hon. Member for Mole Valley mentioned an increase in that among young children, which is good news. I am afraid that we do not see all the stats and realise the importance of that in Northern Ireland.
I believe that we are all fearfully and wonderfully made, as it says in Psalms, and that the intricacy of our body does nothing other than point to our creator God. Why else would we have two sets of teeth—the baby teeth that we probably abuse, which decay and fall out, and then the adult teeth? I know some adults who probably wish that they had a third, and possibly even a fourth, set of teeth.
I commend the previous Health Minister, David Mowat, who launched the new programme in January this year. I look forward to the present Minister’s response, which I know will be equally committed. A briefing I received for the debate made very interesting reading, and it all points to prevention. Tooth decay is the most common reason why five to nine-year-olds are admitted to hospital. In Northern Ireland, some 5,300 children were admitted to hospital for tooth decay and extractions, with 22,000 baby teeth removed. Moving on to 12-year-olds and teenagers, the signs of decay in permanent teeth are significant.
The hon. Members for Birmingham, Selly Oak and for Mole Valley have both referred to the need to control the intake of sugary drinks and foods. As a diabetic, I am well aware of the need to control sugar. Coca-Cola used to be one of my favourite drinks, but it is not any more—not because I dislike it, but because it was doing more harm than good and I had to stop drinking it. We need to have that control, and parents have a role to play.
There are significant regional and socio-economic differences in dental health across England—the numbers of those with tooth decay in the south-east compared with the north-west, for example; the difference is almost double. Perhaps the Minister will reply on that north/south difference. In some areas, seven times as many children are affected than in the best performing areas, where only 8% are affected.
Northern Ireland is at the bottom of the league table for oral health. I am not at all proud to say that, but it is a fact of life. We have a lot to do, in what is a devolved matter in Northern Ireland—at least until we find out where the Assembly is going, in which case the role over here might become greater. The 2013 children’s oral health survey showed that Northern Ireland had the worst oral health outcomes in the UK, and highlighted the difference in the figures compared with outcomes in England. Some 72% of 15-year-olds have signs of decay in Northern Ireland, compared with 44% in England and 63% in Wales. We have a lot to do, and we need to start that in primary school. The hon. Member for Birmingham, Selly Oak suggested education at primary school breakfast groups as a way of doing that. I think that would be excellent.
Of the 4,000 parents questioned in the Simplyhealth professionals oral health survey, 51% said that getting their child to brush his or her teeth for the recommended two minutes twice a day was a challenging task. Well, I think children are always challenging, but that is certainly one of the things that we need to do. The view has been echoed by members of my staff, who said it is as tough to get the seven-year-old grandchildren to do a good job as it is the two-year-old. That is a battle many parents face and they will do many things to try to encourage children. There are even such things as singing toothbrushes, as one method that may encourage children. It may help set the timespan, but the quality of brushing during that time could be questionable. To listen to the sound of a singing toothbrush is one thing, but brushing teeth has a purpose and we need to focus on that.
Children who experience high levels of oral disease, and are treated with fillings and other restorations, will require complex maintenance and treatment of new oral problems as they grow older. We are all aware that dental treatment is a significant cost to the NHS, with spending in England amounting to £3.4 billion. Some £2.3 billion is spent on private dental care. The NHS spends £50 million on tooth extractions for children, the majority of which are due to tooth decay. Shockingly, 42% of children did not visit an NHS dentist in the year ending 31 March 2017, even though such check-ups are free. The National Institute for Health and Care Excellence recommends that children see a dentist at least once a year, but 80% of children between the ages of one and two did not visit a dentist in the 12 months to the end of March. Those statistics are important, because they show us where we need to focus our attention.
I am conscious that other hon. Members wish to speak, so I will conclude with this. Drastic action must be taken, but for that to happen we need a funding regime so we can do more for children in schools and through the healthcare system. More needs to be done in socially deprived areas, because there is a north-south divide when it comes to those affected by tooth decay. We must ensure that parents prioritise oral healthcare and are able to access a dentist for their child easily and without fear that they will be judged or told off. Something needs to be done. We must ensure that there is not another generation of people in agony due to their teeth. Having had toothache, I know my heart goes out to those who suffer from it. Tooth decay is preventable, so we must do all we can to prevent it in our children. We should start as we mean to go on.
On a point of order, Mr Bone. I was so enthusiastically carried away by the opening speech that I cannot remember whether I declared that I am a very part-time dentist. If I did not, I have now done so.
I think hon. Members knew that, but thank you for putting it on the record. We have got about half an hour to go, and five Back Benchers wish to speak. I work that out to be roughly six minutes each.
I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing a debate to highlight this important issue.
We cannot overstate the fact that, as the hon. Gentleman said, oral health problems are the most common cause of admission to hospital for children aged five to nine. I am a children’s doctor—a consultant paediatrician—and I am responsible for the children on the children’s ward in Peterborough City Hospital. They often come in not because they are unwell but because they have had too much sugar and have not had their teeth brushed effectively; their teeth have become rotten, painful and uncomfortable and need to be removed.
As my hon. Friend the Member for Mole Valley (Sir Paul Beresford) said, behind the statistics there are children who are in pain and discomfort, and whose teeth are hurting. They may not want to eat—children who have tooth decay are lighter. There are other reasons for that, but in part it is because they do not want to eat because it hurts when they do. They cannot sleep, which affects their educational performance. As they get older, they do not want to smile because of the embarrassment and discomfort it causes, and that has an impact on their ability to socialise with other children. Perhaps most worryingly, more than 8,000 pre-school children are admitted to hospital each year to have teeth removed. Those children are not responsible for brushing their teeth and do not choose what they eat. Their parents or permanent care-givers are entirely responsible for all aspects of their dental health.
There are two ways to tackle this problem. First, we should address the issue of sugar. I welcome the Government’s proposed sugar tax, because it will encourage children to drink water, which in many areas is fluorinated and better for teeth, rather than sugary fizzy pop, which, as well as containing high levels of sugar, is strongly acidic and therefore detrimental for teeth. It would help if the tax were directed towards sugary drinks, and not spread out across the different drinks that the manufacturer makes.
Secondly, schools should educate children about what to eat. Last week, I went to Washingborough Academy in my constituency, which has an innovative programme for improving school meals for its primary school children. It has a vegetable patch and a fruit orchard in the school playing field, where the children grow their own food and learn about where their food comes from.
The hon. Lady is making some excellent points. When I was a council leader, I introduced free school meals for all children up to the age of 11 in all of our primary schools. That increased the take-up of free school meals to 90% across the borough and improved oral health.
That is an interesting point. The hon. Lady is right that it is important that our children’s school meals are high quality and as healthy as possible.
There are other issues relating to the mechanism by which children consume food. In my profession, I have seen pre-school children given Coca-Cola to drink not in a cup but in a sippy cup or even in a baby bottle with a teat. That is particularly harmful for children, and there should be more education about the fact that it damages teeth. Once children get past 12 months, they should be encouraged to move from bottles and sippy cups on to proper open cups, so that sugary drinks are in contact with their teeth for a shorter period.
If the child is of pre-school age and the parents do not take them to a dentist for whatever reason, health visitors can provide some of this education. It should be part of a health visitor’s role to encourage good oral hygiene in children.
I do not whether I am ageing myself here, but I remember being given disclosing tablets at school and rushing off into the school lavatories to brush my teeth to see what the horrible blue dye had done to the inside of my mouth. I was horrified because, although I thought I had done a great job of brushing my teeth, there was quite a lot of blue staining. That powerful tool should be available to all of our children. My children have recently come home with toothbrushes, toothpaste and some of those lovely tablets. Hopefully, they will have a good effect.
In my reading for this debate, I came across some research in health journals that suggests that the strep mutans and streptococcus sobrinus bacteria increase children’s likelihood of getting tooth decay. In families in which the diet and the amount of sugar consumed is the same and the amount of tooth-brushing is similar, some children get more tooth decay than others. Research suggests that that is due to those bacteria, so we should aim to reduce their presence in the mouth. I will be interested to hear the Minister’s thoughts on that point.
I am pleased that the hon. Member for Birmingham, Selly Oak secured this debate. I congratulate him on raising this issue.
It is a pleasure to serve under your chairmanship, Mr Bone. I recently led a well-attended Adjournment debate on the growing crisis in NHS dentistry, and I was encouraged that that critical topic received such wide-spread support. I thank my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) for securing this important debate.
I believe that momentum is building for a change in Government oral health policy. The injustices in child oral and dental health provision deserve greater prominence in debates about this country’s faltering health services. For too long, oral and dental health has been overshadowed by understandable concerns about other areas of the NHS, but addressing wider issues in our NHS should not mean that we forget to take action elsewhere. For too long, oral and dental health has been the Cinderella service of our NHS. That must end.
During my Adjournment debate, I spent considerable time setting out the growing crisis in NHS dentistry for our children and young people. I highlighted the BBC’s recent investigation, which laid bare the scale of the challenges. Shockingly, two in five of the 2,500 dental practices registered on the NHS Choices website were unwilling to accept children as new patients.
NHS treatment is so important. For our children and young people, it can be life-defining. It can be a springboard to a life marked by enduring oral health and wellbeing. It can be the bedrock of successful, healthy and prosperous lives through childhood and into old age.
The unnecessary financial cost of our children’s poor oral health to the NHS is staggering. At a time of huge pressure on our NHS, the Government are wasting a forecast £50 million each year on tooth extractions for our children and young people. The average cost of a tooth extraction is £834. Last year alone, almost 40,000 children were admitted to hospital for multiple tooth extractions, which is shocking as it is an entirely preventable condition. Sadly, that situation is getting worse and tooth extractions are up by 25% in recent years. Across the country, tooth decay is the No. 1 reason for children being admitted to hospital.
Following my Adjournment debate, I was grateful to meet the Minister. I felt that we had a constructive meeting and that there was a good chance that at least some progress would be made to improve the availability of NHS dentistry in my constituency and the surrounding areas, where the need is so clear. Three weeks on from that meeting, however, and some six months on from the conclusion of an NHS pilot in Bradford designed to improve the availability of NHS dentists to the people I represent, I am still waiting to see the official assessment of the pilot.
I asked about the report on the pilot in a recent written question, and yet it remains elusive. I suspect that the official report remains so because it confirms more than a few inconvenient truths: that the take-up of the additional NHS dentistry appointments under the pilot was overwhelming—I understand from the previous Minister that take-up was 92%, even on an unadvertised pilot—and that there is therefore overwhelming evidence that NHS dentistry provision in my constituency is abysmal and requires a huge funding uplift. Indeed, a freedom of information request submitted to the Bradford hospitals trust revealed that, in the short period of April to December 2016, 190 of our children were admitted to hospital to undergo multiple tooth extractions.
I ask the Minister again to reflect on such disturbing figures and, as I have his attention, I reiterate my request that he shares with me the official assessment of the recent pilot in Bradford as a matter of urgency. Once again, therefore—twice in a few short months—I am urging the Government to act, because each year 40,000 of our children are undergoing multiple tooth extractions in our overstretched NHS. I urge the Minister to take action; it is long overdue, and inaction is not an option. Our children and young people frankly deserve better.
It is a pleasure to serve under your chairmanship, Mr Bone.
As several speakers have said, this issue really matters, and it matters throughout people’s lives. A poor set of teeth can affect confidence, which can affect life chances significantly. It is shocking that the most common cause of hospital admission among five to nine-year-olds is tooth decay. According to a recent parliamentary answer, in 2015-16 some 917,346 tooth extractions were performed on children.
I note that in a recent publication the Royal College of Paediatrics and Child Health called for a child’s first dental check-up to be recorded in their personal child health record—that is supposed to happen by the age of one—and for paediatricians to include oral health in the assessment of all-round children’s health. If the first check-up happens by the time the child is one, we can set good habits in place and parents will carry on, knowing that dentistry is free for children.
On fluoridation of the water, which the hon. Member for Birmingham, Selly Oak (Steve McCabe) and my hon. Friend the Member for Mole Valley (Sir Paul Beresford) talked about, I will quote from a Public Health England document published on 14 June 2017. It says:
“An authority considering fluoridation will be met with claims that it does not work and that it causes harm. Both statements are untrue. PHE’s Water fluoridation: health monitoring report for England 2014 concluded that fluoridation is an effective community-wide public health intervention.”
We must be guided by the science in this issue. Many years ago, when I stood for election in Sunderland North, my Labour opponent came out with totally unscientific and untrue statements. We must be guided by the evidence, and I am pleased with what the hon. Gentleman and my hon. Friend said. The evidence seems to be clear that fluoridation is effective. Given the scale of the problem, we should do something about it.
Schools should be sugar-free zones as much as possible. I back banning the advertising of sugar products before 9 pm and would like to see an accelerated product reformulation programme. It is concerning that the reformulation data from August this year will not be made available until March next year. That is an area the Select Committee on Health is taking a close interest in.
As a nation, we have to wake up to the importance of child oral health and not be leisurely about it. It is a public health emergency and there is a degree of urgency to the issue that I want to see reflected in the Department of Health. We could ensure that all sports, education and health settings refused to put sugary drinks in vending machines.
The hon. Gentleman is making some excellent points. Does he agree with me that the amount of sugary drinks and products for sale in leisure centres and hospitals seems to send a mixed message?
I agree with that. Some of the food companies set a lot of store by their links with sport. Of course sport is a good thing—we should all take more exercise—but the key is good oral preventive hygiene and consuming less sugar. When we consider that five-year-olds are consuming their own weight in sugar, we begin to see the scale of the problem. I agree with the point made by the hon. Lady.
I have the pleasure of serving on the Health Committee with the hon. Member for Central Ayrshire (Dr Whitford), who will shortly be speaking for the Scottish National party. She has often told us that Scotland has got certain things better than England, and some of the time she may have been right. On this issue, we can learn from what is happening in Scotland, as my hon. Friend the Member for Mole Valley said as well.
Chapter 3 of the report from the Royal College of Paediatrics and Child Health, which I quoted from earlier, includes some graphs that show improvement in children’s oral hygiene. Somewhat irritatingly, the graphs end in 2013, but the rate of improvement in Scotland is clearly shown to be superior to the rate in England, Wales or Northern Ireland, as a result of the Childsmile programme, which I understand costs £17 per child. Set that cost against the £836 average cost of a child tooth extraction and, for my money, I would rather put more focus on prevention. I want to see the English treated as well as other parts of the United Kingdom.
The hon. Gentleman cites a figure of £17. That is an average and is obviously not how the money is spent. It is very much targeted at children in areas of deprivation.
I am grateful to the hon. Lady for that clarification.
We now have a number of breakfast clubs before school, and the introduction of tooth brushing in them would be a good idea. I was pleased to hear my hon. Friend the Member for Mole Valley talk about the importance of education. Only a few years ago my own dentist told me about the importance of interdental brushes, which I do not think any other Member has mentioned yet. I do not know how effective they are for children—perhaps the Minister’s officials know and he will tell us when he winds up. Mouthwash is also important. Just getting the best possible prevention practice out there, including what we and in particular children should do, is really important if we are to make progress.
It is a pleasure to serve under your chairmanship, Mr Bone.
I congratulate my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate on child oral health and tooth decay. I agree with all his comments, in particular those about sugar consumption and supermarket offers on high-sugar products. Anyone who has been in a supermarket over the past couple of weeks will have seen the huge amount of Halloween offers on sugar products for children for trick or treating—“two for one” or “buy one and get four free” and so on.
Poor oral health is an extremely important yet too often ignored issue that represents a major public health challenge, both in relation to its adverse impact on our children’s health and wellbeing and to the NHS budget and wider resources. We have already heard that when it comes to oral health, too many of our children quite literally have nothing whatever to smile about. Every area of the country is affected by poor childhood oral health to varying degrees, including Coventry, the city that I represent. The proportion of five-year-olds in Coventry with tooth decay stands at almost 30%, which is considerably higher than the England national average of 25%. Worryingly, the proportion of hospital admissions for tooth extractions in the city has increased by a massive 60% since 2010.
Children with poor oral health are likely to have decayed, missing and filled teeth that can cause severe pain, infection, sleepless nights, weight loss and developmental problems. But not just their physical health is adversely affected; they also often experience psychological problems such as low self-esteem, a lack of confidence, conduct disorders, reduced school performance and social functioning, and an increase in bullying. These physical and psychological problems combined are likely to have a huge impact on a child’s life and even on their long-term life chances, as we have heard.
There are significant pressures on NHS services and finances. Tooth decay is the leading cause of hospital admissions for young children and the NHS wastes hundreds of hours and millions of pounds each year dealing with the consequences of the problem through tooth extractions that range from a single tooth to full mouth clearances—a dreadful thought in children so young. All that proves that the economic costs of childhood tooth decay are as unsustainable for the NHS as the human costs are unacceptable for the child.
We can stop tooth decay in its tracks, because it is almost entirely preventable, as we have heard. We can tackle the problem by providing better oral health education, by improving public awareness of and access to children’s dental services and by addressing poor diet—particularly excessive sugar consumption. I agree with all the measures to prevent tooth decay that have been mentioned. But clearly, the statistics show that more needs to be done. Simple preventive steps and accessible information can mitigate the impact of poor oral health both on the individual and on our health services. Surely we can all get behind that.
It is a pleasure to share my thoughts and experiences under your chairmanship, Mr Bone. I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate. As he said, it is Sugar Awareness Week, so this debate on tooth decay is timely.
It is well recognised and accepted that the amount of sugar that children eat has an impact on both oral health and obesity rates, and that there is a link between poor oral health and some of the most deprived parts of the country. Poor oral health and obesity are both issues of health inequality. Tooth decay and obesity also represent major public health issues. If we put measures in place to tackle one, we will tackle the other at the same time.
Tooth decay is the leading cause of hospital admissions for young children. Local data show that one in five children in Erewash suffers from tooth decay by the time they are five years old. That is better than the national average of one in four, but children in my constituency are still twice more likely to have tooth decay than their peers in the parts of the country with better performing local authorities; even though the data are better than the average, they are still not good enough.
In the last five years, 170 children in Erewash have been admitted to hospital to have their teeth extracted under general anaesthetic. That is 170 too many. Nationally, about two thirds of such hospital extractions are due to extensive tooth decay. When I looked further into local data, I found that almost half of children in Derbyshire did not see an NHS dentist in the year to April 2017. I find that extremely disturbing because children should have check-ups at least once a year. Tooth decay is 90% preventable; as has already been said, NHS dentistry is free for under-18s, so there is no excuse. Stopping tooth decay would prevent a great deal of pain and stress for children and the potential for bullying. If tooth decay was made a priority for the NHS, a great deal of money would be saved.
I am extremely concerned about the impact of sugar on our nation’s teeth, but I want to expand a little about the impact of sugar generally. Almost a year ago, Cancer Research UK revealed that, on average, teenagers drink almost a bathtub full of sugary drinks a year. Hopefully, such a visualisation—a bathtub full of sugary drinks—will shock some teenagers into changing their habits rather than suffering the consequences that we have heard about. The average five-year-old consumes their own weight in sugar every year. That is horrendous. There is no doubt that such sugar consumption will have an impact on dental health, but also it will have an adverse effect on the current and future health of our nation.
Sugar, tooth decay and obesity are linked. Obesity is now recognised as a major cause of type 2 diabetes, which is now a disease seen in teenagers rather than just the elderly. Obesity is also a major cause of cardiovascular disease and cancer. If young people’s sugar consumption continues and our young people manage to escape tooth decay, there are other health issues waiting for them down the road.
As a member of the Health Committee and chair of the all-party parliamentary group on adult and childhood obesity, I was disappointed by the “Childhood obesity: a plan for action”, published by the Government in August last year. The Committee asked for bold and brave action, but sadly we did not get that. Tackling obesity also tackles tooth decay, so I welcome the sugary drinks levy and the ring-fencing of the moneys raised from that for children, but I want to go one step further. Could some of that money be dedicated to teaching children how to clean their teeth—perhaps through the breakfast clubs some of that money will be dedicated to?
The levy is only a drop in the ocean. I want to take the opportunity to ask the Minister, first, to work with retailers to limit price promotions on high-sugar food and drinks and to encourage the removal of those products from the point of sale—to consider legislation if necessary. Secondly, will the Government update broadcasting regulations, to ensure that high-sugar products cannot be advertised on TV before the 9 pm watershed? Thirdly, will the Government build on the new rules from the committee of advertising practice, to prevent high-sugar products from being advertised in non-broadcast children’s media and to close the loopholes?
Let us really show that we care about both the dental health and the general health of our future generations, and take action now.
Let us admit that, before Childsmile, Scotland’s children started with much worse teeth than those in England and Wales—seeing people in Glasgow with no teeth at all was a common sight. I was quite shocked when I attended a dental health meeting in Parliament after being elected: I met a dentist carrying a bag of more than 100 children’s teeth that she had removed that day. That was when I first realised the difference between the approaches in Scotland and in England and Wales.
Although there were some pilots and proposals in 2005-06, the Childsmile programme kicked off in December 2007, so we are coming up to the end of the first decade. It has transformed dental health in Scotland, although there is no question but that we have further work to do. Overall, extractions have gone down by a quarter, while extractions in England have gone up by a quarter in the past decade. That has to be looked at. Children losing their teeth must be seen as a health failure.
The core Childsmile programme consists of all nursery school children undergoing education about cleaning their teeth, and undergoing supervised teeth cleaning every single day. Provision of 30 hours’ childcare in Scotland is being rolled out to all children, not just the children of working parents, and that gives us access to even more children, including vulnerable two-year-olds.
The core programme, which, as was mentioned, includes 90,000 children, is the main driver, but we also have a practice programme, which involves all NHS dentists in Scotland. That programme links dentists with health visitors and public health nurses. If a health visitor is aware that a family is not registered with a dentist and is not active in preserving its dental health, they can refer that family and its children to a dental health support worker, who will follow a child up from the age of three months and ensure that they attend a Childsmile-registered dentist. That is crucial.
We hear that 80% of one to two-year-olds and 42% of children aged 16 and 17 in England do not attend a dentist, even though the advice is that children must have attended by the age of one and that they should get an annual check. It is crucial that that changes. It is also important that, as well as their dental check, children access twice-yearly fluoride varnishing, which makes a key difference.
Glasgow, which had the worst teeth in Scotland and probably the worst teeth in the UK, has improved dramatically. We still have more work to do—there is still inequality, and there are still more caries-free five-year-olds in England than in Scotland—but the proportion of caries-free five-year-olds in Scotland has improved by 50%, from 45% to 69%. There has been a one-third improvement among primary 7 children, who have their second teeth, from 59% to 77%. Inequality has reduced. Some 56%—more than half—of children in the most deprived areas of England have caries at the age of five. That just is not acceptable, and it needs to change.
It is important to drive education and to improve dental health, but the underlying problem is the difference in contracts. Since 2006, dentists in England have been paid for units of dental activity. There are three bands, from simple activity such as examinations, cleaning and advice, up to complex work at band 3, but dentists get only one payment for a band 1 unit of dental activity no matter how much they do. They are paid the same rate for doing an examination, providing advice and doing fluoride varnishing as they are for doing only a check-up. That means that they are not rewarded for prevention, whereas dentists in Scotland are paid for doing fluoride varnishing and fissure sealants. That situation in England undermines the basic principle.
In Scotland, there are also additional payments for children with disabilities or learning difficulties, because we know that they take dentists more time. Those payments mean that dentists invest in those children to try to prevent future dental ill health. Children with learning difficulties in particular tend to have very poor teeth, because we cannot just educate them to clean their teeth; the people around them need to commit to doing that.
Lack of registration is another issue. In England, people are not registered with a dentist for the long term, so why should a dentist invest in someone? Children turn up and try to access a dentist when they have problems. Recent BBC articles suggest that 40% of children in England are unable to access a dentist. If a dentist is paid the same for one filling as they are for 10 fillings, they will not want to take a child who clearly already has very poor dental health. Again, there is no sense of investing in the future.
I hear what the hon. Lady says. The success in Scotland has been dramatic, and the importance of dentists is dramatic—I would have barbs in my back if I said anything else, as she can imagine—but the biggest success has been the prevention programme with schools, nurseries and so forth. That outweighs everything else. That has been the reason for the Scottish success.
I thank the hon. Gentleman for that intervention. I was not trying to give any other impression. I said that the core programme is the education of 90,000 children about how to clean their teeth and discussions with their parents about that. The problem is that we waste an opportunity if we stop there. There needs to be a link between health visitors, nurseries and dental practices, and there certainly needs not to be a contract that punishes and penalises dentists for investing in patients. The fact that dentists do not have long-term registered patients means that they do not look at patients with a long-term view and say, “If I do more work now, they will have better dental health later.”
In Scotland, 92% of the population is registered; the number of people who are registered has risen from 2.6 million to 4.9 million. Registration is actually higher in deprived areas than in rich areas. Unfortunately, attendance is not always higher, but people are at least already registered with a practice.
The hon. Lady is making an excellent speech. I am conscious that this debate is about children’s oral health, but does she accept that, given the growth in the elderly population, the problems that she has indicated will only get worse if we do not have better registration and intervention?
I totally agree. In so many areas, the health of an adult—even an elderly adult—is actually laid down in their first five years. That is nowhere clearer than in dental health. Laying down good foundations in childhood is critical to allowing many more older people to have healthy teeth and, in particular, healthy gums—in the end, more tooth loss is due to gum disease—and to hang on to their teeth. Registration is important, because it gives people a relationship with a dentist. For people who are frightened of the dentist, knowing their dentist and having access to extra support such as hypnosis, if that helps, is valuable.
Childsmile costs £12 million a year in Scotland in terms of total dental health, but it has saved £5 million in dental treatments and extractions. We heard from the hon. Member for Birmingham, Selly Oak (Steve McCabe) about the money that is coming back. That could be used to set up a programme in England. I welcome the pilots, but those are in only 13 of the 23 worst areas in England. Why do the UK Government feel that they need to pilot? The evidence is there from 10 years of Childsmile in Scotland. If they just looked at the data and designed a national programme for England, in the end they would save not just money but children’s dental health.
It is a pleasure to serve under your chairmanship, Mr Bone. I am grateful to my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) for bringing this important issue to the House’s attention. This debate is long overdue, as has been said by Members on both sides of the House. There is much agreement, and it has been really useful to hear from experts in the field—our dental and paediatric colleagues in particular.
We cannot say too loudly or too often how shocking the current state of affairs is. The hon. Member for South West Bedfordshire (Andrew Selous) quite rightly said that we have a health emergency. We cannot stress too often the truly shocking statistics that have been touched on. The biggest cause of hospitalisation for five to 10-year-olds in England—bigger than broken arms, asthma, appendicitis and all the other things that we think about children being taken to hospital for—is teeth extractions. Up to 160 children a day are undergoing general anaesthetics in our hospitals for what is preventable, and a quarter of all our five-year-olds have decaying primary teeth. In some areas of the country the situation is far worse. Deprived children are seven times more likely to suffer from tooth decay than their peers. Indeed, in some areas of Lancashire, 56% of children are affected.
Another shocking statistic I came across in preparation for the debate relates to the shortage of dentists. The hon. Member for Erewash (Maggie Throup) rightly said that NHS dental checks are free for under-18s, but accessing an NHS dentist is not easy in many parts of the country. Only this week, Cornwall has reported a backlog of 14,000 people waiting to access an NHS dentist. Some people are having to travel 70 miles to see a dentist.
What effect is that having? We have heard extensively from Members of all parties about the effect on children. There is obviously suffering in terms of the pain of dental decay, and we have heard about the effects on childhood confidence. We have also heard about time lost from school. This goes beyond the suffering of children. We cannot afford to ignore the issue, given its effect on our economy. Even if we wanted to ignore the effect on our children—I am sure none of us does—all the evidence suggests that last year 1.2 million working days were lost as parents took time out of work to care for children who had oral health issues.
Of course, we cannot ignore the pressures on the NHS. We hear every week in this House about funding issues in the NHS and how it does not have the funding it so desperately needs. This preventable issue costs the NHS £5 million a year. That cannot go on—it makes no sense.
What are the answers? There are no quick fixes. Many Members have raised interesting ideas, and I think the answer lies in a combination of them. I hope the Minister will talk about his plans to reform the dental contract and that that will result in a dental contract in England that has prevention and public health at its heart and that builds in an element of sustainability for dental practices. I hope we will adequately fund more dentists. There is a massive shortage of NHS dentists, and Health Education England has cut funding to train dentists by 10%. Dentists have raised concerns with me about that this week. In particular, 17% of our NHS dentists come from the EU, and agencies that supply them to our NHS are already reporting a 90% fall in EU-citizen dentists willing to sign up to support our NHS.
As has been said, we desperately need a public health education programme. It was heart-warming to hear about the work done in Scotland through the Childsmile programme. I would like to see us go further in England, and I hope the Minister will assure us on that. It could be done in an affordable fashion by reinvesting the savings and ensuring that every health professional—everyone who comes into contact with a child from their earliest days, such as the midwife—plays a part in making sure that parents fully understand the oral needs of their children. We must ensure that every nursery schoolteacher is reinforcing that message. And, yes, in the same way as has happened in Scotland, and in some cases in Wales, toothbrushes and toothpaste, as well as fluoride washing, should be provided in the more deprived areas. We have heard about the positive impacts that fluoridisation can have, but that in itself is not an answer.
The wider benefits are hard to measure, but the impact on the NHS and on child wellbeing is crucial. As the chair of the British Dental Association said:
“These shocking statistics are rooted in an abject failure by government to tackle a preventable disease.”
I look to the Minister to assure us on those points and to tell us that we will go beyond pilots. As many Members have said, the evidence is there. This is an urgent situation. For the sake of our children, our NHS and the wellbeing of future generations, we need to tackle this as a matter of urgency.
Before I call the Minister, I remind him that the convention is to let Mr McCabe wind up at the end.
I thank everyone who has spoken and the hon. Member for Birmingham, Selly Oak (Steve McCabe) for securing the debate via the Backbench Business Committee. He has proved once again that he is on his mettle. There are a number of things I want to get on the record and there are lots of things I want to respond to. We know that, as many Members have set out, poor oral health for children can lead to pain, poor sleep, days missed at school—the hon. Gentleman said that three days are missed on average, but the figures can be much higher—and impaired nutrition and growth. It is a serious business and we take it seriously.
The shadow Minister spoke passionately about the subject and the risk to our economy. I am glad that she recognises that there are no quick fixes. If there were, I suspect many of my predecessors would have quick-fixed.
It is a fact that the two main dental diseases of decay and gum disease—dental caries and periodontal disease—can be almost eliminated by a combination of good diet and correct tooth brushing, backed up by regular examinations by a dentist. They are preventable. It is worth putting it on the record—it is not all doom and gloom—that children’s oral health is in fact better than it has been for years. The most recent data from 2015 show that 75% of five-year-old children in England are now decay-free. That is good, but it clearly leaves 25% who are not. Between 2008 and 2012, the numbers of five-year-old children who showed signs of decay fell by approximately 10%. Improving children’s oral health and that of the adult population is a priority for the Government. Indeed, our manifesto earlier this year set out our commitment to improve coverage and achieve better outcomes, especially for children in deprived areas.
Will the Minister give way?
I will once, but with the time I have got I am going to have to press on.
Does the Minister recognise that total dental clearances in children, of which there are approximately 25,000, have seen an 11% increase in the past five years, so it is not possible to claim that dental health in England is getting better?
I said that there is clearly a long way to go, and the hon. Lady also said that about Scotland. I am just putting it on the record that there are some positive stats; it is not a counsel of despair.
In explaining what I started to say, let me talk about the extensive work being led by Public Health England as well the wide range of activity nationally in reforming the dental contract, which a number of Members asked about, and locally, in initiatives such as “starting well” run by NHS England, which a number of people referred to. First, it is important that I, as the Minister, acknowledge the vital role that dentists play in this. They are a brilliant part of the NHS. There are just over 24,000 dentists currently providing NHS dental care and their commitment and contribution is vital to delivering our wider health and public health aims. Overall, access to NHS dentists continues to increase in England. In the latest figures for patients seen by NHS dentists, 6.8 million children were seen in the 12-month period ending 30 June this year, which equates to just over 58% of the child population. Looking at adults, this year’s January-to-March GP patient survey results showed that, of those adults trying to get an NHS dental appointment, 95% were successful.
Although those numbers are an encouraging start, clearly more needs to be done—I am not pretending that it does not—to reduce the inequalities in access and oral health that remain as a result. Nationally, Public Health England has an extensive work programme to improve oral health, particularly of children. Improving that and reducing inequalities in oral health is a priority for PHE, which I meet regularly. It was in the office just last week, when we discussed this subject. So many Members have mentioned the sugar levy, which addresses some of the root causes of dental disease.
Will the Minister give way?
Yes—because she is smiling nicely.
May I make a brief intervention on the sugar levy? Will the Minister at least undertake to look at health trusts—that is directly in the gift of the Department of Health—and at what they are promoting by means of cabinets that sell sugary drinks and products?
Yes, and I will write to the hon. Lady about that. That is a good point well made.
The sugar levy addresses some of the root causes of dental disease, and other action has included ensuring that the “red book” that all parents receive after the birth of a child has clear messages about the importance of good oral hygiene and early dental attendance—that point was made by my hon. Friend the Member for South West Bedfordshire (Andrew Selous). All new parents will therefore receive clear messages about the importance of oral hygiene and early dental attendance, and I will follow up his point about recording that first appointment in the book. That should be happening; I will follow that up. I thank him for raising it. Public Health England is working alongside local authorities in all our constituencies that are responsible for commissioning oral health improvement programmes.
The hon. Member for Birmingham, Selly Oak, the hon. Member for Central Ayrshire (Dr Whitford), and the hon. Member for Burnley (Julie Cooper) mentioned contract reform. Our manifesto sets out the Government’s continued commitment to introducing a new NHS dental contract that will improve the oral health of the population and increase access to NHS dentistry. That change will provide the foundation on which we will support other improvement activities.
A new way of delivering care and paying dentists is currently being trialled in 75 high-street dental practices. At the heart of that new approach is a prevention-focused pathway that includes offering all patients an oral health assessment and advice on diet and good oral hygiene, with follow-up appointments where necessary to support patients’ self-care and carry out further preventive treatments. That new approach aims to increase patient access by paying dentists for the number of patients cared for, and not just for treatment delivered, as per the current NHS dental contract—a number of Members raised that point. An evaluation of the prototype agreement scheme is due by the end of this year, and it will set out detailed findings from the first full year of testing that new system.
However, we feel that a single year is too short a period in which to make final decisions about whether the new system, when combined with the revised clinical approach, is viable for wider adoption as a new NHS contract. We have therefore decided to extend the prototype agreement scheme to allow it to run for a further two years, to allow for further testing. The prototypes will continue to be subject to evaluation to determine whether they can maintain access and improve oral health, including that of children, in a way that is sustainable for practices, patients and commissioners, before any decisions are taken on wider national adoption.
The important Starting Well initiative was recently launched for children under five, and as a number of Members have mentioned, the programme will work in 13 high-priority areas, with the aim of supporting dentists to see extra children under the age of five who do not currently visit a dentist. It will provide a model that ensures that when they are seen, the focus is on reducing their risk of future disease, as well as treating existing problems. The aim of Starting Well is to reduce the unacceptable oral health inequalities that exist for those children. The hon. Member for Birmingham, Selly Oak asked how long it would run, how areas will be selected and how it will be funded. It will run for as long as is needed locally—that is a decision for local commissioners. I will give him a bit of detail about how the areas will be selected. Selection of the 13 areas was based on 2015 oral health survey results that identified the number of decayed, missing or filled teeth—DMFT, as it is known in the trade—in those under five. To select the areas for Starting Well, a cut-off of 1.6 DMFT was the established marker, and that identified 13 upper-tier local authorities that would benefit from the Starting Well approach. Areas that scored below 1.6 DMFT were not selected, as it was agreed that those resources should be directed to areas where oral health had either declined or remained static. NHS England is funding the programme locally in those areas through underspends and, where the NHS chooses, the prioritisation of funds. I hope that that answers the hon. Gentleman’s questions on Starting Well.
Alongside that, NHS England, together with the chief dental officer—she has been mentioned a number of times; I have worked closely with her and she is excellent—is looking at ways to make the principles of that approach more widely available to all commissioners, and I want to talk to her about that in more detail. The aim is to ensure that commissioners have a clear framework within which to work when considering ways to increase access to dental services for very young children.
The hon. Gentleman was disappointed that Birmingham was not selected for the Starting Well programme, and I set out some of the reasons why we selected the areas that we did. I am, however, happy to say that NHS England is taking forward its own oral health initiative to raise awareness of the importance of early dental attendance, and that will be linked with wider NHS England national work, which I know is particularly championed by the chief dental officer, to encourage greater attendance.
I wanted to touch on so many other points. My hon. Friend the Member for Erewash (Maggie Throup) gave us the charming image of a bath tub full of sugary drinks. What an image—horrendous! That is why our sugary drinks levy is so important. We know that sugar is the leading cause of tooth decay, and the sugary drinks industry levy and the sugar reduction programme will reduce the amount of sugar consumed by children. We keep the childhood obesity plan under constant review. That is important to me, and something I am responsible for.
I did not know that this was sugar awareness week until that was mentioned by the hon. Member for Birmingham, Selly Oak—indeed, the irony of that, with tonight being Halloween, and the children with buckets of sweets, is not lost on me. My children will be attending an altogether different event this evening that does not involve buckets of sweets. It is a “let in the light and shut out the darkness” event—that is something that my wife likes to champion, so she will be pleased with the mention.
The hon. Gentleman also mentioned school dental clubs, as did the chair of the all-party group for dentistry and oral health, my hon. Friend the Member for Mole Valley (Sir Paul Beresford). Outreach, including to schools, is important for reaching children who do not normally attend a dentist, as part of Starting Well and other initiatives being taken forward to reach children in schools. Sure Start centres will also be commissioned locally to be part of the Starting Well programme.
My hon. Friend said that kids love brushing their teeth, but that is not entirely my experience at home. The hon. Member for Strangford (Jim Shannon) mentioned singing toothbrushes. I am not aware of them, although I am aware of singing while brushing. My children are encouraged to hum “Happy Birthday” twice while brushing, so that they brush for longer, and they love me for it. I responded to the hon. Member for Bradford South (Judith Cummins) in an Adjournment debate on this subject. She has been to see me, and I understand that she is meeting the NHS in her area on 9 November. I urge the NHS to share the findings of the pilot with her, and if it does not, she should let me know. My hon. Friend the Member for South West Bedfordshire made a point about the first dental check being placed on the record, and I take his point and will follow it up. On schools being sugar free zones and the advertising ban before 9 pm, I said that we would keep the childhood obesity strategy and the measures within it under constant review. My hon. Friend should continue to work with me on that; it is important that Members vocalise their support to go further on that strategy.
In closing, we have had a good debate. I hope that in setting out some of the work done by Public Health England, the Department of Health and NHS England, I can reassure Members about our commitment to improving children’s oral health for the future. There is an awful lot of good news, but an awful long way to go. I am happy to learn from anywhere in the United Kingdom where such work is going well, and conversations with the hon. Member for Central Ayrshire (Dr Whitford) are always illuminating and useful.
I thank the Minister and all Members who have taken part in a thoughtful and well-informed debate. I think that £130 million a year clawed back by the Treasury in unused units of dental activity could be put to much better use, and I wish the Minister well in his battle with the Treasury on that.
I was pleased to hear what he said about the dental contract, although I think that two years is a bit long when so much more coverage is required. Obviously, I would like education programmes to be rolled out as quickly as possible across the country, because that is key to what we are trying to achieve. I personally think that we need an even bigger push on sugar, and particularly sugar promotion, as that will make a massive difference to all children.
Question put and agreed to.
That this House has considered children’s oral health.
Scotch Whisky Industry
I beg to move,
That this House has considered the future of the Scotch whisky industry.
It is a pleasure, as ever, to serve under your chairmanship, Mr Bone. I am delighted that the Exchequer Secretary is almost in his place. I also acknowledge the presence of, and support from, hon. Members from other parties. I shall take some interventions if time permits but, if colleagues will permit, I shall ration myself, in view of the constraints of time.
The Scotch whisky industry, like just about every other one, has a sense of uncertainty about its future at the moment. Given the wider political context, that is hardly surprising; but there is much positive to be said about the industry, especially for the medium to long term, if we get the big decisions right now. For Scotland, and especially rural Scotland, the industry is enormously important. It is also an important part of the UK economy as a whole. It is a massive exporter and earns in the region of £4 billion a year for us—20% of our food and drink exports are from that one industry. The export performance is crucial, as it underpins a market providing about 40,000 jobs, including about 10,000 directly in the industry. Of those, 7,000 are in the rural economy. Beyond that direct employment there is the supply chain and, of course, the burgeoning question of whisky tourism.
On the supply chain, it is important to emphasise that the jobs are not just in Scotland. A company called Erben in Hadleigh in my constituency provides much of the bottling technology, and bottle caps, to some of the biggest brands in the whisky industry.
Indeed. The Scotch Whisky Association and the Wine and Spirit Trade Association would make that point: there is an industry and supply chain across the country. That includes the fact that the grain comes from farms throughout the country. The impact of the industry is particularly acute, however, in rural Scotland. The growth of whisky tourism, in particular, has been phenomenal in recent years, and has been transformative for the most economically fragile communities in Scotland.
There is an impact on the urban economy, as well as on the rural economy. Dewar’s whisky is produced on London Road in Glasgow. I do not know whether the right hon. Gentleman has had the pleasure of drinking it; I am more than happy to share it. His point about the wider supply chain is important. Having visited the bottling plant, I know the impact on Carntyne Transport, which provides many jobs in my constituency.
Order. It is always good to have props—but it is wholly unallowed.
I anticipated that that might be your reaction, Mr Bone. I thank the hon. Member for Glasgow East (David Linden) for his intervention—he made a good point—and for his offer, but even by my standards it is a little early at the moment.
As I have said, many of the most economically fragile communities are sustained by the whisky industry and many are flourishing as a consequence of its recent growth. In recent weeks there has been welcome news from Diageo that it will reopen Port Ellen and Brora. That is part of a continuing pattern that has emerged over years. The Highland Park distillery in my constituency has been going from strength to strength for years. It also has a smaller cousin in Scapa, which has emerged not from mothballs—it does not like that term, for obvious reasons—but from a quiet period and grown such that production is now in the region of 1.1 million litres a year. There were three full-time jobs in production, and that number has now gone up to five. It has also expanded into a visitor centre and shop. That all brings money and employment into the community and allows it to stay there. That is a fairly modest but significant increase, and its replication in communities across the highlands and islands highlights the social importance of its economic impact.
Seven new distilleries opened in Scotland last year alone, and many others are still in production. In anticipation of today’s debate I had a brief conversation yesterday with Stewart Laing, of Hunter Laing, one of the people behind the construction, from the foundations up, of a new distillery on Islay, at Ardnahoe. He described it to me as a lifetime commitment, and the Treasury should understand that: those who are part of the industry are not in it just for a quick buck in the here and now. Long-term planning and stability are of exceptional importance. Another Islay distillery that provides a great example for others to follow is that at Kilchoman. It was set up 10 years ago by the Wills family and now employs 25 to 30 full-time employees. It has a turnover of £4.6 million and it is still a family business. Of course Diageo, Pernod Ricard, Chivas and so on—the big players in the industry—are very important, but a pattern is emerging of a much more diverse range of business models. For them in particular, the medium to long-term future of the industry and its stability are of absolute importance.
As the Minister may have anticipated, I want to concentrate for a few minutes on the shorter term. We all know the rules on Budgets, and we know that one is coming up on 22 November, so I have realistic expectations about what the Minister will say now, but I want to test him on a few of the issues arising from the March Budget. That, of course, affects spirits producers in general, not just Scotch whisky producers. For the second part of today’s parliamentary happy hour, the Minister will doubtless return to this Chamber for the afternoon debate on beer and pub taxation.
The spring Budget delivered, somewhat out of the blue, an increase of 3.9% in the level of spirits duty. It is anticipated that the escalator will now produce a 3.4% increase at the end of this month, with a further 3% per annum thereafter. It is something of a supertax, which I suggest is ill conceived and misguided. It requires urgent consideration; otherwise the pattern that I have described of a growing, diverse whisky industry will be under threat.
Moray has 47 of Scotland’s 119 Scotch whisky distilleries, so I could not do as the hon. Member for Glasgow East (David Linden) did during his intervention. I could not possibly afford a bottle from each one.
On taxation, does the right hon. Gentleman agree that the Treasury should consider the benefits of reducing taxation? The Scotch Whisky Association, with the independent back-up of KPMG, has shown that reducing the duty on Scotch whisky would increase revenues to the Treasury.
The hon. Gentleman tees up my next point for me beautifully. I promise that is the last time there will be a reference to “tee” this morning. The work in question was done for the Scotch Whisky Association by KPMG, an organisation that is not just going to tell clients what they want to hear. The work is underpinned and supported by the Treasury’s own figures. The increase in March damaged confidence and led to a sharp decrease in sales—1 million fewer bottles were sold in the first two quarters of this year, compared with last year. That can be tested against the experience of 2015.
I was a Cabinet Minister in 2015 and was proud of the fact that that Government delivered a 2% cut in the level of whisky duty. I cannot remember exactly, but I recall that the expectation in the Government at the time was that a 2% cut would cost in the region of £600 million. That was what we thought we would lose in revenue. In fact, however, a significant increase in revenue was delivered as a result of lower taxation.
The right hon. Gentleman is a massive defender of the whisky industry and I am sure he likes a tipple himself. Will he comment on the way in which the Treasury is set up? Perhaps the problem is that the Red Book would have to determine a minus figure when the reality might be positive. The Treasury should look more imaginatively at how it taxes not only Scotch whisky but spirits in general.
I am keen to encourage creativity within the Treasury. I must say that that message is not always well received in that particular Department and change is often slow in coming, but I encourage the Minister to pursue that agenda, because—to return to the experience of 2015—having anticipated a £600 million decrease, there was an increase of £124 million in revenue to the Exchequer. Although I obviously have some concerns about the Chancellor, I do not believe that he put the rate of duty up in March believing that he would take in less money. The underlying problem is that the elasticities that underpin the modelling used by the Treasury are clearly out of date. They have not been updated since 2013 and they have been wrong at least twice. They were wrong in a good way in 2015, when the cut in duty delivered an increase in revenues, but they were also wrong in March, when the increase in duties delivered lower revenues.
My essential message to the Minister is that to embark on a progressive increase of the sort planned, with a year-on-year 3% increase on the basis of Treasury modelling that is at best flawed and in need of updating, is ill conceived and risks the emerging growth not just in whisky but in other spirits. It is difficult to go on any social media platform these days without seeing an advert for yet another craft gin. Gin is another emerging spirit and important part of our export portfolio. From the outside, as the industry sees it, it looks as if one of our most successful industries is being punished by the Treasury at a time when, frankly, we are going to need the contribution it makes to our economy.
I say to the Minister that it is now time to be bold. The Chancellor could use 22 November as an opportunity to cut duty, as was done in 2015. If he is not prepared to do so, there is a good business case for at least a freeze or for walking away from the escalator effect. If he continues with the escalator, he must come up with some justification for it, because all the indications go in the opposite direction.
Turning briefly to the question of the medium to long term, there is an opportunity to recalibrate the way in which the Treasury engages with the industry. During my time in Parliament, the successful PILOT partnership scheme between Government and the oil and gas industry has allowed the Government to better understand what is happening in the industry and allowed industry to engage, see the direction of travel and plan accordingly. The Scotch Whisky Association now talks about a sectoral deal, perhaps for the whisky industry but more likely for spirits or alcohol manufacturers as a whole. I encourage the Minister to take that suggestion seriously. We have seen tremendous success as a result of the city and regional deals, a model that has worked well. Taking that to a sector such as spirits production or the whisky industry would be a new iteration of the model. Given the opportunities that exist, the model is well worth considering. Those are the medium to long-term opportunities. In the medium to long term, the Government can do good to help the industry and, most importantly, the communities that depend on it. In the short term, on 22 November, the very least they can do is stop doing damage.
It is always a pleasure to serve under your chairmanship, Mr Bone. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this debate. I understand his passion for the subject, given his constituency’s long-standing tradition of producing fine whiskies. He mentioned the Highland Park and Scarpa distilleries; I have been fortunate enough to visit his constituency and those places on my holidays and I entirely agree with his basic point. I also agree with his underlying point that producing whisky is a lifetime commitment. People cannot enter into it for the short term. It takes a long time to produce the product, particularly in the premium sector. It is a proper, significant long-term commitment. We are seeing huge innovation and people entering the marketplace—both signs of a good, strong sector.
I will try to answer as many of the issues raised as I can, but in particular I must comment on the duty rates—a key element of the right hon. Gentleman’s speech. However, as one might expect, I am unable in discussing that to pre-empt what my right hon. Friend the Chancellor may or may not do in the forthcoming Budget. That is only three weeks tomorrow, so there is not long to wait. Before I discuss the duties, I reassure the House that the Government recognise the important contribution that the Scotch whisky industry makes to both the UK economy and local communities.
I met with the Scotch Whisky Association and with large and small distillers in the run-up to and preparation of the Budget. The Scotch Whisky Association estimates that the industry adds over £5 billion to the UK economy and supports over 40,000 jobs, 7,000 of which are in the rural economy. Its footprint extends beyond those fortunate enough to have a distillery in their immediate constituency. As my hon. Friend the Member for South Suffolk (James Cartlidge) says, the industry creates jobs throughout the UK, whether in the agricultural sector in East Anglia or, in this case, the bottling technology, but primarily it is a great Scottish industry. Distilleries are also increasingly significant tourist attractions in their own right. Some 1.6 million tourists visited distilleries in 2015, an increase of more than 20% in visitor numbers since 2010.
The Government also recognise that Scotch whisky is a UK export success story. Exports account for about 93% of total production. More Scotch whisky is sold in France in one month than cognac in an entire year—an enjoyable stat to consider. In 2015, we exported 1.2 billion bottles of whisky worldwide. The industry estimates that whisky exports were worth nearly £4 billion last year. That is over £7,500 of Scotch whisky sold every minute, accounting for around a quarter of all UK food and drink exports. It is a fantastic success story for the UK to be proud of.
The reach is equally impressive. In 2016, whisky was exported to 184 countries—that means that over 90% of countries have a taste for whisky. South-east Asia in particular has grown as an export market, with Singapore alone importing £224 million of Scotch whisky last year.
We are seeing an increasing premiumisation of some exports, which reflects a broader food and drink trend within the UK, and Scotch whisky is poised to take advantage of the appetite for premium British products in this area.
I agree with everything the Minister is saying, but two things are worth consideration. First, although we are seeing that growth in premiumisation, it is on the basis of a shrinking market share globally in a very competitive market. Secondly, when opening up new market opportunities, Governments in other countries look here to how we treat our own industry. That is why the domestic market and taxation of it cannot be divorced completely from the export market.
The right hon. Gentleman makes points that I broadly agree with. The signal that the UK supports the industry and recognises its impact on our economy and our exports particularly is entirely understood. In recognition of the quality of the product, Scotch whisky was one of the first food and drink products to feature in the Government’s GREAT campaign, which gave it high international visibility in key markets. I assure Members that we will continue to support the Scotch whisky industry, so that it continues to thrive and prosper.
I welcome all the export trends the Minister has outlined, but we have the fourth highest excise duty rate in the EU. Other EU countries support their home industries and we need to follow suit—even more so, now. Does he agree?
That tempts me towards Budget comments, which I cannot make at this moment. I need to rewind a little bit from that question and make a quick point before coming on to duty rates.
The protected food name scheme remains in place while we are still a member of the EU. The European Union (Withdrawal) Bill, which is currently passing through this place, will ensure that all EU law passes into UK law when we leave the EU. That will include the legal definition of whisky, which is a significant point for the protection of the sector in the long term.
I am grateful to the Minister for giving way; I know he has limited time. I wonder whether the Treasury and the Department for International Trade would talk to the industry in Scotland, which is such a successful exporter. In the post-Brexit world, the Government could learn a lot from the industry and how it has been able to export so successfully. That could happen to other sectors when we leave the EU.
The hon. Gentleman makes an important point. I have to say, though, that I have been talking to the industry and will continue to do so. One thing I have learned in the preparation of Budgets is that a significant number of representations are made either for Government spending or relating to duty. My door is open. I want to hear from the industry and ensure it understands that it can access the Treasury, which will be entirely supportive of British companies developing, investing and exporting. I particularly include the Scotch whisky industry. I have been trying to get across my support for it, and my door will be open for future meetings.
Let us get to the issue of duty rates. The actions taken by this Government are estimated to have reduced all alcohol duty receipts by around £2 billion since 2013. That is a significant duty cut. The actions taken to freeze or cut spirits duty at Budgets in 2014, 2015 and 2016 mean that the tax on a bottle of Scotch is now 90p lower than it would otherwise have been. I understand the point made by the right hon. Member for Orkney and Shetland about price elasticity within the marketplace. The £4 billion of exports per year are unaffected by duty changes as no duty is paid on exported spirits. No UK duty is paid therefore on around 93% of all Scotch whisky produced.
As we approach the Budget, the Government face some pretty tough choices. As I said, I cannot pre-empt what my right hon. Friend the Chancellor of the Exchequer may announce. However, it is the Government’s policy for our public finances to assume that alcohol duties will rise by retail prices index inflation each year.
We had a success in reducing corporation tax, which increased the tax take, and we are minded to further reduce corporation tax to achieve the same goal. Does the Minister think that that would also apply to a reduction in the duty on spirits? Would that generate an increased tax take, as per the corporation tax?
That is a very interesting question, and it slightly tempts me into a Budget thought, which I am sure was entirely my hon. Friend’s intention. While not commenting on the Budget, I assure him that I am instinctively a low-tax Conservative. That is my principle when dealing with the industry, and I think that can be said of my predecessors in the Treasury, otherwise we would not have had the £2 billion reduction in duty rates over the past few years.
I know the Minister does not want to be dragged into questions about future Budgets, but does he accept the scenarios that have been painted since previous Budgets? As the right hon. Member for Orkney and Shetland (Mr Carmichael) said, a 2% reduction increased revenue by £124 million, yet the increase of 3.9% on spirits in March this year reduced the revenues going to the Treasury in the first quarter by 7%. That is looking not at the future but at the impact these decisions have had in the past.
That is an important question, and it has certainly been considered within the Treasury. There is a general view that if we cut duties, we can increase growth and therefore revenue, as the evidence suggested in 2015. However, sales of some drinks have increased after duty cuts, and sales of some drinks have increased after duty increases. It is very hard to evidence that the sales growth my hon. Friend talks about is directly caused by that duty cut.
The principle of supporting a sector in a competitive way through a fiscal and regulatory regime, with support for infrastructure and skills, is exactly what the Government are about: creating the most benign environment in which to do business. I reinforce to the House that our public finances are under some significant pressures. The Government estimates of costs to the Exchequer are scrutinised by the Office for Budget Responsibility before they are certified, so they have independent scrutiny.
I would like to emphasise in the last moments that we will carefully consider all Members’ representations this morning as part of the representations for the forthcoming Budget. I want nobody to leave the debate without a clear understanding that this Government support the Scotch whisky industry. We recognise its importance and are utterly committed to ensuring that this great British success story maintains its global pre-eminence and global growth. The passion for the sector is clearly shared by colleagues here today. When we look at recent trends within the industry and the new entrants into the marketplace, new products becoming available, innovation and export growth, I think we can all say that the future for the Scotch whisky industry is bright.
Question put and agreed to.
Taxation: Beer and Pubs
[Albert Owen in the Chair]
I beg to move,
That this House has considered taxation of the beer and pubs sector.
It is a pleasure to serve under your chairmanship, Mr Owen, for what I think is the first time and particularly for this important debate on taxation of the beer and pubs sector. It takes place just three weeks before crucial decisions are made in next month’s Budget. It was pointed out to me this morning that seven years ago an Adjournment debate on this subject was initiated by my constituency neighbour, my right hon. Friend the Member for South Staffordshire (Gavin Williamson). I only hope that my hon. Friend the Exchequer Secretary to the Treasury is as keen to please the Government Chief Whip as I clearly am in repeating his initiative today.
This debate is taking place on Halloween, and pubs up and down the country are decorated with a wide range of ghouls, monsters, skeletons and witches. However, the scariest prospect for our pubs and brewers is surely that they could face a second duty rise this year after next month’s Budget and enormous rises in business rate bills over this revaluation period. I hope to set out, in the short time available to me, why the Minister should avoid that course of action.
In the UK, 30 million adults drink beer each year and 15 million of us visit the pub each week. Representing the Black country, the spiritual home of British brewing, and as chairman of the all-party parliamentary beer group, the largest Back-Bench group in the House, I know how important this issue is for so many of our constituents.
If the midlands is the engine of the British economy, beer is surely the fuel that helps to power that engine, and like all fuel, it needs to be well looked after. My Dudley South constituency is home to four brewers—Bathams, Black Country Ales, Ma Pardoes and the Pig Iron brewery—and no fewer than 75 pubs. The beer and pub sector is vital to our country. Nearly 1 million people across the UK rely on the industry for work. About 46% of them are young people under the age of 25, and just over half are women.
Does my hon. Friend agree that having a healthy pub environment will do two things, namely promote healthy drinking and help to revitalise our high streets?
Absolutely, and I will come on to the specific role of pubs later. Supporting the pub trade has a more direct economic role in helping further to reduce youth unemployment and the number of young people not in education, employment or training.
I thank the hon. Gentleman for securing this important debate. May I place on the record my praise for the many microbreweries that have opened in Ashfield? They have totally transformed the high streets in my constituency. Does he agree that the tax break introduced for smaller breweries by the last Labour Government should remain intact to ensure that they continue to prosper?
Partly because of the small breweries’ relief scheme, we now have a greater variety and, I would argue, greater quality of beer than we have had in the past. It is important that smaller brewers enjoy support that reflects the higher marginal cost of brewing on that scale. However, we also need to look at whether the relief scheme as currently framed is preventing brewers from expanding, or even causing some to scale down.
I will give way just one last time and then I must make some progress.
In the last Parliament, there was a Bill on this subject; I think that a Liberal Democrat introduced it. Certainly the landlords of Coventry’s pubs are voicing a lot of concern about this matter. There is a big effect on pubs—many are now closing—but also a big effect on high streets. Coventry has universities, and sometimes the students have jobs in the pubs, so they subsidise their—
Order. I call Mike Wood.
The hon. Member for Coventry South (Mr Cunningham) of course makes an important and valid point in talking about the role not only of students but of young people more widely in employment, because the pub sector can generate an extremely fulfilling and constructive career for many that goes much wider than the stereotypical picture of students working in a pub until they are in full-time work.
Will the hon. Gentleman give way?
I must continue because a lot of colleagues are waiting to get in.
The beer industry is a true success story for home-grown British manufacturing. A staggering 82% of all beer consumed in this country is made in the UK. The UK now has more than 2,000 breweries, producing 25 million barrels of beer a year. With 923 million pints exported to 110 different countries, beer is the third largest food and drink export sector in the UK and it is worth £550 million to the UK economy. In my constituency alone, the sector accounts for 1,156 jobs, of which 313 are held by under-25s. It also contributes more than £37 million to our local economy.
I congratulate my hon. Friend on securing the debate. Shepherd Neame, the pub and brewing company, is the largest employer in my constituency, so let me support the case he is making. Given the importance of these companies as employers, and the role of pubs in our villages, we must have a tax regime that supports this part of the economy.
I thank my hon. Friend, who represents our oldest brewery. It is important that we support established breweries as well as more recent entries into the market. The beer and pub sector adds more than £23 billion to the UK economy, and I know that the Minister will be very grateful for the £13 billion of taxes that it contributes to the Treasury.
There has been a suggestion that duty changes have little or no impact on beer sales in pubs. That is simply not true and is not consistent with the available evidence. The last Labour Government introduced the hated beer duty escalator in 2008. It was hated because the escalator saw beer duty increase by a staggering 42%, hitting beer sales, making pints less affordable and closing pubs at a faster rate than ever. Beer sales have been falling for many years. However, we saw that trend accelerate sharply under the escalator. In the six years before the duty escalator, on-trade beer sales fell by about 3% a year. During the escalator years, on-trade sales fell by more than a quarter, which was about 5.4% a year on average. Almost 7,000 pubs called time for good, and more than 58,000 beer-dependent jobs were lost. However, although beer duty increased by 42%, beer duty revenues rose by only 12%. It was a very expensive failure of a policy and one that I hope the Labour party has put firmly in the past.
Beer duty is now 20% lower than it would have been with tax rises previously planned under the escalator. In the years between 2013 and 2016, when duty was cut or frozen, the annual decline in on-trade beer sales was not 5.4%, but 2%, which year on year makes a significant difference to the number of jobs and the size of the industry. However, the return to a retail prices index-linked rise in this March’s Budget was disappointing. Announcing a second duty rise in the same calendar year would in effect take us back to the days of the beer duty escalator through the back door.
As the price difference between sales in pubs and supermarkets has widened, consumers have become increasingly price sensitive, especially pub-goers. A respected consultancy, Oxford Economics, which has consistently and accurately forecast the impact of duty changes in recent years, calculates that even a freeze in beer duty in next month’s Budget, rather than the planned increase, would boost pub sales by about 33 million pints per year against the current baseline and that that would mean more than 2,000 additional jobs.
The Exchequer Secretary will remember the front-page headlines praising the previous Chancellor for cutting beer duty. I cannot promise the Exchequer Secretary the front page of the Evening Standard—maybe he knows a man who can—but I have no doubt that if the current Chancellor freezes beer duty, the whole Treasury team would be carried shoulder high across Whitehall.
The financial benefits of the beer and brewing industry are clear, but just as great is the social impact of pubs and the detrimental effect that pub closures have on the fabric of our society, because pubs are a great addition to the social make-up of our country, at the heart of our local communities. They offer a safe environment in which drinking can be supervised and highly regulated, which is in stark contrast to much street drinking.
Does my hon. Friend agree that at a time when we are becoming more digitised and people are spending more time alone, the social interaction that pubs create is really important, particularly when loneliness is a major problem, not just for older people, but for younger people as well?
My hon. Friend goes right to the heart of this issue. Friends are made and communities come together in pubs. Research at Oxford University by Professor Robin Dunbar concluded that pubs play exactly that kind of vital role in tackling social isolation and contributing to wellbeing. People with a local are likely to be better off financially, physically and socially. They are likely to have a wider circle of friends. In a week when researchers have shown again the clear link between strength of social networks and resilience to conditions such as dementia, the social value to which my hon. Friend refers could not be more important.
People who drink in moderation in a pub are more likely to be healthier and register higher levels of happiness than people who do not drink at all. They are also likely to be better fed, with almost 1 billion pub meals sold annually.
We should not forget that pubs play a key role in tourism, being one of the attractions that tourists most want to visit when they are in the UK. Last year there were 600 million day visits to pubs by tourists, and more than half of all holiday visits to Britain included at least one visit to a pub.
Does my hon. Friend agree that it is a terrible shame that we lost some 10,000 pubs between 2003 and 2013, ripping the hearts out of many of our villages and communities? Does he also agree that pubs represent part of our British way of life that other people come here to see?
Absolutely. That is as true in our towns as it is in our villages. About 80% of pubs are community or rural pubs. They bring not just jobs, but a community focus, often in areas of the country where other traditional providers of jobs and community coming-togetherness might have been lost.
The hon. Gentleman makes a profound point about the importance of pubs to rural villages, but does he agree that pubs in inner-city areas are just as important to the local community? There has been a migration of licences from inner-city areas into city centres, which has denuded our inner cities of many of the benefits of public houses.
The hon. Gentleman is absolutely right. It is particularly troubling that those pubs that close in our towns and city centres are often housed in large buildings that are very difficult to fill and that remain as decaying monuments to the changing nature of consumer behaviour.
Pubs and breweries in Barnsley East contribute more than £12 million to the local economy, but on the particular issue of pub closures, does the hon. Gentleman agree that we need to consider updating the compulsory purchase powers and the planning system, which would give more powers to local communities?
I think that is exactly what the Government have done over the past 12 months in changing the rules on permitted development in particular. Obviously, now we have to go through planning processes before pubs can be converted.
The licensees and customers at many of our pubs contribute in both a financial and practical manner to their communities, by funding and running sporting and other activities, such as football, darts, dominoes and cribbage, but also through community activities, a large number of which are run through our pubs. Of course, because pub customers are extremely generous people, initiatives such as PubAid are able to generate about £100 million each and every year for good causes in communities in all of our constituencies.
For all these pubs to flourish and remain at the beating heart of their communities, they need a transfusion of investment and custom that will come with a freeze in beer duty and a reduction in their business rate burden. I have set out why our beer and pub industry is so important economically and socially, but it faces the twin threats that I referred to earlier: the increases in business rates and in beer duty. The three duty cuts, last year’s freeze and the ending of the escalator secured about 20,000 jobs, boosted confidence in our brewing and pub businesses and meant that more beer was sold than would otherwise have been the case, boosting the Treasury’s total tax take, if we include both direct and indirect taxation. On business rates, the Chancellor has already recognised the pain caused to pubs by the disproportionate burden caused by valuation based on turnover; about half of that turnover may be beer duty and VAT that the pub is collecting on behalf of the Government.
The £1,000 pub relief announced in the March Budget is extremely welcome, particularly for smaller and medium-sized pubs. However, it is particularly important that that relief is now expanded and extended, because our pub sector pays nearly 3% of all business rates despite making up just under 0.5% of business turnover. It is hugely, disproportionately overtaxed through business rates.
Does the hon. Gentleman agree that it is ludicrous that pubs in Stoke-on-Trent pay more in business rates—in fact, more in total—to the Exchequer than Amazon does in its entirety? Stoke is paying more than Amazon.
I could not agree more. The revaluation of business rates was often seen as an issue that affected only businesses in London or the south-east. As for everyone else, it was thought that some gained and some lost out, but that is completely untrue when it comes to pubs, which have experienced huge increases in every part of the country. The 27 pubs run by Black Country Ales across the west midlands and neighbouring counties will have experienced an increase in their rateable value of, on average, 40% by the time the transitional period is over.
My hon. Friend makes a very good point. A pub in my constituency has seen its rates go up 83%. Does he agree that it is completely inappropriate for pubs to be measured by turnover? They get measured on their actual turnover, not the perceived turnover for the square footage, so there is no fair comparison with the way in which rates are levied and measured in other industries in our country.
That is right. As well as a large part of that turnover being just business tax, it is a huge disincentive to invest in and improve the property.
We supported the Chancellor when he suggested he would look at business rates in the light of the increase in online businesses and the harm that could cause our beloved high streets. The message that has come from Members on both sides of the House is that the sooner that can be done, the better. We want to ensure that our community pubs, high street pubs and village pubs are properly considered when any new system is put together, so that we can all get together to protect the great British pub.
I applaud the Government’s work in reducing the deficit, and the measures that the Exchequer Secretary and his colleagues are taking to reinvigorate the economy, but I ask him to urge the Chancellor to go further. Hard-pressed UK beer drinkers still pay 40% of all Europe’s beer duty, despite drinking only 12% of the beer consumed in Europe. Some colleagues may think that means we need to drink more beer to keep up, but let us just focus on the duty. As a Yorkshire MP, the Exchequer Secretary will know that the Black Sheep brewery employs more than 100 people in the Yorkshire dales, but he might not know that it pays more in beer duty each year than it does on the combined costs of employing those 100 staff, buying all the raw materials to produce its beer and then distributing it around the country. Beer duty that is more than four and a half times as high as eBay’s UK corporation tax liability seems an undue burden.
Does the hon. Gentleman agree that it is unfair that in this country, compared with other EU nations, we drink 12% of all the beer consumed in the EU, but pay 40% of the duty across it?
As I have indicated, I think that situation is not sustainable in even the medium term, and certainly not in the long term.
Britain’s growing ranks of brewers have much more growth potential, which would mean more investment and more jobs to underpin the economy. The Treasury needs to look at whether the way in which beer duty is structured is appropriate for the 21st century. In particular, there is a growing consensus in the industry that the small breweries’ relief scheme, which has done so much to allow new breweries and microbreweries to become established, is now preventing breweries from growing, and in some cases means that they are downsizing to receive the lower duty rates. I know that the Exchequer Secretary has already received representations on that issue.
To look further ahead, as we leave the European Union in 2019 there are also opportunities to consider whether it is appropriate that beer sold in pubs is taxed at the same duty rate as beer sold in supermarkets or other off-sales, and the role that a differential tax rate could play in supporting our pubs, helping keep more of them open, and the social benefits that come with that. The Treasury should also look at supporting reduced-strength beers by expanding the current bracket to cover beers between 1.2% and 3.5%, instead of just up to 2.8% as at present. I have written to the Exchequer Secretary on this subject. Britain has a strong tradition of brewing 3% to 3.5% beers, and if we can incentivise the industry to develop, produce and market beers at that end of the market, there will be an advantage to the industry and to our health. However, while all those areas for reform are important, none of them should distract us from the immediate need to freeze beer duty and tackle business rates in the Budget in three weeks’ time.
If the Exchequer Secretary is not already persuaded by the economic case against a further rise in beer duty, the social case for helping pubs and reducing their business rates, or the political case for doing something that is genuinely popular across the country, he might want to reflect on the personal-political benefits of backing beer. I have already mentioned that a previous proponent of this cause is now the Government Chief Whip. However, it might be even more pertinent for me to point out to the Exchequer Secretary that the three previous holders of his post who presided over recent cuts to beer duty—my right hon. Friends the Members for Bromsgrove (Sajid Javid), for Witham (Priti Patel) and for Loughborough (Nicky Morgan)—all went on to reach the giddy heights of Cabinet office. As a canny Yorkshireman, the Exchequer Secretary may want to reflect on the fact that cutting beer tax is clearly not a bad career move. In all seriousness, I ask him to do the right thing for the longer term: encourage the Chancellor to freeze beer duty in his autumn Budget, act on the disproportionate burden of business rates on pubs around the country, and invest in and support these great sectors, which do so much economically and socially in every part of Britain.
Order. A number of hon. Members have indicated that they wish to speak, so I am going to start with a four-minute limit on Back-Bench speeches, starting with Mr Toby Perkins. Bear in mind that we may have votes shortly.
It is a great pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Dudley South (Mike Wood) on securing this incredibly important debate and the vigour with which he is going about his role as chair of the all-party parliamentary beer group. As chair of the all-party parliamentary group on pubs, I also feel very strongly about the issues that have been raised.
I am not going to repeat all the statistics that the hon. Gentleman laid out. We have already heard many of the financial arguments as to why pubs matter, but the community point is also important. I support the point made by my hon. Friend the Member for Blackley and Broughton (Graham Stringer) about the importance of inner-city pubs. We are seeing so many of them close. We often think about village pubs, but too little is said about those pubs in our communities and on our estates that have really struggled.
It is definitely the case that the pub is the safest place to drink, because there are other things to do there, people do not drink as fast, they have other people around and it is a much more self-regulating environment. That was brought home to me strongly at a meeting I had with a publican who runs the Harley’s bar in Staveley in my constituency. One of his customers had been a regular attender, but stopped going. The publican met him outside the pub as the man was coming back from Morrison’s with bottles of whisky in his bag, and asked him why he was not coming into the pub any more. The man said, “I can’t afford to come in the pub any more.” The publican said that within six months the guy had drunk himself to death, because all those regulating forces were no longer there. The story that we need to get out there is that the pub is by far the safest place for us to drink.
The point about pubs being a big employer of both the young and women has been well made, as has the point about the importance of the pub for tax revenues. I welcome the fact that the campaigning of a wide range of groups finally persuaded the Chancellor to end the beer duty escalator and to cut beer duty between 2013 and 2015. I take issue slightly with what the hon. Member for Dudley South said, because this is a story that I like to tell. The truth of the matter is that the Chancellor who raised most through the beer duty escalator was not Ed Balls but George Osborne. George Osborne took the escalator that Ed Balls had introduced in 2008 and 2009 and escalated it again in 2010, again in 2011 and again in 2012. I support the fact that he ultimately got rid of it, but he milked that cow just as much as Ed Balls did—let us not be in any doubt about that. There was also the big increase in VAT, which has a big impact on our tourism businesses.
The point made by my hon. Friend the Member for Ashfield (Gloria De Piero), and repeated by the hon. Gentleman, about the importance of small breweries’ relief is incredibly important. I really support the fact that the Government have kept that relief.
Sitting suspended for a Division in the House.
Order. We now resume the debate. Mr Perkins has 41 seconds left, but I will be generous and give him a minute to gather his thoughts. Mrs Anne Main will follow and will have four minutes.
I will finish with this. We have spoken a lot about beer duty and VAT, but it is crucial that the issue of business rates is addressed in the Budget. Every member of the Conservative party who stood in the 2015 election stood on a manifesto of a comprehensive review of business rates. That seemed to disappear from the 2017 manifesto, but the issue of business rates is crucial. We have the most expensive corporate property tax in all of Europe, and no Government who theoretically profess to be a low-tax Government can continue to see business rates going up in the way that they have. I urge the Government to get away from an over-reliance on business rates at the expense of corporation tax cuts and bring down business rates for our pubs instead.
It is a pleasure to serve under your chairmanship, Mr Owen. This is an excellent debate, which is timely, coming just before the Budget, as my hon. Friend the Member for Dudley South (Mike Wood) has said.
St Albans is an extremely high property value area. It is a desirable area and its proximity to London makes it a destination for many families fleeing London for a better quality of life. That puts pressure on pubs in St Albans. Many of them are in small listed premises, in heritage buildings. The pubs struggle to survive in a world where big is beautiful and they generate footfall. St Albans is where the Campaign for Real Ale has its headquarters and it has a strong voice within the pub industry. I pay tribute to the landlords and owners of historic public houses in St Albans for the work that they do to keep their brand alive. It is not enough to say that pubs can survive in this day and age without considering the strains put on them. The historic Boot in French Row is a small, quaint, gorgeous pub that went through trials and tribulations trying to expand its kitchen because it has historic listing.
Similarly, we have the Fighting Cocks, one of the oldest pubs whose name derives from the history that encompassed it. Seeing historic pubs with historic pub names is what draws tourists into St Albans.
In my constituency, King’s Lynn also has a historic heart. CAMRA has been really proactive in driving forward all the issues, not least the issue around business rates and the impact on older buildings, which are much more expensive to maintain.
My hon. Friend is absolutely right. Indeed, CAMRA provided me with statistics. There are 62 pubs in St Albans supporting 1,651 jobs with an estimated £32.6 million in gross value added. That is a huge amount put into the local economy. I wrote to the Chancellor about this matter pre-2016 because the rateable value for many of the pubs is enormous. I pay tribute to Sean Hughes of the Boot in St Albans, who is busy collecting signatures. I can do no better in the short time that I have than to read what the petition calls for, because I fully support it. As the hon. Member for Chesterfield (Toby Perkins) said, those who stood in 2015 stood on a manifesto of speaking up on pub business rates. I am afraid I did not read the 2017 manifesto because, like many, I was caught on the hop, so I do not know whether a review of business rates was in it. However, in principle I support that. The petition calls for an interim pub cap
“and a full review of the business rate system.”
“Pubs in St Albans and parts of England have been hit with extortionate business rate increases due to property values increasing over the past decade. We believe there needs to be a fundamental review on the business rate system to stop pubs disappearing from our villages, towns and cities. We are calling for an immediate interim "Pub Cap" limiting increases in rates bills to 12.5% in England (currently operating in Scotland) and a fundamental review of the whole system to ensure that pubs can survive and this British community asset will not be lost forever.”
I wholeheartedly agree with that.
Warm words will not save our pubs. Anything we say today about how important they are, how much they do for charities and how much they are a part of our constituencies will do absolutely nothing unless we have something along the lines of what that petition suggests. I know we are under pressure in St Albans, with an average house price of more than £500,000, but other areas are equally affected. We do not want to be lamenting the loss of our pubs because we did not take the issue seriously and do something about it when we had time to. Now is the time to take action, and I hope the Chancellor is listening. [Interruption.]
Order. A mobile phone is being picked up by the microphone, which we can hear loudly up here.
It is a pleasure to speak in this debate; I congratulate the hon. Member for Dudley South (Mike Wood) on securing it. The Northern Ireland hospitality industry sustains some 60,000 jobs, including more than 45,000 in food and drink. I advocate drinking responsibly, and many of the public houses in my area have a reputation for removing keys from locals if they have ordered enough drinks to be approaching the limit, even if the drinks are not completely drained. I am thankful for that. I ask more people and businesses to take that step, to ensure that people never drive at or close to the limit.
Does the hon. Gentleman agree with me and other hon. Members who have spoken that there is a need for a comprehensive review of the business rate, which puts pubs and other small businesses at a disadvantage—particularly in comparison with cheap booze from supermarkets and other larger businesses?
No one in the Chamber today would disagree with that.
The Government rightly tried to incentivise the production of lower strength beers, up to 2.8% ABV, in order to encourage moderate drinking. Unfortunately, because of the taste of 2.8% beer, that has not stimulated the relevant part of the market. Current HMRC duty receipts show that those lower strength beers make up only 0.15% of total UK volumes. However, the industry has provided concrete evidence that the consumer will drink lower strength beers at 3.5% ABV, which is still significantly below the UK average strength. Legal advice has also been provided, which shows that the Treasury can indeed add another duty band between 2.8% and 3.5%, which would enable the Government to incentivise the production and consumption of lower strength products, in the interests of moderation. There no excuse for that change not to happen now; the current advice is compliant with the EU structures directive, but the Government have so far chosen not to act, or to ignore it. We should not be prevented by the EU, when we are trying to bring in a progressive policy that would benefit the UK.
The contribution of the hospitality industry in Northern Ireland in wages alone is £653.4 million. Tourism in Northern Ireland provides 58,000 jobs; the wider tourism economy contributes £1.6 billion to Northern Ireland’s GDP; and food and drink account for more than 30% of visitor spending. Those are significant figures, on which we can build.
Tourism is vital to my constituency, but does the hon. Gentleman agree that the issue is also communities, and talking to each other? It is a question of talking to each other eye to eye and having a proper discourse—maybe, God forbid, about politics—instead of being on Facebook and Twitter.
Yes, I do hold with that. We all agree—it is very much a part of what we are about.
In Northern Ireland we are happy that we offer world-class shopping, spa facilities, eateries that are second to none, scenic views, and the friendliness of the local populace, but there is a need for Government to keep us competitive. The Republic of Ireland has much lower tax, and we need to address that. The Northern Ireland Assembly has set a target for the number of tourism jobs to grow by an additional 8,000 by 2025. As the House will know, the Assembly is in some disarray at the moment—it is not functioning, so it may fall to us in this place to help the industry. One step would be reducing taxation, something I want to support by taking part in the debate.
Tourism is an export generator—the value was £545 million in 2015. There is no point in being able to get a hotel room for £67 per night if a meal will cost £100; we must address the issue, and take action on what is a false economy. Previous attempts to increase Government revenue through duty rises proved ineffective. As a result of the beer duty escalator, from 2008 to 2013 duty increased by more than 42%, but Government revenues increased by only 11.5%. During that time beer sales in pubs fell by 24%, total beer consumption fell by 16%, 75,000 jobs were lost and 3,700 pubs closed.
Conversely, the Centre for Economics and Business Research found that an additional 750 million pints were sold in 2013-14 as a result of the first cut in duty after the escalator was stopped. It is necessary to spend money to make money. We may believe that increasing tax will help bring income to depleted coffers, but it has been shown that that is not the case. People simply drink at home, as has been said—or in a friend’s home, where no one is watching the limits, counting how many drinks have been had, or considering how safe it is for them to be in control of a vehicle.
In my constituency there are 39 pubs and two breweries—670 jobs and £7 million in wages, with a £14 million contribution to GDP and £5.4 million in tax paid. The issue is about more than a couple of people complaining about the price of beer in their local; it has the potential to be a factor in increasing tourism and helping local businesses. I ask the Minister seriously to consider what is being proposed.
I congratulate my hon. Friend the Member for Dudley South (Mike Wood) on securing this important debate. I am delighted to be speaking, and to stand up for the beer and pub sector, which supports about 800 jobs in my constituency. It gives me the opportunity to promote some of the great produce that can be found in the borders. There are certainly some excellent examples, such as Tempest Brewing Company, from Tweedbank, which recently cleaned up at the Scottish Beer Awards, picking up six awards; and multi-award-winning Born in the Borders Brewery, near Jedburgh, which has recently expanded its bottling plant, creating new jobs in my constituency.
As well as award-winning brewers, there are some fantastic pubs in the borders. They make our towns lively, and in villages they are often a focal point for the community. At a time when banks and post offices are closing, often the only community facility left in a village or community is the pub. We cannot kid ourselves that taxation of the beer and pub sector is not necessary. Excessive alcohol consumption is bad for our health, and often causes antisocial behaviour, so it is right that businesses contribute. A certain level of taxation also reduces consumption, so targeting the problem areas, such as drinks with higher alcohol content, is appropriate. However, the burden on the sector is clearly having an impact, and tax now makes up a third of the price of a pub pint. The beer duty is one of the highest in Europe and I support calls for it to be reconsidered.
We must recognise the positive impact that pubs and brewers have on jobs and the communities that they serve. We must also recognise that the problem of excessive drinking is not the sole responsibility of pubs; it not even primarily a problem caused by the sector. Pubs encourage sociable and responsible drinking in a regulated environment where the purpose is to socialise and enjoy a drink, rather than just to get drunk. By making beer unaffordable in pubs we are only promoting a shift in consumption to the off-trade market, which would not be a good thing in terms of reducing alcohol consumption.
On the issue of business rates relief, my hon. Friend the Member for St Albans (Mrs Main) mentioned the 12.5% cap scheme in Scotland. That has not necessarily been welcomed there. Certainly, in my constituency a number of pubs and hotels face a huge one-year increase. It is capped at 12.5% but, given what went before, and what they were previously paying, many pubs have not welcomed it.
I want finally to make a point that, although not directly related to taxation, is relevant to the challenges that pubs face—the reduction in the drink-driving limit. In Scotland it was reduced a few years ago. I supported the move and do not advocate changing the law. However, there has been a fairly profound impact on pubs— particularly rural pubs. In fact, a third of rural pubs in Scotland have reported a drop in sales of more than 10% since the limit was reduced. I do not think that enough was done to support the sector when the change was made, and I hope that lessons can be learned, particularly if there is a debate as to whether the law should change in England and Wales.
I think that the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) has tempted many of us to renew our acquaintance with pubs in the borders. It is a particular pleasure to take part in the debate, as it was secured by a true champion of the pub—the hon. Member for Dudley South (Mike Wood).
Having retired in 2010 from chairmanship of the all-party group on beer and from Parliament, I might have thought that my days of speaking in such debates were long gone; so I am delighted to say a few words today. In those days I represented the constituency of Selby, which included Tadcaster—still the only town in England that can boast three major brewers. In Keighley, which I now represent, there is one major brewer—Timothy Taylor’s, which dates back to 1858. It is a byword for quality in the beer industry, with brewers who trained at that icon of higher education in brewing, Heriot- Watt University—perhaps the leading university in the field. There was a minor hiccup in relations between Timothy Taylor’s and the all-party group when I voted—it seems so long ago—to ban fox hunting. The then managing director, Charles Dent, promptly resigned his involvement with the group. I can assure the House that this summer in typical Yorkshire fashion, over a pint at Headingley, we let bygones be bygones. I am very much in dialogue with Timothy Taylor’s. There are also breweries such as Wharfedale, Bridgehouse, Wishbone, Haworth steam brewery, Ilkley and, just outside the constituency, Goose Eye.
There has been a lot of talk about statistics; I want to underline just two. One in seven of all the jobs created since 2010 have been in this sector. What has not so far been expressed is how quickly people can rise up this industry; it is, if not unique, then certainly renowned for that. Some £1 billion from Yorkshire goes in taxation from the pubs and brewing industry to the Exchequer—about the same amount that goes from Northern Ireland, as the hon. Member for Strangford (Jim Shannon) said. If only we had a Yorkshire Mayor spending that money! We truly would have devolution.
I want to make four quick points. We should encourage beer exports, and there has been quite a movement towards that from the industry. Some have suggested that export sales should be excluded from the brewers’ volume for duty purposes, as a way of encouraging exports. That should be considered.
The hon. Member for Dudley South was right that under the Labour Government and under the coalition, the beer duty escalator did a great deal of harm. It is good to see the hon. Member for Burton (Andrew Griffiths) in his place, because he achieved what I certainly did not, and I hope that future chairs of the all-party beer group will achieve similar things. He got rid of the beer duty escalator. This is a crucial year for the reputation of the Conservative party and its relationship to the beer industry. Will those three years be known as the Burton interregnum or will we have not just beer duty relief, but rate relief? We clearly need an extension of £1,000 to £5,000 on rate relief this year.
Turning to small breweries’ duty relief, Gordon Brown has been agonising in recent days about his lack of empathy. Whatever the truth of that, he will always be known as the friend of small brewers—it is one of his great legacies—because of that massive change to our economy. At some stage, we will have to look at whether that can be extended. Many family brewers are losing out. They feel that they do not have the advantage of the duty rate relief and do not have the economies of scale that big brewers have.
Will my hon. Friend give way?
I will, in order to gain another minute.
And because my hon. Friend wants to hear what I have to say, I am sure. On the important point about the relief for small breweries, does he agree that although the policy is excellent, its impact sometimes means that brewers cannot grow any more as they will no longer come under it? Perhaps some kind of tapering to allow brewers to go from small to big would be helpful.
The hon. Gentleman does not have to take the full minute.
As you have assured me that your favourite brewery in Yorkshire is Black Sheep brewery, I will take only 45 seconds, Mr Owen.
I urge the brewing industry, which has a great number of good leaders—including Mike Benner at the Society of Independent Brewers, Brigid Simmonds at the British Beer and Pub Association, Kate Nicholls at the Association of Licensed Multiple Retailers and Tim Page at CAMRA—to address this issue. The industry needs a consensus to put to Government about reform of the progressive beer duty. That would be the ideal situation.
Finally, I urge the pub industry not to absent itself from the debate about minimum pricing. If the Supreme Court upholds the Scottish Government’s decision to introduce minimum pricing, this issue will be back on the political agenda. A decade ago there was a strong alliance between the health lobby and many in the pub sector. That led to the smoking ban, and I think there could be considerable scope for renewing that alliance.
It is an honour to follow the hon. Member for Keighley (John Grogan), who is such a champion of the pub and beer industry, and to serve under your chairmanship, Mr Owen. During the last vote, I bumped into the Chancellor of the Exchequer. I said, “Chancellor, come down to Westminster Hall and listen to the debate on the beer duty,” and he smiled. I assume he is not here because he has rushed back to No. 11 Downing Street to pore over a spreadsheet and work out how much extra he can earn for the industry by reducing the taxation on beer—and also how popular he can become with each 1p reduction.
It is also a pleasure to be here with the former chairman of the all-party beer group, my hon. Friend the Member for Burton (Andrew Griffiths), who managed to have three successive 1p beer cuts and a freeze under his chairmanship—no pressure, then, on my hon. Friend the Member for Dudley South (Mike Wood), the current chairman of the beer group!
I get criticised for always prattling on about the pub that I live next door to, the Swan with Two Necks. In an emergency, I can be in that pub in three seconds. I will correct that today by mentioning three other pubs that serve the community that I represent. Alex Coward, the landlord of those pubs, is with us today and has lobbied me about the importance of cutting the beer duty. There is the White Bull at Alston, the White Bull at Gisburn and the Alston Arms at Longridge. I have eaten and drunk in all three of those pubs at some stage. Alex told me about all the charities that they support, from the Brittle Bone Society to the Air Ambulance, to Macmillan, as well as Longridge juniors and Longridge town football club and the local Joanne Smith Wareing cancer charity.
We know that pubs are a focal point for a lot of occasions, such as christenings, funerals, birthdays or just for people coming together. That is how important they are. The current chair of the all-party beer group went through a list of reasons why local pubs are important to the community, so I do not need to repeat those, but I want to stress a number of things about how important the local pub and brewing industry happens to be.
I hope that the Government will look at lower taxation on lower gravity beer. They tried an experiment on beer of 2.8% or less, but it has not taken off. People have not flooded to taste that beer, but I believe there is an audience for beer that is between 2.8% and 3.5% in strength. We are told that the Treasury would love to do it but that it cannot because of the European Union. Well, the good news is that we can all rush to our pubs post-March 2019 and celebrate our leaving the EU, but there are things that the Treasury can do, such as introduce a new rate of 2.8% and 3.5% and have a different rate of taxation on it. I have legal advice stating that the Government can do that, so I hope the Treasury will look at that.
We have argued for lowering the taxation rate generally. Every 1p that it was reduced by in the past created 4,000 more jobs in this area. Let us look again at business rates, which are going to clobber a load of pubs. I am a member of CAMRA. Twenty-one pubs are closing every week and that is a huge loss to the community, particularly when the pub is the only one in a community. It can have a savage impact.
As the hon. Gentleman knows, I am a proud representative of the Titanic brewery in my constituency. For the record, there is no better beer, but it also has a small pub estate, and its business rates have gone up by 37%. That is £70,000 a year that it can no longer invest in its estate or in its people. Surely at this point we need to reflect on what is really happening in the beer industry and what is likely to happen to pubs.
The Treasury really has to take this issue on board. Business rates, the living wage and other costs that are heaped on the brewing and pub industry mean that this has to be looked at carefully. Pubs are closing. I mentioned Alex Coward, who employs 45 people in the local community, and we represent a semi-rural, or rural, area. These are vital jobs in those areas.
A lot of pubs play music and pay their licence under the Phonographic Performance Limited licence. A lot of pubs are now receiving a new notification. If they have a TV on the wall and show live TV—not just the sport, but something else—they are being asked to pay a minimum of £100. The larger the pub, the more they will be asked to pay. As a lot of people have mentioned, it is cheaper for someone to buy beer from a supermarket and then sit at home alone watching a big TV. How miserable is that! We need to do more to incentivise people to use pubs. If that means lowering taxation on pump-pulled beer compared with beer that someone buys in a pack—12 bottles or 24 cans—we need to do that. I am told again that that can happen when we leave the EU in March 2019, and I hope the Treasury will look at it.
I call Anne Marie Morris to speak for four minutes and I will then reduce the time limit to three minutes, because I want to hear the three next speakers after that. They will be Peter Aldous, Steve Double and Fiona Bruce.
Pubs are a core part of my very rural constituency and provide 2,000 jobs overall. In those rural communities, many pubs are the only community centre. The small shop has gone. The post office has gone, and many of the pubs are now becoming the local store, in addition to being the local pub. We really need them but, despite all that, they are being penalised.
We have discussed a number of taxes, but I will focus on business rates. The challenge for pubs, as I said earlier, is that their business rates are based on turnover. As I understand it, the original intent was to base the tax on the turnover that could be generated given the square footage of the public house. In reality, the actual turnover is taxed. Not only does that mean that it is not comparable with how business rates in other sectors are calculated, but it also penalises successful pubs with rises in business rates and effectively gives handouts to unsuccessful pubs. That does not seem right.
The Smugglers Inn, a successful pub in my constituency, is a case in point. Before the revaluation, its rateable value was £66,500, and it paid £33,000 in business rates. After the revaluation, its rateable value was £125,000, and its business rates £60,000—a rise of 87%. The advice that the landlords received when they complained was to reduce their turnover. I thought that we as the Government of this country wanted to increase productivity, not cut it.
The rate relief provided in the 2017 Budget was welcome, but the £1,000 for pubs and the discretionary amounts available were not distributed quickly; the guidance from Government was slow. I am pleased to say that much of it has now been distributed, but the Government should look at it again. If the same happens again, we need to ensure that the money needed is distributed.
Fundamentally, the problem is that the system is unfair. If we want our pubs to survive, we absolutely must do more to assist them. As has been said, many of them are rural, meaning that their costs are high: pensions, living wage, tax. Burst water mains and power failures, which are common, cost money. They have to use kerosene and LPG, which are much more expensive and must be bought in bulk in advance—
Sitting suspended for a Division in the House.
I will give an example of the costs I mentioned. One of my publicans told me about the cost of Bombardier. In July 2012, a nine gallon barrel cost him £42.99 plus VAT and he sold it at £2.20 a pint. In July 2017, the same barrel cost him £120 plus VAT and he sold it at £3.80 a pint—not the £6.60 that would have reflected the cost.
We need to properly address the burdens that our pubs face. My focus is on business rates. I endorse other hon. Members’ calls for a thorough review of the whole business rates system. The valuation office often gets valuations wrong because it is no longer staffed by local people and does not visit sites. My local council often pays refunds to schools and doctors’ surgeries, but they are the last types of organisation that should be getting refunds after overpaying.
We need to review the appeals system. If pubs have got it wrong, the appeal system is not fit for purpose—it is slow and hard to afford. We should also look at the turnover methodology for pubs, which clearly does not work. What is supposed to happen, and what happens, penalises the good and gives a subsidy to the not so good. That is not fair and not fit for purpose. Because of these circumstances and their importance, we need to look at a permanent rate relief system for all our pubs.
It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Dudley South (Mike Wood) on securing this debate. I will focus on the specific issue of small breweries’ relief. I ask that the Government consider removing export volumes from the relief’s calculations.
There is clear evidence that the current arrangements hold breweries back from increasing exports, investing in buildings and equipment, and creating new jobs. St Peter’s Brewery near Bungay in my constituency was established in 1996 and set out specifically to target the export market. Its exports to 50 countries make up 42% of its turnover. St Peter’s is a great British success story, but it is constrained from doing better by the current structure of small breweries’ relief. Although the relief is generous to microbusinesses, it discourages exports by breweries looking to grow and it significantly disadvantages small and medium-sized brewers above the threshold that have export potential. St Peter’s advises that removing the duty on exports would enable it to invest in new buildings and equipment and to increase their workforce by five from 18.
St Peter’s is not alone in making the case for removing export volume from the SBR calculations. That case is also supported by the Society of Independent Brewers, which describes it as a “no brainer”, and by the British Beer and Pub Association, which includes it in its compelling eight-point export strategy. As Brexit approaches, it is vital that we realise the full export potential of an industry that is a fundamental part of the British brand. A relatively small fiscal change in next month’s Budget would enable breweries such as St Peter’s to realise their full potential, be part of a great British success story and create new, much needed jobs in their local communities.
Order. Before I call Fiona Bruce, let me say to Iain Duncan Smith that his debate will start at approximately 4.30 pm.
Pubs are indeed great community assets, but many face challenges because of the availability of cheap alcohol in supermarkets and off-licences. Cheap alcohol carries tremendous costs to health, too. One particular product, high-strength white cider, causes disproportionate levels of harm and perpetuates deprivation and health inequalities. It is often called the drink of choice for the homeless, the lonely and vulnerable young people, many of whom are on the streets, underage or drinking simply to blot out their problems. It results in death for many who drink it, but it is people’s drink of choice because it is so very cheap.
High-strength cider has developed largely because, as a result of anomalies in the tax system, it has the lowest cost per alcohol unit of any product on the market. A 3-litre bottle of white cider contains 22 units—the equivalent of 22 shots of vodka—and can be bought for just £3.59. The homelessness charity Thames Reach says:
“Super-strength drinks have become one of the biggest causes of premature death of homeless people in the UK, and…are doing more damage than both heroin and crack cocaine”.
Some 78% of the deaths in Thames Reach’s hostels are attributed to high-strength alcohol.
Before I speak about how the Treasury can address this problem, I would like to mention the touching story of one mother, Joanne Good, who came to Parliament in February to tell us about her young daughter, Megan, who went out to a new year’s eve party aged 16 and drank half a bottle—1.5 litres—of Frosty Jack’s. She died in her sleep. These high-strength products should not be available for pocket-money prices. In the light of the Government’s commitment to put social justice at the heart of all they do, introducing a new higher band of duty in the forthcoming Budget that applied to cider with an alcoholic strength by volume of between 5.5% and 7.5% would be a targeted and proportionate response. It would leave the majority of ciders completely unaffected; the vast majority of products subject to the new rate would be white ciders.
There is compelling evidence that altering duty bands can influence consumer behaviour, so I ask the Government to consider increasing the rate for this band of drinks. I am offering them a healthier option. With an increase in tax take, what is not to like?
It is a pleasure to speak in this debate; I congratulate my hon. Friend the Member for Dudley South (Mike Wood) on securing it and on his excellent opening speech.
I have the incredible honour and privilege of representing the constituency that contains St Austell Brewery, which since 1851 has been brewing high-quality beer in the centre of St Austell under the ownership of the same family. It now enjoys incredible success and exports a number of its brands around the world.
The three years of beer duty cuts and the subsequent freeze were incredibly positive, not just because of the money they saved on the cost of a pint of beer, but because they sent the brewing industry the clear message that the Government backed it and were behind it. That gave brewers the confidence to plan for the future and invest in products, plant and machinery to grow their businesses and the market. Unfortunately, the rise in the retail prices index earlier this year has undone virtually all the good work of the cut and freeze years and has sent a negative message to the industry.
I encourage the Minister to take back to the Chancellor and the Treasury the strong message that this year we really need at least a freeze in the beer duty, to restore confidence in the industry. We are a Conservative Government, after all; we believe in low taxes, and we know that punitive taxes do not work. Cutting, or at least freezing, the beer duty will allow the sector to continue to grow, with more and more jobs being created.
I must also mention the small breweries’ relief scheme for brewers who produce up to 60,000 hectolitres a year—I did not know what a hectolitre was until a couple of days ago, but there we go. That threshold is clearly acting as a brake on small breweries that prevents them from investing and growing beyond it. Some form of tapering would be very welcome, because we have created a squeezed middle—brewers who are just above the threshold but are paying much higher rates of beer duty. I believe it is time for a review, and I ask the Government to work with the industry to get an overall view of small breweries’ relief and see whether the limit can be increased.
Does my hon. Friend support my request that the Minister consider applying small breweries’ relief to cider producers, who do not enjoy that advantage at present?
I absolutely agree that cider should be considered for the relief as well.
The Budget gives us an opportunity to send the clear message to the brewing industry and our pubs that we back them, we understand how essential they are and we need to take action to support them.
I thank the Labour and Scottish National party Front Benchers for agreeing to shave some time from their speeches, to allow all Back Benchers time to get their points across.
I congratulate the hon. Member for Dudley South (Mike Wood) on securing this debate and on his excellent and thorough opening speech. There has been great cross-party agreement today about the important role that pubs play as employers and as the hearts of our community. We have also heard heartfelt pleas for freezing the duty on beer and for assistance with business rates.
The Scottish National party is proud of the substantial economic contribution made by pubs, breweries and microbreweries to the Scottish economy. The brewing and pub industry supports the employment of 60,000 people in Scotland, some 72% of whom are directly employed in it. Individuals who work in these jobs earn a combined £767 million per year; the industry contributes £1.6 billion to the Scottish economy and generates £972 million in tax revenues for an annual investment of only £69 million.
The SNP has long supported a wider evidence-led overhaul of the alcohol duty regime. We believe that evidence-based decision making that levies alcohol duty based on alcohol content is fairer, more equitable and more in line with encouraging a healthier approach to drinking. That is what the Scottish Government’s minimum alcohol pricing policy seeks to do; it will not attack the price of a pint in a pub, but it will affect supermarket cheap alcohol promotions.
The Scottish Government are encouraging new small businesses in the drink industry with the small business bonus, which provides 100% rate relief on business property up to a rateable value of £15,000. As the hon. Members for St Albans (Mrs Main) and for Berwickshire, Roxburgh and Selkirk (John Lamont) mentioned, the Scottish Government also introduced a 12.5% cap on business rate rises for the hospitality trade. The national chairman of CAMRA, Colin Valentine—a constituent of mine—said that the cap
“has made a big difference and in some cases it has been, and will be, a life saver”
for pubs, so the policy has clearly been of some assistance, although I am sure he and others would say that there is much more to be done.
The Scottish Government are working closely with public bodies and industry to support jobs, infrastructure and the thriving sector. I am happy to say that start-ups have helped the Scottish brewery sector to double in size since 2010. In 2016, 115 breweries were up and running in Scotland, compared with 55 just six years earlier. I am very proud that my constituency of Edinburgh South West hosts one of Scotland’s most iconic breweries: the Caledonian Brewery in Slateford Road. Edinburgh South West also boasts one of Scotland’s most successful microbreweries, the Edinburgh Beer Factory, which is located on the Sighthill industrial estate.
As the hon. Member for Keighley (John Grogan) said earlier, Heriot-Watt University in my constituency has an International Centre for Brewing and Distilling—a unique facility devoted to teaching and research, and meeting the needs of brewing, distilling and malting industries worldwide. I applaud Heriot-Watt University, which of course recently won International University of the Year from The Sunday Times.
The Caledonian Brewery, which is in the heart of Edinburgh and close to my constituency office, opened in 1869 and it has been preserved by Heineken UK, which now owns it, as a working masterpiece of manufacture, utilising many of the more old-fashioned methods of brewing but in a modernised setting. Heineken’s UK headquarters is in my constituency at South Gyle, employing around 550 people. Of course, Heineken is one of the UK’s leading pub, cider and beer companies, and more than 90% of the beer it sells in the UK is brewed here. It is also a major supporter of British agriculture, sourcing 100% of its malt and barley for its UK-brewed beer from UK farms and maltsters.
Heineken is also a passionate supporter of the great Scottish pub, through its Star Pubs and Bars business. I am proud to say that I have visited several of its pubs in my constituency, including the Jolly Botanist; the Athletic Arms, which is a very old Edinburgh pub known as “the Diggers”, where I held my victory party after the SNP tsunami in 2015; and the Spylaw Tavern. These are all thriving, local, community pubs.
I also applaud Heineken for what it puts back into the community in Edinburgh. In the summer of 2016, I joined Heineken employees, in collaboration with the Edinburgh Festival Fringe Society, in a volunteering project to regenerate the Broomhouse Centre in Broomhouse in my constituency, which is a charity that provides personal, social and community development opportunities. At the end of a day of hard work, we celebrated by enjoying performances from Edinburgh festival artists.
Earlier, I mentioned the Edinburgh Beer Factory, which is also in my constituency. It was founded just over two years ago and is an independent, family-run brewery that is going from strength to strength. It has won multiple awards, including the award for the UK’s best Helles lager two years running and the award for the world’s best American brown ale in 2017. The company’s products are really quite outstanding and 2018 will be an exciting time for it, as it launches two new products and starts to export its beers. However, like many other companies, the Edinburgh Beer Factory would like to see a freeze in beer duty in the next Budget, as well as measures to encourage exports. Beer is in the top three British food and drink exports, and, like all parts of the British food and drink industry, brewers fear the consequences of Brexit and require more reassurance on that front.
I am very grateful to the hon. and learned Lady; if the next Front-Bench spokesperson takes the same amount of time, we will get a good response from the Minister.
We hope, Mr Owen. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Dudley South (Mike Wood) on securing this debate. It was in his company and that of my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) that last week I tasted and enjoyed many UK beers with the Titanic Brewery.
I will comment briefly on some of the contributions. My hon. Friend the Member for Ashfield (Gloria De Piero) made very astute references to microbreweries and the tax break provided for them by the last Labour Government; I hope the Minister will tell her that that will be retained. My hon. Friend the Member for Coventry South (Mr Cunningham) made an interesting point about the valuable work that young people and students can get in the hospitality industry, including in pubs.
It is worth mentioning at this stage some of the worries of brewers and pubs in the city of London about their requirements for European labour after Brexit. We also need to look at the planning issues, which my hon. Friend the Member for Barnsley East (Stephanie Peacock) mentioned, including permitted development rights.
The British pub is renowned around the world. Since the oldest one was established in the 11th century, the pub has continued to be a central feature of British life—a unique social hub for meetings, discussion and debate. Since then, of course, the world has drastically changed, but the continuity provided by the presence of a pub in the community remains. It is important that we work to preserve and encourage the growth of our pub industry; it makes both economic and social sense to do so.
According to the British Beer and Pub Association, the sector supports 900,000 jobs, with 42% of them held by under-25s; generates £23 billion in economic value; and provides £13 billion in tax revenues. On top of all that, 30 million adults visit the pub every month, which is proof that the British pub is not only a business but is at the heart of our communities. It brings people together and continues to be on the “to-do” list of almost every tourist visiting the UK.
Yet drinking establishments across the UK continue to be under severe threat. We have all seen the boarded-up pubs in our constituencies, not least because of the burden of the business rates evaluations but also because of the unequal relationships between large pub-owning businesses and pub tenants. Unfortunately, the pubs code as it currently stands has failed to deliver effectively what it was set up to do, but that is a debate for another time.
I return to beer taxation. As colleagues have already said, it was announced in the 2016 Budget that the duty on beer, spirits and most ciders would be frozen in the year 2016-17. That freeze on a typical pint of beer followed three consecutive years of beer duty cuts. On the other hand, duties on other alcoholic drinks, including wine at or below 22% alcohol by volume and high-strength sparkling cider, rose by retail prices index inflation. However, in March 2017 the Chancellor announced an RPI increase for beer too, which beer groups have called a “setback”, especially given the fragile environment that pubs find themselves in.
Can the Minister confirm what the beer duty RPI increase has meant in prices for customers and what mechanisms are in place to monitor the effectiveness of any such measure? When the beer duty freezes were introduced, Labour did not oppose them, but we asked questions about what the tax freeze meant in distributional terms. For example, the freeze favoured those who consume more of the relevant types of drinks. The equalities impact statement relating to last year’s freeze noted that
“any changes to alcohol duties will have an equalities impact that reflects consumption trends across the adult population”.
However, it failed to outline the specific equalities impact with respect to gender.
Although men are more likely to drink excessively than women, statistics from the Office for National Statistics show that wine, the tax on which was not frozen, is the most popular drink among women, while the most popular type of drink among all ages of male drinkers was normal-strength beer, lager, cider or shandy. Additionally, many trade bodies questioned why wine was singled out for a duty rise. Any future decision about alcohol levies should take that point into consideration.
Underlying this debate is a recognition of the importance of the pub as a local community hub and of the need to ensure that we do what we can to support it. That is why Labour is committed to securing the long-term future of pubs and the hospitality sector. Action must be taken to ensure that pubs are profitable and worth running as independent small businesses.
The Conservatives have neglected the needs of small business in favour of introducing tax breaks for big business that have failed to stimulate investment or create the high-skilled, well-paid jobs the country needs. Their cliff-edge approach to Brexit risks our access to the single market, and risks damaging all business by prioritising an economically damaging, undeliverable and unworkable cap on immigration at all costs.
Labour is the party of small business. We know that small businesses are the backbone of our economy, accounting at the start of 2016 for 99.3% of all private-sector businesses and 60% of all private-sector employment in the UK, or 15.7 million people. That is why we will end the Conservative attacks on small businesses by reforming business rates, scrapping quarterly reporting, ending the scourge of late payments and reforming employment allowance. Under a Labour Government, pubs will have the support necessary to thrive and grow.
I am grateful to the hon. Lady for her remarks and for allowing the Minister a full 10 minutes, unless he wishes to allow the sponsor of the debate to finish. Either way, I will call time at 4.30 pm.
It is always a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Dudley South (Mike Wood) on securing this well attended and enthusiastic debate. I participated in the Adjournment debate seven years ago—I remember it well. I take this opportunity to commend the work of both the all-party parliamentary beer group, which my hon. Friend the Member for Dudley South chairs so effectively, and of which my hon. Friend the Member for Burton (Andrew Griffiths) is a distinguished former chair, and the all-party parliamentary save the pub group. No one in the pubs and brewing sector across our country can be in any doubt that they have some enthusiastic and eloquent champions within Parliament.
I will try to respond to as many of the issues as I can, but I am sure that hon. Members will appreciate that I am not able to pre-empt what my right hon. Friend the Chancellor may or may not say in three weeks and one day’s time. The requests to do so have been very tempting, but I am afraid that those making them will be disappointed. Before commenting on duty, let me just say that the Government recognise the importance of the UK beer and pubs sector. We hugely value the industry and its contribution to employment, to promoting responsible drinking and to community life. The sector’s footprint covers every single constituency in the country.
As colleagues across the House have said, pubs play a central role in our communities, whether in urban areas, in villages or on the high street. They are often far more than just a social venue; they double as restaurants and I can think of somewhere where they are also the village shop and, indeed, the post office. In my constituency we have a very good not-for-profit organisation called Pub is The Hub, led by John Longden, which does fantastic work helping pubs to diversify their offering.
Colleagues have also mentioned the charitable work in which pubs are involved. Pubs raise more than £120 million per year for charity, so there is a significant impact. The British Beer and Pub Association estimates that the sector as a whole invests more than £2 billion per year in its pubs and breweries, which in turn has an impact on employment; the sector is estimated to employ nearly 900,000 people throughout its supply chain, generating £23 billion in economic value. The very good points made by colleagues about the sector’s employment record have been powerful, and I entirely agree with them. In the run-up to preparing the Budget, I have met the British Beer and Pub Association and other businesses from the industry, including pubs and brewers of all sizes, and we recognise the contribution they make to economies and to the wider beer market—I have made that very clear to them.
The number of breweries in the UK has risen by 64% in just the past five years, to more than 2,000. The growth in the number of small breweries in recent years has increased the diversity and choice in the beer market, and has promoted consumer interest in a much larger range of beers, which has benefited the entire sector. My hon. Friend the Member for Dudley South commented on export, and I can provide some further information about that. More than 1 billion pints of beer are exported from Britain every year and reach 184 countries. Beer is one of the top three food and drink exports, generating nearly £700 million in sales—nearly £2 million, therefore, every day.
Colleagues have spoken about beer duty. I must say, first, that since ending the escalation of the beer duty in 2013, we have demonstrated clear Government support for this industry. After ending the duty escalator, the Government proceeded to cut beer duty in the 2013, 2014 and 2015 Budgets, before freezing it in 2016. It is worth noting that, as has been the Government’s policy since 2013, the public finances assume that alcohol duties will rise with the retail prices index each year. That means that there is a cost. If we choose to cut or freeze duties, there is an impact on the amount of money taken into our Treasury, which affects other areas of public expenditure or perhaps means that we have to seek to raise tax elsewhere. We just need to balance all those points; colleagues must remember that we are still running a giant deficit, which we inherited from the Labour party.
I know that hon. Members will want to reiterate the point made here this afternoon, that cutting duty supports growth and increases revenue. We have seen some evidence of that. I am, instinctively, a low-tax Conservative and I recognise that the lower the tax environment, the more businesses have to invest. It is not as straightforward to see direct cause and effect where we have had cuts, but the principle is, I think, understood. We, therefore, had to take the difficult decision last March that beer duty, along with other alcohol duty rates, needed to rise in line with RPI, but it is worth noting that in light of all the cuts and freezes to beer duty since 2013, a pint of beer costs 11p less than it would otherwise.
Some hon. Members have mentioned the price difference between the on-trade and the off-trade. That issue is raised regularly, and people would like to see the Government applying higher duty rates in the off-trade. Currently, however, that is not legal. European Union law requires member states to charge excise duty on all alcohol and alcoholic beverages, which prevents the UK from selectively charging excise duty on particular products, such as off-trade alcohol, or relieving other sectors, such as on-trade. I need to be clear about that so that we can manage expectations here. I cannot say what is in the forthcoming Budget, but I can say that I will take to it all the representations from today’s debate and share them with my right hon. Friend the Chancellor.
A number of colleagues have raised the issue of business rates, recognising that they are a high fixed cost for some businesses, including pubs. We fully recognise that, and that is why in last March’s spring Budget the Chancellor announced a £1,000 business rates discount for pubs with a rateable value of less than £100,000. To put that into context, that is 90% of all pubs, which basically means that the pubs that do not qualify are more likely to be managed by the much larger chains and are therefore able to manage business rates much more easily. Having said that, I can assure colleagues that we are aware of the request made both here and by the sector to extend the discount, and I can confirm that we will include it within our Budget representations, as we will the comments on business rates overall. However, I should just note that the cuts in business rates announced in the 2016 Budget will cost nearly £9 billion over the next five years, so we are out there helping businesses.
I turn finally to small brewers relief. We know that the number of small brewers has increased significantly over the years, from 400 in 2002 to 2,000 now. I mentioned earlier that the Government recognise that that diversification has added to the sector and the small brewers relief has really helped the growth of the industry. However, we are aware of the concerns about small brewers relief that many have raised with me. When I consider what we need to do, I want to ensure that we work with the whole sector. I want to work with the sector, not against the sector, to support growth, and I would like to see what evidence can be produced to suggest that we can have some uniformity of opinion before moving anywhere forward.
We have heard the points that my hon. Friend the Member for Congleton (Fiona Bruce) made about white cider and will respond in due course. We have had a consultation on that; there is no doubt that it is a problem area.
I finish the debate by saying that it has been a great, constructive and positive one. We have clearly demonstrated support for the sector and the Government are clearly a part of that, with all the actions we have been taking, for all the excellent reasons that have been presented throughout the debate. I assure everyone here that I have listened keenly and that we will take the contributions to be Budget representations. It is only three weeks and one day until we all get to hear what the Budget says—not very far away. I thank hon. Members once more for their contributions and for raising the issue.
I thank the Minister. I call Mike Wood to make the concluding remarks.
I thank the Minister for making a generally positive response and for the many meetings he has had with colleagues and industry groups over the past few weeks, and will have over the next few weeks. I thank the many industry groups that have contributed to support Members in this event: CAMRA, the British Beer and Pub Association, the Society of Independent Brewers, the Association of Licensed Multiple Retailers and the Small Brewer Duty Reform Coalition. I also thank the many hon. and right hon. Members—
Motion lapsed (Standing Order No. 10(6)).
South Woodford Post Office
[Mr Nigel Evans in the Chair]
I beg to move,
That this House has considered the proposed closure of South Woodford post office.
It is a privilege, as ever, to serve under your chairmanship, Mr Evans. I will try to take interventions from colleagues who also have a direct interest in the subject of this debate: the proposed closure and removal of South Woodford Crown post office in my constituency. In 2016, the Post Office announced the closure of 31 Crown post office branches. In January this year, a further 37 Crown post offices were identified for closure, putting approximately 300 jobs at risk, including at the South Woodford Crown post office. That has caused huge and legitimate concern among many of my constituents.
I want to go back to 2008—
Order. Before the right hon. Gentleman warms up, I suspend the sitting for 15 minutes while a Division takes place in the House.
Sitting suspended for Divisions in the House.
It is a privilege to take so long to read about 35 words—that would normally be called a filibuster, I think, worthy only of my great hon. Friend the Member for Stone (Sir William Cash)—but I will now endeavour to proceed.
The debate is about the closure of the Crown post office in South Woodford. I want to go back to 2008, when I opposed the closure of Woodford post office on the High Road, a small sub-post office. At the time, the Post Office promised me that the Crown branch in George Lane could take the extra trade and it would not be a problem. I argued that it was still a bit of a walk and so on for some of the older residents, but none the less, there was at least the Crown post office there. Now, less than 10 years later, it has reneged completely on that guarantee and will leave the whole area without a post office. I find myself yet again campaigning—only this time I am campaigning against the reassurances and assurance that the Post Office gave me, to show that it cannot be trusted at any time on these issues in any community.
With the latest round of closures and franchising, the Crown post office network will have just 214 branches, a fall of more than 40% since the start of 2014, when it stood at 373. The Post Office has looked for a franchise partner—another high street retailer that would be willing to incorporate a post office counter into its premises—but there is evidence that fewer people use such outlets. I put that point to members of the management, who came to see me a few days ago. They said that they did not recognise my figures, but I maintain that most of the evidence from colleagues suggests that fewer people use such outlets. For example, a post office was closed in Maidenhead, and when the service was relocated to a WHSmith unit, it saw a 40% drop in business.
On the issue of footfall, does the right hon. Gentleman agree that if we remove the Crown post office, which a lot of my constituents use, it will affect the surrounding businesses? Therefore, the Post Office’s figures could be proved wrong.
The hon. Gentleman is correct. Such figures are often used to justify things, but they are never returned to after the event and it is never recognised that they did not stack up. I know for a fact that many elderly people will not use a post office in a store—I think the Post Office wants to use an electrical retail store—because they feel intimidated and pressured to buy goods. It is unfair to do that, and it will only create further problems for those who have grown used to the services.
Following the announcement, I met Clive Tickner and Peter Meech—local representatives of the Communication Workers Union, whom I congratulate on their steadfast determination to work with anyone, regardless of their political party, to try to save the post office. They explained that the staff at the George Lane branch are worried about their jobs, and there is good evidence why they should be. Despite the Post Office’s assurances, until an agreement is made with a franchise partner, the staff will not know whether they have a future with the Post Office. They also informed me last year that when branches are moved, most staff—many of whom have years of knowledge about post office service provision—leave the service altogether. They explained to me that, in 2014-15, only 10 out of 400 staff from the Crown offices that were closed were TUPE-ed over to a new retailer, and only six staff out of more than 200 were TUPE-ed over in 2006. There is a genuine concern. In fact, when I talked to the Post Office management, it became clear that the Crown post office is being shut for that very reason: they will employ people on lower rates with less understanding of the service. I found that peculiar for anybody who wants to provide a good service.
I give way to my constituency neighbour.
I am grateful to the right hon. Gentleman for securing this really important debate. I join him in congratulating the Communication Workers Union on its campaign to save Crown post offices. He correctly described the impact on staff, but I warn him, from our experience of the closure of the Crown post office on Barkingside High Street, that the Post Office often closes Crown post offices with no care or consideration for what will follow. That premise remains vacant and is an eyesore on Barkingside High Street. Many of my Barkingside residents are concerned, and my constituents who use the post office on George Lane are also concerned about what the future holds for that part of the high street.
I have been looking at that issue, and the hon. Gentleman is absolutely right. He backs up everything I have been saying about the likely consequences for the Crown post office we are debating.
As previously suggested by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) in his debate on the Post Office, which many people took part in, the Post Office should use its premises better. I know of no business that goes around reducing its outlets solely as a way of lowering its costs to the point at which it somehow breaks even. Why is it in business at all if its sole purpose is to make sure it has as few premises to do business from so that it can say it has managed to meet the challenge?
As an illustration of the point that the Post Office does not use its outlets properly, its financial services, which should be a key generator of revenue for the business, are diminishing. Earlier this year, 150 financial specialists were made redundant. The Post Office is locked into its partnership for financial services provision with the Bank of Ireland until 2023, which prevents it from creating a more profitable arrangement. The Cass business school at City, University of London produced a report for the Communication Workers Union entitled “Making the Case for a Post Bank”. I want to share some of the points it raises, because I think it is relevant to the reason why the Post Office is embarked on the wrong route.
If the Post Office were to establish a post bank, it could ensure its long-term profitability by expanding its services and increasing its revenues. In addition, a post bank would probably offer other benefits to users, such as better access to finance for small and medium-sized enterprises, and improved financial inclusion for those who struggle to access services with the traditional banks. It would also align the Post Office with the successful strategy of other postal operators around the world. We seem to be almost unique in not using that concept to drive revenue and not having qualified staff. The Cass business school states that the amount of initial capital needed to create a post bank is equal to the investment that the Government have put into the Post Office in the past seven years. Interestingly, it also estimates that the profits that a post bank would generate would eliminate the need for an ongoing annual subsidy, putting the Post Office on a sustainable footing for the future.
It is worth reminding the Minister, who I know will respond to this point, of the figures for the Metro Bank. The way it has succeeded is really quite startling. The banking authorisation process to set up that challenger bank began in 2009, and in 2010 it launched its first branch. What is interesting is that its asset growth is 64% year on year and its revenues are up 62% year on year. It has strong common equity tier 1 capital ratio of 18.1%, and has seen a record 260,000 increase in customer accounts to a total of 915,000. While that is going on, it is also increasing its representation in the community and has opened about 41 stores in the past six years. On the one hand we have an organisation opening up in and serving the community, and on the other we have a well-established organisation retreating from the community and determined not to serve it in the way it could and should.
The Cass business school report also points out that the Post Office is currently suffering from a weak financial performance and lacks a clear plan to ensure long-term sustainability, which is true. The partnership with the Bank of Ireland has not delivered the expected results—I think it is a bad deal. One of the main drawbacks of the current partnership model, in terms of revenue generation, is the strong dependence on the partner’s will and ability to expand the business. As we know, the Bank of Ireland has struggled since the crash of 2007 and is not really interested in expanding its business. Being locked to it is a bad deal for the Post Office, and yet it shows no determination to try to change that.
The Post Office’s overall commercial revenue has therefore been virtually stagnant for the past few years. Compared with what overseas post offices are doing, it is really poor and verging on the pathetic. Even in places such as Italy, revenues in the postal area are predominantly driven by the financial sector, which secures post offices in high streets. Other countries do the same, but here in the UK the proportion of revenues that the financial sector is likely to drive is next to nil.
The Post Office possesses a positive public perception, compared with traditional financial institutions. Creating a post bank is one way of helping it to increase its revenues. My question to the Minister, therefore, is, why is the Post Office not making more of banking, financial services and other areas—particularly given that it is a trusted presence on the high street while most conventional banks have sunk in the public’s estimation?
It is also worth reminding the Minister, the Post Office and the Government that post offices are not just meant to sit there; they are an integral element of high streets, which, bit by bit, are being removed. The banks have disappeared, and in many areas, including my own, there is real pressure to get rid of small industrial estates and start building on them. Those industrial estates, however, are vital to the life of communities, because people who work on the high street during the day or use it to shop for food and so on and so forth would otherwise be out of work and not in that area. That post office is like that, an integral element.
The absence of any sense of innovation in the Post Office is remarkable, given that it owns prime sites that could be used flexibly. When I was at the Department for Work and Pensions, I wanted to persuade the Government to allow post offices to be used for outreach, for identification. The Post Office was utterly negative about the idea and made no effort to entertain it, but I hope that the Government will press it again. Post offices with terminals where people, the elderly in particular, could receive good, reasonable advice about benefit claims might easily be utilised for further Government activity, beyond all the other existing work, especially with identity checks becoming more necessary and vital for the Home Office, and with the roll-out of universal credit. People might feel more comfortable going to a post office than to a jobcentre, so that is a perfect role for post offices and one that would enhance Government programmes. The Post Office has a unique and highly identifiable position as a high street brand, and I cannot understand why it is insisting on backing away from it, as with my Crown post office on the corner of the very road that leads 300 yards down to the tube station, which daily has big footfall because many people are going to the station and coming back past the post office.
In summary, local residents want the Crown branch in South Woodford to remain open. I ask the Post Office, through the Minister, to think again. We have spoken to a number of residents and local businesses and none of them, not one single one, wanted the post office to move. The complete unanimity was interesting. The response that we gave to the Post Office’s public consultation consisted of just under 2,000 signatures, which took us no time at all to gather—people were queuing up to sign our petition to keep the post office where it should be.
I have my concerns about the Post Office consultation process, however, because when we handed in the petition I realised that it was not in the slightest bit interested in consulting us on whether the branch should close. The consultation was solely about where the post office should move to, which in itself was a breach of trust of the local community. After all, the post office is a community asset; the Post Office management at least needs to put forward proposals and ask the community whether they agree that it needs to move. It was not until I badgered the Post Office again, writing twice to ask, “I hope this petition is being taken into consideration and that you are prepared to look at whether this post office should move again”, that it said that it had not at that point closed the door to further considerations. I therefore urge the Post Office to use this opportunity to ensure that the branch does not close.
I hope that the Minister will recognise that, as a political party and a Government, we have a responsibility beyond just letting organisations be run by people who have the sole idea that they need to break even. In reality, we have an investment and a vested interest in a post office system that works. More importantly, it should work not only as a stand-alone financial organisation but in support of the community. That is the most important part. We bleat a lot about high streets, but we do nothing when things such as local post offices disappear.
I have to say that this is the one thing that unites political parties on the Back Benches, the absence of that asset on the high street. It is high time for—I hope—the Minister to be very hard on the Post Office management. I do not understand why it has been so hopeless at finding ways to use post offices so that other services can be delivered at the same time, which would bring the Post Office extra revenue. Instead of being an organisation that seems to think that its job is to get rid of all its main customer-facing areas on the high street, it would turn into an organisation that was flexible, sensible and highly profitable. Furthermore, we have seen post offices in other countries do that. I therefore urge the Minister to do her level best to drive the Post Office management to common sense and allow us at least to retain our excellent Crown post office, which has served my community incredibly well for all these years.
I congratulate my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) on securing this important debate about the Post Office’s proposal to franchise its South Woodford branch. He clearly set out his concerns about the plans and about the local consultation process that the Post Office follows. He rightly recognises the crucial community role that post offices play throughout the country.
Between 2010 and 2018, the Government will have provided nearly £2 billion of taxpayers’ money to maintain, modernise and protect a network of at least 11,500 branches across the country. Contrary to the impression that I gained from my right hon. Friend’s remarks, far from closing branches and retreating the Post Office is acting in line with the manifesto commitments given in both 2015 and 2017: to protect the post office network in terms of the loss-making branches in rural and some poorer urban areas.
Today there are more than 11,600 post office branches across the country, and the network is at its most stable for decades. That is because the Post Office is transforming and modernising its network, thanks to investment from the taxpayer and to the hard work and dedication of Post Office staff throughout the country.
Government support has enabled the modernisation and transformation of more than 7,000 branches; more than 4,400 branches are now open on Sundays; and nearly 1 million additional opening hours per month have been added to the network through the modernisation programme. Financial losses reduced from more than £120 million to £24 million by 2015-16, which allowed the Government subsidy to be reduced by more than 60% from its peak in 2012.
That the network is at its most stable in a generation might be one of the reasons why customer satisfaction has remained consistently high. I understand that in my right hon. Friend’s constituency people have benefited from more than 200 additional opening hours per month, and at least one of their branches is now open on a Sunday.
I do not mean to take up much time, but I want to make the point that I made to the management: although they say that only by franchising can they have longer opening hours, there was never any reason why that could not happen in the existing post offices and Crown post offices. Longer opening hours is an illustration of something working right, but it could always have been done through the existing post office network—there was nothing to stop that.
One of the reasons why it is difficult to extend the opening hours in some Crown post office operations is that those branches are already making losses. Extending the hours has an additional cost—even if doing so was possible given existing staff working arrangements in the Crown post offices. There would without doubt have been additional costs, which might have worsened the losses of most of the Crown post offices, including the one we are discussing. Additional hours are open to question.
The Post Office is offering more to customers by having operations in retail premises that are used to working to a model of longer opening hours, including Sundays. That is more efficient for the taxpayer and ensures that post office services remain on our high streets throughout the country.
I fully appreciate that there can be disappointment and uncertainty in communities where a change to post office services is proposed. Those communities can hold strong views and concerns regarding any planned change, as witnessed by the petition mentioned by my right hon. Friend—[Interruption.]
Order. There is another Division, but this will be the final one.
Sitting suspended for a Division in the House.
By looking for a franchise partner in South Woodford, the Post Office seeks to ensure continued access to post office services for customers in the area in a way that is sustainable for the long term, keeping post offices on our high streets and in our communities.
My right hon. Friend’s community is not losing its post office service; it will be relocated to the convenience store operated by the proposed new partner, approximately 85 metres from the current location. I understand that the new partner plans to refurbish the premises, and that the Post Office will install a new modern post office in the convenience store. The Post Office recognises the importance of providing good access for all customers, including wide aisles and low-level counters for people with disabilities. It has high standards to ensure that, and that will remain the case in the new branch.
Working with a retail partner really is a sensible response to the challenges facing high street retailers. It has the benefit that overheads, including property and staff costs, can be shared across the combined post office and retail business. The host retailer also benefits from increased footfall and income from Post Office products. The vast majority—more than 97%—of post offices across the UK are operated by independent businesses and retail partners. Moving directly managed Crown post offices to retail partners has proved successful elsewhere and has helped to reduce losses in that part of the network from £45 million of taxpayers’ money per year as recently as four years ago to near break-even today.
Of course, the Post Office needs to continue to take steps to ensure that the network remains sustainable for the future, as it is doing in South Woodford. It does not propose such changes if it does not consider them necessary to secure the long-term sustainability of post office services in communities in my right hon. Friend’s constituency and across the country.
I know that my right hon. Friend has been disappointed by the consultation exercise. The Post Office welcomes and values feedback from customers, which is why it runs local consultation processes. He is absolutely right that such consultations are not designed to elicit views about whether Crown post offices should be franchised, but they generate a lot of data about how they should be franchised and about what services customers are particularly interested in, and the Post Office organises local customers’ forums when proposing relocation, as it did in his constituency.
I know that my right hon. Friend considers that the Post Office should consult on the decision to franchise the current branch before it consults on any potential new location, but it must be for the business to take such commercial decisions, within the parameters set by the Government, to ensure that we protect our valued national network. Post offices operate in a competitive retail environment, and we should allow the business to assess how best to respond to the challenges it faces and to secure post office services for communities for the future.
The Post Office consults, in line with its code of practice, on changes to the network, and that has been agreed with the consumer body. Citizens Advice recently reported that that process has become increasingly effective, and that in most cases improvements are agreed or reassurances provided in response to customer feedback received during the consultation process. That has happened after nine out of 10 of the Post Office’s similar consultations in the past year, demonstrating that the process is effective.
My right hon. Friend rightly mentioned the need for post offices to focus not just on reducing cost but on improving footfall by improving the quality and range of their services. He drew attention to the Cass business school report commissioned by the Communication Workers Union, which I commend for its efforts to assist Post Office to broaden its service offer. The state-backed post bank explored in that paper was actually assessed back in 2010, when the cost of instituting such a bank was put at approximately £2 billion. It was felt at the time that that money would be better invested in badly needed transformation and modernisation of the network, and that was the decision made.
The good news is that banking is now an increasing part of the Post Office’s offer. I am delighted to say that the Post Office announced today that it has secured a deal with Lloyds bank that will enable it to offer a banking service to small and medium-sized enterprises across the country. That service will meet 95% of SMEs’ banking requirements and 99% of retail banking requirements. That really is a step change. The Post Office is also a market leader in identity services; it now has a 40% share of that growing market.
I reassure my right hon. Friend that the Post Office is absolutely not resting on its laurels or just focusing on managing its cost base; it is actively seeking growth in the products and services that it offers. I commend Post Office’s management, and its workers and staff, on the great progress that they are making.
Question put and agreed to.
Education Funding: Wirral
I beg to move,
That this House has considered education funding in Wirral.
I am grateful to have obtained this debate about such a critical issue for my constituents ahead of the Chancellor’s crucial autumn Budget on 22 November. I trust that the Minister, who represents the Government, will listen to what I have to say and convey to the Chancellor as he deliberates on the content of his Budget the anxiety of so many people who are involved in education at all levels. The reality is that the overall funding pot for schools is too small. Whatever claims the Minister may make, the lived experience of my constituents—parents, teachers, support staff and pupils—is that school budgets are not enough to keep up with rising running costs. The consequences are huge pressures and deteriorating education opportunities for Wallasey’s kids.
In the 25 years that I have represented Wallasey in this place, I have paid regular visits to local schools and met many teachers, support staff, pupils and parents, and I have to tell the Minister that the warning lights are flashing. In all my time in Parliament, I have never heard expressed such wide-ranging concern about funding pressure as I hear now about the pressure that all Wallasey’s schools are experiencing. That pressure extends right across the Wirral. It came up forcefully during the general election, and the Government subsequently had to find extra funding. Although that is to be welcomed as a good start, it is not enough to alleviate existing pressures, and the Government’s decisions about how to distribute it disadvantaged further those who were already struggling from significant disadvantage.
This funding crisis hits the most vulnerable hardest. This crisis is happening now; schools in Wallasey are being forced now to cut back on staff, on the curriculum and on teaching materials. A National Audit Office report last year concluded that schools will need to reduce spending by an average of 8% per pupil by 2020. That would be the largest real-terms cut since the 1970s. School budgets have been cut by £2.8 billion since 2015 at a time of rising and additional costs, and schools are struggling to cope.
I very much endorse what my hon. Friend is saying about the crisis we are facing. Thanks to Feeding Birkenhead, Wirral adopted a policy of using its housing benefit data to identify those pupils who are eligible for free school meals and the pupil premium, resulting in another £750,000 for Wirral schools. However, despite that additional funding, which the council activated by using its IT sensibly, everything my hon. Friend says stands.
My right hon. Friend points out the layers of disadvantage that are often not taken into account by the Government’s distributive mechanisms. The proposed new national funding formula is one such mechanism, and it will do nothing to alleviate the crisis in Wirral schools.
What is particularly insulting is the Government’s persistent claim that the national funding formula is based on the principle of fairness and the frankly ludicrous claim that schools will see an increase in funding as a result of it. No one believes that there are no flaws in the current system—we all recognise that—but, rather than rectifying them, the new national funding formula simply creates new ones. It shifts an already inadequate sum of money from one area of the country to another, with some of the most deprived areas losing out. I do not know about the Minister, but that is not my definition of fairness.
I have no doubt that we will be told by the Minister about the additional £1.3 billion over two years announced in September by the Education Secretary. First, that is not new money but rather a sum that has been assumed to be available from unrealistic, so-called efficiency savings and cannibalised from other parts of the budget. Secondly, it will do little to compensate for the £2.8 billion of cuts schools have suffered since 2015. Ask any teacher in my constituency, or any school governor, and they will talk about the cutbacks that schools are already having to make as a result of the real-terms reductions in their budgets at a time of spiralling costs.
Lord Harris of Peckham, a Conservative party donor who runs a large academy chain, let the cat out of the bag recently. He said that the schools he runs are facing a 20% cut in funding by 2020 and that the Government should put more funding into schools. I agree with him.
I turn to the specific impact that the funding pressures are having on schools in the Wirral. As I mentioned at the outset, I have maintained a frequent dialogue with schools in my constituency throughout my time as an MP. Everyone I speak to tells me the same story: funding from the Government has failed to keep pace with running costs in schools. According to figures from the National Education Union, my constituency is set to lose an average of £149 per pupil in real terms between 2015-16 and 2019-20, with a total loss of 29 teachers. Wirral as a whole will lose on average £111 per pupil and 108 teachers.
The cuts come at a time of additional pressures on school budgets such as rises in national insurance contributions and pension contributions and, most recently, the apprentice levy. There are also growing demands on schools to offer social services support and family support and to deal with increasingly complex mental health issues. Meanwhile, cuts to local authority budgets have made matters even worse, because they have decimated the support that the local authority used to provide to our local schools.
Wirral Metropolitan Borough Council has lost £150 million since 2010 and is set to lose a further £132 million by 2020-21. That amounts to a 40% cut in its budget. As a consequence, local authority support for schools has been cut drastically. In Wirral, cuts to the education services grant have left the council with a £1 million shortfall. That grant funds areas such as mental health support, fire safety and the maintenance of school buildings and playing fields. Likewise, social services and family support have been decimated by the huge cuts to local authority budgets. To make up for the shortfall, the council will have to absorb it into its already shrinking budget, cut services or force schools to pay up themselves, heaping more pressure on their already stretched finances.
Adrian Whitely, headteacher at The Mosslands School in my constituency, told me about the impact of funding cuts on his school. His quote is worth reading out in full, and I do so with his permission. He says:
“Five years ago, The Mosslands School, an 11-to-19 boys school with approximately 1000 pupils on roll, had 79 teaching staff and 18 teaching assistants. Due to budget reduction and rises in running costs, today it has 60 teachers and 8 teaching assistants. Average class size has risen with the majority of pupils now taught in classes of over 30. Over 40% of its pupils are entitled to free school meals at some stage; 26% of the students are identified as having additional special education needs; the number of children meeting the threshold for social services intervention has doubled in 24 months; and there are a further 20 pupils who are in the care of a Local Authority. It is a popular school and was deemed to be a good school when it was inspected last year. This year, it had to make a further 6 redundancies to balance its budget. This clearly cannot continue.”
Cuts such as those cannot simply be dismissed by the Government as efficiency savings. I note that the Government are increasingly fond of claiming, despite all the evidence to the contrary, that the cuts are actually increases. I intend to deal with that argument in detail a little later in my speech, but the fact is that the cuts are having a tangible effect on the breadth and standard of education that schools in Wallasey can provide.
I recently visited Birkenhead Sixth Form College, which as its name suggests sits just outside Wallasey in the constituency of my right hon. Friend the Member for Birkenhead (Frank Field), but it is attended by many of my constituents. In advance of the meeting, the principal, Mike Kilbride, wrote to me to outline the funding shortage faced by the college. He stated:
“At Birkenhead Sixth Form College we currently educate over 1,300 young people and passionately believe that every student deserves a first class education. Unfortunately, funding cuts and cost increases are making this increasingly difficult to provide. In the last year we have had to make many tough decisions including the withdrawal of some provision.”
Birkenhead Sixth Form College has had to reduce its curriculum in areas such as performance art and music. Perhaps the Government believe that such subjects are surplus to requirements, but I believe they are an integral part of a well-rounded education. The UK performs particularly well in music and the arts, and that success earns the country worldwide recognition and plenty of economic benefits. Those benefits are being put in jeopardy by short-sighted policies.
One headteacher of another school told me that funding for special educational needs children was becoming a cause for concern. There are statistically a high number of special needs pupils in the Wirral, and many of those needs are very complex. Many pupils have needs that require one-to-one attention from teachers with specific expertise. The funding that schools receive per SEN child does not always provide for that. The headteacher said that SEN funding “disappears in an instant”.
The vast majority of school spending goes on staff. With pay progression, the best teachers receive pay rises and older teachers tend to be paid more. However, as one headteacher pointed out to me, the national funding system takes no account of that. Schools are therefore struggling to fund pay increases as well as significant increases in national insurance contributions. One headteacher told me that
“teachers are teaching bigger and bigger classes”.
Not only does that create more work in the classroom; it also leads to more marking and more admin, and it is putting a bigger strain on them.
As figures from the National Education Union reveal, the pattern of funding cuts is being replicated in schools all over Wallasey and the Wirral. Most worryingly of all, some of the most deprived areas are being hit the hardest. To be clear, the figures I use take 2015 as their base year and reveal that, despite the Government’s attempted sleight of hand with what they like to call new money for schools, the funding given to schools has been cut by 4.6% overall between 2015 and 2020.
I will now deal with how that reality affects schools in Wallasey. The Oldershaw Academy, a school where 64% of pupils are on free school meals, is set to lose £233,000 in total by 2020, or £455 per pupil. St Mary’s Catholic College, where 53% of pupils are on free school meals, will lose £224,000, the equivalent of £186 per pupil. Primary schools in Wallasey are also being hit, and small schools, which can least afford to absorb huge funding reductions, are among the worst affected. Kingsway Primary School, where 53% of pupils receive free school meals, will see a real-terms cut of 19% per pupil. Eastway Primary School, where 52% of pupils are on free school meals, will see a cut of 10%.
As I outlined earlier, these figures do not tell the full story. They are accompanied by rising costs and additional sources of expenditure, such as the apprenticeship levy and national insurance contributions. There have been numerous press reports of state schools asking parents for donations to keep their school afloat—a double disadvantage for those schools that serve poor communities, where the parents simply cannot afford to fork out the extra money that schools now routinely ask for.
Many parts of Wallasey and the Wirral have high levels of deprivation. In Wallasey, a total of 41% of pupils are in receipt of free school meals, but we will lose £149 of funding per pupil by 2020. I do not call that an increase, even if the Minister is going to claim in his reply that it is. By contrast, the constituency of Bournemouth East will gain £36 per pupil, despite only having 19% of pupils on free school meals. North East Hampshire will see a small gain, despite only having 10% of pupils on free school meals. How can the Minister possibly justify that?
Another of the Government’s flagship education policies is multi-academy trusts, which have implications for, and give rise to questions about, funding and accountability. In June this year, just after the general election, the Government took the decision to close the Kingsway Academy in Leasowe, in my constituency. The school will close on a phased basis by the end of the 2017-18 academic year, and many pupils have already been forced to move on to neighbouring schools. The school, formerly known as the Wallasey School, has a long and proud history, and provided an education for pupils in Wirral for generations. It is astonishing that the multi-academy trust, the Northern Schools Trust, was allowed to walk away as soon as it became clear that it could no longer turn a profit, just three years after taking over the school. That was after it had summarily closed down the sixth form a couple of years ago, leaving 80 pupils high and dry.
I cannot stress enough how much anxiety the announcement caused parents, pupils and staff when it appeared out of the blue just four weeks before the end of the academic year, but that was par for the course with the Northern Schools Trust. The decision was taken behind everyone’s back and the local community was kept in the dark throughout the process. As soon as I heard rumours of the school’s closure, I asked the Minister to meet me. By the time he had agreed to do so, he had already taken the decision to close the school. I believe that the episode exposed a worrying lack of transparency and accountability at the heart of the Government’s policy on multi-academy trusts. Had Kingsway been a maintained school, it would have been obliged to conduct a 12 to 18-month consultation, involving parents, trade unions and the local community, before a closure; yet there is no such obligation on academies to consult.
When we look at the list of income allocated to schools, we find that the only school in Wallasey that has had an increase, at £524 per pupil, and a 9% uplift in its funding, was the Kingsway Academy, which is now being closed. The Northern Schools Trust essentially announced closure within four weeks, having left council officials, unions and other stakeholders in the dark. The multi-academy trust seems to be free to walk away from the school, leaving the local authority to pick up the pieces, with the future of pupils’ education left in the balance.
The lack of accountability was highlighted in the Education Committee’s report on multi-academy trusts, published in February this year. With a multi-academy trust, the accountability is transferred from local governing boards to a central trustee board that holds the decision-making responsibilities. The report noted:
“We were told by parents that MATs are not sufficiently accountable to their local community and they feel disconnected from decision making at trustee board level. There is too much emphasis on ‘upward’ accountability and not enough on local engagement.”
The report went on to recommend:
“MATs should demonstrate a sincere commitment to outreach and engagement with the local community.”
In my experience, they are a long way from doing so. That is certainly advice that the Northern Schools Trust should have heeded during the Kingsway debacle.
Multi-academy trusts are recipients of huge amounts of public money, but they do not seem to be subject to the same standards of accountability. When school budgets are being squeezed as they are, and when schools are having to reduce staff numbers and are struggling to purchase equipment, is it right for MATs to pay their chief executive officers an annual salary of £160,000, as the Northern Schools Trust does? If multi-academy trusts were an unrivalled success, there might be at least a case for it, but when they are allowed to take over a school, fail to turn it around and walk away with no public consultation and little in the way of repercussions, the Government should ask themselves whether the policy is acceptable.
I have no doubt that the Minister has come armed with the Government’s own figures, giving the impression that Wirral schools will receive funding increases as part of the new national funding formula. After all, he has been going round claiming that cash increases are actually real increases, and hoping that nobody would notice the huge rise in running costs that all schools have to cope with, which more than wipe out any of the so-called gains for which the Minister is spuriously claiming credit. If the claim of increases were remotely true, does the Minister imagine that Wallasey’s headteachers, staff, parents and pupils would be complaining so much about the funding pressures that are causing them to cut back on the curriculum, sack teachers and increase class sizes?
Let us take a moment to interrogate these figures before the Minister brandishes them about in his reply. The Government’s figures show that in 2018-19, Wirral schools will receive, on average, a 1.6% increase in cash terms. Government figures also show that they will then receive a further 0.8% cash-terms increase in 2019-20. Schools in my own constituency in Wallasey will receive a 1.5% cash-terms increase—slightly less than the average for Wirral—in the first year, and an additional 0.6% the following year. Again, that is slightly below average. I note, however, that revealing ministerial phrase, “cash terms”. It does not take an economic genius to work out that, with inflation running close to 3%, that amounts to a significant real-terms cut.
The Government’s wilful and convenient confusion between a cash-terms and real-terms increase is only part of the story. The Minister’s figures show modest cash-terms rises from 2017-18, using that year as a baseline. By choosing that baseline, the Government are entirely and deliberately ignoring the cuts that took place before that—cuts that even as I speak are already being felt in classrooms across the country. That is pretty shoddy, but there is even more bad practice to come. The Minister’s figures also overlook the additional pressures on school budgets that I outlined earlier: the apprenticeship levy, national insurance contributions, pension contributions, any increases in staff pay, loss of education services provided by local authorities and any additional help on issues such as mental health and social services support, which used to be provided by local authorities but have now been decimated by the swingeing cuts this Government have made to local authority budgets.
Despite this accumulation of budget cuts and cost increases, the Government insist on perpetuating the ridiculous and false claim that schools are actually receiving more money. I suppose they are, but only in the most meaningless, technical sense. Actually, they are not really. I hope that the Minister will be reasonable enough to not treat us to another bout of that nonsense. How can he claim that schools are getting more money when they are sacking staff, increasing class sizes and cutting subjects from the curriculum? Frankly, Ministers are living in a parallel universe if they think that their farcical claims bear any relation to the situation confronting headteachers and staff on the ground, where the effects of austerity are being felt in classrooms all over Wallasey and all over Wirral.
I encourage the Minister to visit the schools in my constituency and across the Wirral to observe the real-terms cuts that schools are having to make, and the very real consequences that those cuts are having on our schools’ capacity to provide an outstanding education for all. Perhaps he may then see the error of his ways and realise that he has to persuade the Chancellor to put our children first and finally agree to the real-terms increases needed to give the next generation the educational chances they really deserve.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Wallasey (Ms Eagle) on securing this important debate.
According to the Government’s own figures, funding for schools in Wirral under the new formula will rise from £194.7 million in 2017-18 to £197.8 million in 2018-19, and then £199.3 million in 2019-20. Funding in Wirral in 2019-20 is scheduled to be 2.4% higher than in 2017-18. However, the average national increase for that period is 3.2%, so it is clear, even from the Government’s own figures, that Wirral is set to miss out.
Figures from the National Education Union tell a different story, showing that funding for schools in Wirral is to fall by nearly £4.8 million between 2015-16 and 2019-20, and revealing a loss in per-pupil funding of 2%—£111 per pupil. It predicts that, as a result, schools in Wirral will lose more than 100 teachers overall. It has also pointed out that school cuts have not been reversed, and that the vast majority of schools will have less money per pupil next year and in 2020 than when the Government took office in 2015. As a former schoolteacher college lecturer myself, the quality of education we provide to our young people is a subject very close to my heart. I know only too well, from first-hand experience, what happens when schools struggle with cuts by Conservative Governments, because, of course, we have been here before.
The loss of 100 teachers from Wirral schools will have huge implications for pupils and teachers. Cuts are likely to lead to increased class sizes, the loss of subject choice and curriculum areas—especially in the arts, which are so important to ensure the development of a rounded education—and increased pressure on the remaining staff, who will have to teach the same number of pupils. All of that matters because education is vital to the development of the next generation and to the future of our country, and I believe there really can be no shortcuts. The National Education Union has said that high-needs, early years and post-16 education have suffered the biggest cuts and are not being fairly funded.
Headteachers of schools in my constituency have told me that they face a real challenge in supporting children with special educational needs. In one school, Fender Primary School, 39% of pupils have special educational needs, compared with the national average of 13.5% for primary schools, while more than 50% of its pupils are eligible for free school meals. That presents particular challenges, but the school’s most recent Ofsted report noted that
“The school’s commitment to ensuring all pupils equally succeed is strong. All pupils achieve well, and some outstandingly so, including disabled pupils and those with special educational needs.”
I pay tribute to the school’s staff, its pupils and their parents. The report also said:
“The headteacher has high ambitions for pupils’ personal development and academic achievement”,
and that she is “driving improvements”. High levels of support are important for children with special educational needs, whether provided by teachers or classrooms assistants, who of course can often be very highly qualified.
In some cases in which a child is experiencing special difficulties, one-to-one support may be necessary; for other pupils, smaller class sizes may be sufficient. It can take considerable time for an education, health and care plan for a pupil to be approved. During that time, schools have to fund that extra support themselves and are not compensated for it, even though some pupils may actually have moved to another school by the time the plan is in place. In 2017-18, 145 pupils out of 244 at Fender Primary School qualified for the pupil premium. It is clear that extra funding, whether through the pupil premium or SEN funding, is vital.
Fender Primary School works hard for the community it serves. It remains open for four weeks in summer and all of Easter to support the families of its children in a range of ways that go beyond the purely educational, such as emergency food parcels and furniture for families who need it. However, despite the clear high level of need, according to the School Cuts website, Fender Primary School is predicted to lose £109,500 per year by 2020—amounting to £452 per pupil and the loss of two teachers. I will be grateful if the Minister sets out what action he will take to ensure that Fender Primary School and others like it get the funding they need, particularly for SEN, and what he will do to drop the planned cuts to Wirral’s schools as a whole.
Staff in schools across Wirral show immense dedication to their pupils. One such school, which works with children in their early years, which we all know are so important for everything that happens in the rest of their lives, is Ganneys Meadow Nursery School. Around 20% of the children there have special educational needs and/or a disability, including autism, epilepsy or mobility problems. The families of a number of the children are on low incomes, and some children may be quite vulnerable. The Ofsted report published this month judged it “outstanding” in every respect, and said of the children:
“Their joy at being at Ganneys Meadow is evident from the moment they walk through the door with happy, smiley faces.”
Ganneys Meadow’s chair of governors even voluntarily teaches GCSE maths to mothers, such is the level of commitment at the school. However, like many other maintained nursery schools, it is under extreme financial pressure. We all know how important the early years are, and it is essential that the Government give the sector the funding it needs to give children the very best start in life; the Government should match the immense dedication shown by teachers by giving them the funding needed.
Post-16 education has also received severe cuts. In his March Budget, the Chancellor announced an extra £500 million a year in funding for technical education reforms. Wirral Metropolitan College, which sits in the constituency of my right hon. Friend the Member for Birkenhead (Frank Field), has provided technical education for people in Wirral for more than 160 years, but it, too, has been hit hard by a severe squeeze in funding, like so many colleges. The National Education Union’s website reports that funding for 16 to 19-year-olds fell by 14 % in real terms between 2010-11 and 2014-15. The Government announced in November 2015 that 16-to-19 funding would be protected in cash terms between 2016 and 2020. However, taking inflation into account, that is still likely to mean a real-terms cut of around 8%.
There is also the introduction of adult loans. Since their introduction in 2013-14 for students aged 24 and above, and their extension to 19 to 23-year-olds in 2016-17, 58% of the total budget—£910 million—has been left unspent, according to the Student Loans Company. In other words, people have not been taking out loans. I used to work in a further education college, and although the sector can often be overlooked, it has to be recognised just how hugely important these colleges are for people as they progress from their school years through to their workplace—particularly for people who may have struggled during their time at school, due to something happening in their family, such as a bereavement, or because they were ill. It is a massively important sector, and the Government should look at it very closely.
Wirral Met serves a diverse population in Wirral, including many people from deprived backgrounds, who may be less likely to take out loans because they are already at higher risk of being in debt, which the head of the Financial Conduct Authority recently stressed as an issue. There has also been a fall of nearly 40% in the number of levels 3 and 4 learners since the loans were introduced, which the then Department for Business, Innovation and Skills actually predicted back in 2012. I will be grateful if the Minister outlines his plans to address the clearly detrimental impact that cuts to post-16 education and the introduction of loans is having on the education and training of young people in Wirral.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Wallasey (Ms Eagle) on securing this very timely debate on funding in the Wirral and on her excellent speech. It appears that both her and her sister, my hon. Friend the Member for Garston and Halewood (Maria Eagle), have impeccable timing when it comes to winning Westminster Hall debates.
My hon. Friend the Member for Wallasey rightly spoke about the Government’s sleight of hand in announcing further funding for education to appease their Back Benchers that never seems to materialise, and we have no idea where it comes from. As she said, it is not enough to alleviate current pressures, and the most vulnerable are the hardest hit. In the Wirral alone, the figures are stark: £5.1 million is being taken out of the system by 2020, which equates to 108 teachers.
Just last week, hundreds of teachers and school leaders descended on Westminster to do what is their democratic right: to lobby this place and the Government on school funding. Unfortunately, the Minister took a different view and took the opportunity to label those parents, teachers, school leaders and trade unionists as scaremongers. He has the opportunity today to apologise for using that language to ordinary working people who have come to this place to exercise their democratic right by protesting about school budgets being cut up and down the land.
Let us assess the facts. As my hon. Friend the Member for Wallasey said, £2.8 billion has been taken out of the schools budget. That means 88% of schools still face real-terms budget cuts per pupil. For the average primary school, there will be a loss of around £50,000 a year. For the average secondary school, it will be a loss of £178,000 a year. It gets worse. As Members have outlined, the primary schools with the neediest intake are set to lose £324 per pupil, per year, while the least needy primary schools will lose £116 per pupil, per year. For the secondary schools with the neediest intake, the figure is £343 per pupil, per year, while the least needy secondary schools lose £62 per pupil, per year. That certainly does not sound like scaremongering to me.
There may be more money going into education than ever before, as the Minister will point out—that is the Government’s mantra—but that is because of the simple mathematics: there are more children in schools than ever before. Both my hon. Friend the Member for Wallasey and my hon. Friend the Member for Wirral West (Margaret Greenwood) made the point that the Minister will come back to us by talking about increases in cash terms, but that does not take into account inflation, the apprenticeship levy, changes to national insurance and all the other pressures currently placed on schools.
As my hon. Friend the Member for Wallasey pointed out, there are more and more cases of multi-academy trusts siphoning money out of the education system—another issue that the Secretary of State and the Minister are failing to acknowledge. My hon. Friend mentioned the disaster that happened in the Wirral with the Northern Schools Trust. We saw a few weeks ago a multi-academy trust collapsing in Wakefield, affecting a whole city and 21 schools, on this Minister’s watch. It does terrible reputational damage to Government when that type of thing happens. As The Guardian pointed out, there is now an investigation into that trust, with hundreds of thousands of pounds allegedly siphoned off before it collapsed and walked away from the children of Wakefield.
The fact is that the £1.3 billion of additional funding announced by the Secretary of State is nowhere near enough to reverse the £2.8 billion in cuts that schools have suffered since 2015. We also know that none of the money announced so far is actually new money for education. I take this opportunity to ask the Minister again—I have asked in writing and in this place before, and I will do it again—whether he will confirm, in the interests of transparency and accountability, where the cuts to funding in the Department for Education budget will fall in order to fill the black hole that the Secretary of State has created.
As has been eloquently outlined, the overall level of education funding is totally inadequate and is resulting in devastating cuts to our schools, sixth forms and colleges as we speak. When will the Minister wake up to the fact that the Government need to invest more so that our children’s education is not sacrificed? The impact of these real-terms cuts in school funding are there for all to see. It means that schools are having to cut subjects and children are being taught in supersize classes, as my hon. Friend the Member for Wirral West pointed out.
Schools are cutting staffing, and we have a crisis in teacher recruitment and retention. Since 2011, a third of teachers who have trained have left the profession. We have 24,000 unqualified teachers working in our state schools and reductions in support for vulnerable children. Schools are once more beginning to crumble, and teachers are even having to pay out of their own pocket for supplies, let alone what is happening to our special educational needs system, where children’s needs are not being met. We have a crisis in our schools that the Minister is simply not willing to acknowledge.
Our key education unions—“the scaremongers”, as the Minister likes to refer to them, or the “truth-sayers”, as I prefer to call them—have set out five tests of what is required of a new fair funding settlement for schools to ensure that the education of our children and young people does not continue to suffer. The fact is that the Minister has failed on every one of them. School cuts have not been reversed; 88% of schools still face real-terms budget cuts per pupil. There is no new money in the education budget, and we are yet to discover where cuts will be made to fill the funding shortfall. High needs, early years and post-16 education will not, as promised, be fairly funded under the proposed new formula.
The Minister has made no long-term funding commitments, so schools are still in limbo. What happens beyond 2020? When can our schools expect the information they need about longer-term funding so that they can plan their budgets effectively? Yet again, historic underfunding of schools is not being addressed. We have teachers leaving the profession in record numbers, more than half a million students now crammed in supersized classes and there are more than 24,000 unqualified teachers, as I just pointed out. If I were still a teacher, I would not be able to say that the Minister has managed a passing grade.
While I of course support the principle that all schools should receive fair funding, the answer is not to take money away from existing schools and redistribute it when budgets all across the country are being cut. A fair approach would be to apply the lessons from schools in the best-performing areas in the country everywhere. It would look objectively at the level of funding required to deliver in the best-performing schools, particularly in areas of high deprivation, and use that as the basis for a formula to be applied across the whole country.
Goodness knows, we have had enough Westminster Hall debates over the last few months where Members from every area of the country have expressed concerns about school funding cuts in their area. When will the Secretary of State and the Minister remove their heads from the sand and begin to truly hear the voices of schools, teachers and parents across the country? If they do not do that soon, it is our children’s education in the Wirral and right across the country that will continue to lose out.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Wallasey (Ms Eagle) on securing the debate and on her excellent speech.
I am delighted to be able to address this issue at a time when the Government have recently announced the outcome of our consultation on the national funding formula—an historic and necessary reform that will, for the first time, distribute funding on the individual needs and characteristics of every school in the country. This Government believe that all children should have an education that unlocks their potential and allows them to go as far as their talents and hard work will take them.
We are making significant progress. More schools than ever before are rated good or outstanding by Ofsted, and 1.8 million more children are in good or outstanding schools today compared with 2010, including 90% of schools in the Wirral. The attainment gap between poorer children and their wealthier peers is closing; it has not closed totally. We have launched 12 opportunity areas to drive improvements in parts of the country that we know need to and can do better.
Those improvements have been made against a backdrop of an unfair and arbitrary funding system. Similar schools across the country get markedly different levels of funding for no good reason and resources are not reaching the schools that need it most. The funding system has acted as a barrier to improvement, when we need it to be a support. That is why we are delivering on our promise to reform the unfair, opaque and outdated school and high needs funding system, and introducing a national funding formula.
A prime way in which the Government have tried to direct resources to the poorest pupils, sometimes to schools in the poorest areas, has been through the pupil premium. As I said in my intervention on my hon. Friend the Member for Wallasey (Ms Eagle), the data from housing benefit will be lost as universal credit is being rolled out. I ask the Minister to take away the idea, and talk with the Department for Work and Pensions, so that the data that is in universal credit will be made available on housing circumstances to councils, so that they can automatically offer registration for the school premium and free school dinners.
The right hon. Gentleman raises an important point. All these issues are being considered as we move to universal credit, to ensure that children who need to be funded through the pupil premium continue to be funded.
Will the Minister take the issue away and, when he has consulted his colleagues in the other Department, write to me please?
I am happy to write to the right hon. Gentleman, but these issues are being considered as we speak.
Given the significance of this reform, it was vital that we took into account as many views as possible, and the consultation process generated over 26,000 individual responses and responses from representative organisations, and we considered all of those views. The existing system is out of date. It is based on data and decisions from over a decade ago. Funding for each area has been determined by simply rolling forward the previous years’ allocation, adjusting only for changes in the total number of pupils in each area and ignoring all the other changes.
I have read some of the right hon. Gentleman’s responses to other debates like this and he spends a great deal of time not responding to the actual questions that have been raised, by telling us in great technical detail about what the national funding formula is meant to do. Will he address some of the issues that I raised about the unfairness of Kingsway Primary School, which has 53% of pupils on free school meals, having a 19% cut in its funding, under the system that he is praising? How can that kind of result possibly be right or fair?
If the hon. Lady will be patient, I will come to each of those issues and specifically talk about the funding position of Kingsway Primary School, among the other schools that she mentioned, but I want to put this debate in the context of the reality of the situation that we are seeking to address.
When the proportion of secondary school pupils eligible for free school meals in London fell by more than 5% between 2007 and 2017, more than 25 times the decline nationally, the funding system did not respond to that change in the wealth level of London as the capital city. Addressing these damaging inequalities in the current system represents the biggest improvement in the school funding system for a decade, and from April 2018 we will introduce a national funding formula, which will, for the first time, put the funding system firmly on track to deliver resources on a consistent and transparent basis to every school in the country.
In September we published full details of the school and high needs national funding formula and the impact that it will have for every local authority. We have also published notional school-level allocations showing what each school would attract through the formula. This means that for the first time everyone can see what the national funding formula will mean for them and understand why. Alongside addressing these historical injustices, the importance of ensuring stability for all schools was also a consistent message throughout the consultation process. In recognition of that, over the next two years local authorities will continue to set their own local formula in consultation with the schools in their areas, which will determine each individual school’s budget. This will provide a small but important element of flexibility for local authorities, to allow them to respond to the changes as they come through.
School funding, as the hon. Member for Wallasey acknowledged, is at a record high because of the choices we have made to protect and increase school funding, even as we faced difficult decisions elsewhere, across Whitehall, to restore our country’s finances, and to address the historic budget deficit that we inherited in 2010. We understand that just like other public services, schools are facing cost pressures, and in recognition of this we announced in July an additional £1.3 billion for schools and high needs across 2018-19 and 2019-20—over and above the funding confirmed at the 2015 spending review. This additional funding means that the total schools budget will increase by over 6% between this year and 2019-20. As the independent Institute for Fiscal Studies has confirmed, that will mean that funding per pupil for schools and high needs will now be maintained in real terms for the remaining two years of the spending review.
Will the right hon. Gentleman give way?
I will give way briefly, but I want to come in a moment to Kingsway.
The right hon. Gentleman is taking as his baseline this financial year, yet there have been real terms cuts in schools for the last two years, as I thought I had explained, so he is trying to claim that there has been an increase, when in fact he is discounting the cuts that have already happened. He knows that it is not an accurate way of talking about what happened. Why doesn’t he just admit it?
There have been no cuts in funding to schools. There have been cost pressures, as I have acknowledged time and time again, that schools have absorbed, as have other parts of the public sector and parts of the private sector. There have been cost pressures of higher taxes, higher employer’s national insurance contributions and higher employer’s contribution to the teachers’ pension scheme, because we believe it is right that teachers’ pensions are properly funded, but I am telling the hon. Lady and this House that spending will rise in real terms on a per pupil basis.
I will now come to the issue she raised about her schools. As a consequence of the consultation process, we introduced a de minimis funding level for the very lowest funded schools. We introduced a de minimis funding level of £4,800 per pupil for the very lowest funded secondary schools in the country. St Mary’s College in the hon. Lady’s constituency received £5,625 per pupil, and that will rise by 1% to £5,680 according to the national funding formula. The national average under the national funding formula for a secondary school is £5,389. On top of that, the school will also receive £935 per pupil for every pupil who qualifies or has ever qualified for free school meals over the past six years.
Will the Minister clarify which school he is talking about?
I am sorry. I am talking about St Mary’s Catholic College in the constituency of the hon. Member for Wallasey. That school’s funding per pupil will rise from £5,625 to £5,680.
We also introduced a de minimis figure of £3,500 per pupil for the very lowest funded primary schools. Kingsway Primary School receives £5,376 per pupil, and that figure will rise to £5,422. On top of that, the school will receive £1,320 per pupil for every pupil who has ever qualified in the past six years for free school meals. The hon. Lady referred to 53% of pupils as qualifying at some point for free school meals—all those pupils will bring the school an additional £1,320 on top of the £5,376.
Kingsway Primary School will face a cut of £39,400 by 2020. That is £233 per pupil. It has already lost one teacher.
No, it is not receiving any cuts in funding at all. Its funding will increase from £5,376 per pupil to £5,422 per pupil. That is an increase of 0.8%. It is an increase in funding, not a cut. I acknowledge there are cost pressures facing schools, but to go around saying that schools have had their funding cut is simply not true. If I can refer to Eastway Primary School—
They have had it cut.
They have not had their funding cut.
In real terms, they have had it cut.
Eastway Primary School is having its funding increased from £4,495 per pupil to £4,604 per pupil—an increase in funding of 2.5%. On top of that, it will receive £1,320 for every child eligible for free school meals—on top of the £4,604.
Will the Minister give way on Eastway Primary School?
I will not give way again because we are running out of time. The hon. Gentleman seeks to cite the National Education Union’s schools cuts campaigning website, which says that schools are facing a cut in funding. Schools are not facing a cut in funding. Every single school across this country will get an increase in funding.
Will the Minister give way?
No, I will not give way. I have only four minutes left. Every school in this country will see an increase in funding to it.
A £101,000 cut—
The hon. Gentleman cannot cite a website that claims there are cuts in funding when every school in this country will receive an increase in funding. There are costs that schools face, whether those be national insurance in 2015-16 or pension contributions, and there will be salary increases to pay in the future, but those are cost pressures that are being incurred right across the system.
I have put the record straight on these matters so that we can have an honest debate about the issues. Opposition Members would acknowledge that every school, including those in the constituencies of the hon. Member for Wallasey and the hon. Member for Wirral West (Margaret Greenwood), who cited Fender Primary School, will, like that school, see its funding increase. There is no cut in funding to Fender Primary School. The funding will rise from £4,649 per pupil to £4,690 per pupil.
Will the Minister give way on Fender Primary School?
I will not give way. [Interruption.]
Order. I remind Angela Eagle that she does have a minute or so at the end to wind up, so she has an opportunity
There is no cut in funding at Fender Primary School. The funding will increase, on top of which it will receive £1,320 per pupil in pupil premium.
We will also be able to go further than our manifesto commitment that no school would lose funding as a result of the national funding formula. Now, every school in the country will attract at least 0.5% more per pupil in 2018-19 and 1% more per pupil in 2019-20. Thirty five of the 111 schools in the Wirral will attract funding increases as a result of this decision to raise the funding floor, but all schools in Wirral will see an increase in their funding over the next two years.
Our formula will also rightly result in a significant boost directed towards the schools that are currently the least well-funded. I have said that the formula will provide for all secondary schools to have a de minimis per pupil funding of £4,820 in 2019-20 and for primary schools to have £3,500. My consultation confirmed the importance of funding for additional needs such as deprivation and low prior attainment. The consultation found that those factors were the best way to identify the children most likely to fall behind and to remain behind their peers. It is only right that we provide the greatest resources to the schools that are educating the greatest numbers of those children. In the Wirral, more students on average face these additional barriers, with greater than average percentages of children eligible for free school meals and living in the most deprived areas. Nationally, the formula will allocate £5.9 billion to additional needs funding and will distribute that funding more fairly. We have also protected the high needs budget, and there will be an increase in high needs spending in the Wirral.
In view of time, I will just say that for this Government, social mobility and education are a priority. The additional funding that we have announced, together with the introduction of a national funding formula, will provide schools with the investment that they need to offer a world-class education to every child in the country.
The Minister is living in a parallel universe. He says that schools are getting increases. Kingsway Primary School is going to lose £131,306—a 19% fall in what it would have expected—and three teachers. St Mary’s College will lose £223,778—a 3% fall in funding—and four teachers. Fender Primary School, in the constituency of my hon. Friend the Member for Wirral West (Margaret Greenwood), will lose £109,000 on what it could have expected by 2020—that is £452 per pupil—and two teachers. If the Minister insists on calling those “increases”, I do not think that he is fit to be in the job that he is in.
Question put and agreed to.
That this House has considered education funding in Wirral.