Tuesday 16 January 2018
[Nadine Dorries in the Chair]
Junk Food Advertising and Childhood Obesity
I beg to move,
That this House has considered the effect of junk food advertising on obesity in children.
It is a pleasure to serve under your chairmanship, Ms Dorries, for what I think is the first time. I thank colleagues across all parties for supporting my bid for this debate to the Backbench Business Committee, and I thank the Backbench Business Committee for understanding the importance of junk food advertising and its impact on childhood obesity and for granting this debate.
If hon. Members will excuse the pun, the size of the issue is getting bigger. Some 23% of children in reception are overweight or obese, rising to 34% of children in year 6, and the prevalence is higher for boys than girls in both age groups. Over the last 30 years, there has been a substantial increase in average weight in the UK and, at the same time, a decline in the quality of diets. It is predicted that if current trends continue, half of all children will be obese or overweight by 2020, which is just two years away.
Obese children are about five times more likely to remain obese in adulthood, so acting early can protect them from a lifetime of avoidable ill-health and disease. Obesity can lead to a number of serious and potentially life-threatening conditions, such as type 2 diabetes, heart disease and cancer. Recently, cases of type 2 diabetes have been reported in teenagers, although until now it has been recognised as a disease of older age. Obesity costs the national health service an estimated £5.1 billion and the UK economy £27 billion each year, so it is of the utmost economic importance that the obesity epidemic is addressed. I fear that those costs are grossly underestimated.
Obesity is strongly linked to socioeconomic deprivation. Findings from the most recent national child measurement programme show that inequalities in obesity prevalence between the most and least deprived quintiles of children in reception are widening faster than expected. Obesity is also twice as prevalent among children living in the most deprived parts of England than among those in the least, and patterns are similar across Scotland and Wales. That reflects the fact that families from lower socioeconomic backgrounds across the UK have the poorest diets, high in saturated fat and low in fruit, vegetable and fibre consumption.
Research also shows that the poorest UK households are exposed to twice as many television food adverts than the most affluent viewers. That exposure is problematic. Food advertising in the UK disproportionately features unhealthy food items, and young children are especially vulnerable to marketing techniques that promote unhealthy food. The pervasive harms of adverts place untold pressures on the poorest in society. Children with low nutritional knowledge are more likely than those with higher literacy to select unhealthy meals after seeing junk food adverts. Junk food marketing exacerbates health inequalities, especially among very young children and adolescents.
Over the last couple of years, there has been much focus on the impact of sugar on children’s health and the growing problem of obesity. However, we must not lose sight of the role that foods high in fats and salt play in the epidemic of obesity sweeping our nation. I am sure that Jamie Oliver’s visualisation of the amount of sugar in fizzy drinks in teaspoons helped the public to understand the issue, but we need to go further. The salt content of processed food has decreased over the past decade, mainly as a result of successful campaigning, and it is now common to find low-fat alternatives on supermarket shelves, but there is more still to do. As we focus our minds on trying to rid ourselves of those few extra pounds we mysteriously gained over the festive season, it is the right time to focus the Government’s mind on continuing measures to continue to tackle the obesity epidemic.
I congratulate the hon. Lady on securing this debate, and she is making a powerful contribution about the scale of the crisis. Prevention is clearly more important than cure, but given where we are now, does she acknowledge that we also need to focus on cure? Does she share my concern that too few clinical commissioning groups are commissioning tier 3 services, which can make positive interventions to support seriously obese children?
I agree completely. We need to consider prevention, cure and treatment. It is a huge problem, and it will not go away unless we tackle every aspect of it. The hon. Gentleman makes a good point.
The debate in Parliament on the impact of junk food, by which I mean food high in fats, salt and sugar, is not new. I talked to somebody just last week who gave me the insight that we have been discussing it for getting on for 15 years—probably more than that, if we backtrack even further—and we still do not have the courage to ban the advertising of products with such a major impact on the health of our nation and our future generations.
Recently, the Select Committee on Health held an inquiry and produced a report, “Childhood obesity—brave and bold action”, followed up in a short report early last year. Both reports contained a strong call for a ban on junk food advertising before the 9 o’clock watershed, yet that was sadly missing from the Government publication “Childhood obesity: a plan for action”, introduced in August 2016.
I am delighted that new rules on advertising were introduced by the Committee of Advertising Practice in July 2017—their impact is still being analysed. The rules banned the advertising in children’s media of food or drink products high in fat, salt or sugar. The restrictions now apply across all non-broadcast media, including print, cinema, online and social media, but that does not solve the problem. In 2015, Public Health England recommended extending current restrictions to apply across the full range of programmes that children are likely to watch, rather than limiting them to children-specific programming. Yes, restrictions apply to advertising high fat, salt and sugar products during prime time, but only when the audience is made up of 20% children or more.
A recent study commissioned by the Obesity Health Alliance found that 59% of food and drink adverts shown during family viewing time would be banned from children’s TV, yet hundreds of thousands of children are exposed to them every week. In the worst-case example, children were bombarded with nine adverts for products high in fat, salt and sugar in one 30-minute period. Adverts for fast food and takeaways appeared more than twice as often as any other type of food and drink advert, while adverts for fruit and vegetables made up just over 1% of food and drink adverts shown during family viewing times. The study also showed that the number of children watching TV peaks between 7 pm and 8 pm, definitely not when children-only programmes are shown.
Although I recognise that advertising restrictions in the UK on high fat, salt or sugar products are among the toughest in the world, we need to be even tougher. The childhood obesity plan published by the Government in August 2016 states that it is only the start of the conversation. This debate aims to help continue that conversation and focus on other measures that the Government can take to stop and reverse the obesity epidemic.
I congratulate the hon. Lady on securing this debate, which is similar to one that I secured six years ago in Westminster Hall. The situation has worsened considerably in that time. Does she agree that the plan that she just elaborated on needs action points from the Government along the lines that she has intimated? We need outcome targets so that the next generation of children will see a significant improvement, rather than the deterioration in the current generation.
I congratulate my hon. Friend on securing this debate. I am sure she will agree that the obesity problem is growing and that measures to tackle it have been wholly inadequate. As with smoking, when we know something is harmful, we need a step change in measures to deal with it. An out-and-out ban on advertising—other hon. Members may comment on that—and a consideration of how we could severely restrict how high fat, salt and sugar foods and drinks are sold may be ways to take the strategy forward.
My hon. Friend is right—his background makes him an expert in the field—that no one measure will solve the problem. The Health Committee has called for “bold and brave action”, but we are a long way from seeing that.
No one measure will successfully tackle childhood or adult obesity. It is more than just sugar—many different aspects of food are causing the obesity epidemic. The soft drinks industry levy will play its part, as will Public Health England’s message, which was well publicised over Christmas and new year, that children should have only two snacks a day. Tackling junk food advertising is an important part of the jigsaw.
When the sugar tax was introduced, Vimto, which has its headquarters in my constituency, would have avoided it on 60% of its products because they were already sugar free. That figure is now 100% because industry growth has been led by the fact that 70% of demand is for sugar-free drinks. In contrast, £200 million was taken from the public health budget in 2015-16, £85 million was taken in 2016-17, and 3.9% will be taken each year up to 2020. In some respects, the industry and the public are ahead of the Government.
There has been a step change in the industry. It has realised that if it does not take steps itself, more punitive measures may be imposed. Hopefully, debates such as this one will help the industry and other corporate bodies to take responsibility, which is a good way to address the issue.
It is well recognised that children and young people are particularly vulnerable to junk food advertising. Evidence shows a link between advertising and the types of food that that group prefer to buy and eat. Restrictions to advertising in or around programmes specifically made for children were introduced 10 years ago, but no Government since have made any effort to update the broadcast rules, despite widespread recognition of the health harms of junk food advertising. Anybody watching “Newsnight” last night will have seen that advertisers are finding ways to circumvent the rules, which is not what rules are there for.
By applying broadcast restrictions only to children’s programming, the pattern of TV viewing by children today is not taken into account.
The hon. Lady makes a powerful case about advertising. Evidence suggests that children as young as 18 months old can recognise branded products, so it has a significant and pernicious impact on very young children. Many people may not expect that. Does she agree that the rules need to be extended, not just for broadcast to ensure that they affect family viewing time, but to online advertising as well?
I completely agree. Some of the new restrictions imposed by the Committee of Advertising Practice in July aimed to do that, so that whatever method a child is viewing by, whether it is gaming or whatever, it is controlled. At a meeting just before Christmas, the committee said that it had still not been able to analyse the impact of the restrictions. Hopefully, in a few months’ time, we will get some feedback as to whether they are working or not—let us hope that they are.
Children are viewing TV—and lots of other media, as the hon. Lady said—in different ways, so we are calling for that to be taken into consideration to ensure that legislation is up to date. The rules are outdated and we urgently need an update to reflect changing viewing patterns.
We could debate whether restrictions on advertising are the responsibility of the Department of Health and Social Care or of the Department for Digital, Culture, Media and Sport, but ultimately we are discussing the health of our future generations. The Department of Health and Social Care should grasp that responsibility and make a difference.
The soft drinks industry levy, which has received a tremendous amount of attention, is a matter for the Treasury, but it appeared in the childhood obesity plan published by the then Department of Health in August 2016. There is no reason why introducing advertising restrictions for the sake of our nation’s health should be deemed to be under the DCMS remit.
The Minister indicated to me that it was too early to have this debate as he may not be able to give any concrete answers, but it is never too early to have a debate on an issue that affects our children’s health. “Childhood obesity: a plan for action” states that it is just the “start of a conversation”. It would be wrong of us, as parliamentarians, not to take every opportunity to continue that conversation. I hope that this debate influences the next stages of the measures to tackle childhood and adult obesity.
We have passed the stage of assuming that the implementation of further restrictions to the advertising of food and drinks high in fats, salt and sugar is part of a nanny state. There is now consensus across the House that responsibility and duty of care needs to be shown to our children and young people through bold and brave actions that will have an impact not only on future generations but on people today.
Before I finish, I have two more thoughts to throw into the mix. First, we should be mindful that there must be an element of personal and parental responsibility. Secondly, it is not a coincidence of scheduling that these adverts run alongside some of our biggest TV shows, such as the “The X Factor”, “Britain’s Got Talent”, “I’m a Celebrity”, “Hollyoaks” and “The Simpsons”. If we are to truly effect change, we need some of that star magic, as Jamie Oliver demonstrated.
The power of celebrity cannot be underestimated. With that in mind, I call on household names such as Simon Cowell, Ant and Dec, Dermot O’Leary and Amanda Holden to take some corporate responsibility, stand up to broadcasters and say that they will no longer be used as a hook to sell harmful junk food to our children and theirs.
My hon. Friend has made excellent points throughout her speech. Certain sports teams and events are sponsored by junk food advertising and companies such as KFC. In that context, corporate responsibility is important, but do the Government need to look at banning such advertising, as they did with tobacco advertising in Formula 1 many years ago?
As ever, my hon. Friend makes a good point. Everybody has responsibility: the Government have responsibility for their legislation and how it is implemented, and there is corporate responsibility.
Finally, perhaps we will start to see organic change from within the industry itself, rather than needing the Minister to formally effect change through regulation. That is the most effective way to get the change that we need, as we have seen with the reformulation that is going on already. If the industry gets the message loud and clear, it can do it on its own terms rather than being forced into it.
I echo the points made by the hon. Member for Erewash (Maggie Throup) and by my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) in her intervention.
The effect of diet on children’s health is a serious and substantial problem facing our country. If unchecked, poor diet could undermine the health of millions of children. I believe that it risks setting back the historic advances made in children’s health in recent decades, including since world war two.
Child ill health is such a significant problem. It is notable in my constituency, where there is a higher than average rate of child obesity, and there are also significant differences in life expectancy between different parts of the constituency. That is in a relatively typical town in the south-east of England.
Other issues related to health inequality include a growth in the consumption of unhealthy food, which is a particular challenge to families, who are struggling with this issue. Better information and less pressure on parents and children could make a significant difference, as was mentioned earlier.
It is my experience that parents are inundated—I do not say that word lightly—with advertising material on a very wide range of media. Messages about fast and unhealthy food are everywhere—on television, on billboards, on takeaway hoardings, on shopfronts, in newspapers, and in shops and supermarkets when people are purchasing food. They are literally everywhere in my constituency. In contrast, factual information from the NHS or from responsible manufacturers is scarce and hard to find.
I commend those manufacturers and retailers who have taken steps in that regard. My hon. Friend the Member for St Helens North (Conor McGinn) mentioned a company in his constituency and there are many others. I believe that the Co-op shops have a very effective system of colour-coded labelling, warning of the problems of high levels of salt and sugar, and many other retailers and manufacturers are trying that system. I commend them for their efforts in supporting what should be a national effort to help families on this matter. I hope that the industry will do more to promote that approach and that it will work with parents, schools, the NHS, and central and local Government.
However, the contrast between advertising and sensible advice is enormous. To put it in simple terms, a child or parent in my constituency is likely to see junk food advertising when they get up on TV before they go to school, on the way to school, when they come home from school and in the evening. That is simply an overwhelming set of messages that drives people in one direction. Sadly, the messages in the other direction are tiny in comparison and there is limited public money to support them, as was mentioned earlier.
That all adds up to something that is really quite substantial, and in addition we have to take into account the fact that families have also been under the severe pressure of rising food bills. We should take into account the additional problem that many people face, as their incomes have fallen in real terms in recent years, particularly since 2010, while food prices have gone up substantially —I think it may be by 3% at the moment.
Taking all that into account—the power of advertising, the substantial imbalance in information and the pressure on family budgets—I believe that action is urgently needed and I ask hon. Members to support the motion today and call on the Government to listen to this debate, to understand and acknowledge the serious concerns that are being raised, and to take—as was said earlier—bold and brave action to address this issue.
I congratulate my hon. Friend the Member for Erewash (Maggie Throup) on an excellent speech.
Our thinking on this issue has been somewhat muddled in the past, and I encourage the Government to be bold as they work to improve their child obesity strategy further. There is a huge public interest here. As taxpayers, we all have to support the NHS; something like 10% of the budget of NHS England is involved with obesity-related issues, whether that is type 2 diabetes or a range of other health conditions caused by obesity. So every one of us, as taxpayers, has an interest in this issue.
It is also an issue of social justice, in that—unlike at any other time throughout history, really—it is now the poorest children who are the most overweight. We have flipped what has happened throughout history, when it used to be the poor who were thin and emaciated, and the better-off who were plump and well fed. We cannot allow an unemployable underclass to grow up—children who are obese, who go on into adult life being obese and have a low self-image and low self-confidence, who then struggle to get work as a result, and who have a low income or are on benefits. We are talking about the loss of a lifetime of opportunity if we do not grasp this issue, so it really matters.
It is serious. Lord Patel, who chaired the House of Lords Committee on the future sustainability of health and social care, told the—[Interruption.]
Thank you, Ms Dorries. Lord Patel told the Commons Health Committee on 24 October last year that the United Kingdom had the second worst obesity problem in the world, after the United States of America. I want to see action on a range of issues. Credit where credit is due—the sugary drinks levy has been successful, but the Government are now measuring nine types of food. We look forward eagerly to the release of that data in March this year. If we have established the principle with sugary drinks, there is no reason why we should not extend that approach to other foods, so that it will lead in the main part to reformulation, as the hon. Member for Sheffield Central (Paul Blomfield) said earlier.
I had a good meeting with Kellogg’s a couple of weeks ago. It is making serious efforts to make their breakfast cereals have much less sugar, so there is movement in the right direction, and by extending the framework of the sugary drinks levy to other foods, we could encourage that process further, which would be helpful.
If the Government are worried that there will be devastation in the food and drinks industry, they should take heart from what happened in Thailand. We know from a recent study by the University of Bangkok what happened when Popeye was featured a lot on television in Thailand. Of course, Popeye—as we all know from our own childhoods—ate lots of spinach and one particular television programme showed children developing fantastic muscles through eating lots of spinach. Those children who watched lots of Popeye programmes doubled their intake of spinach and other green vegetables. So, if some food and drinks manufacturers end up making less harmful foods, perhaps we will see an increase in the healthy and nutritious part of our food industry, which we all want to encourage and we all want to see have a great future in this country.
Like my hon. Friend the Member for Erewash, I do not think that only one measure is the solution to this problem. I welcome the specific focus of this debate on ramping down advertising to children, but there is a whole range of measures we can take, including clear food and drink labelling. The traffic light system labels should be on all food in our supermarkets. They are clear and easy to understand; the public can understand them. Also, when we go into a restaurant, why not make the number of calories in what we are ordering available? That would give people information.
We could do so much more in planning. I would like to see health as an objective in planning policy, and to see local authorities having the ability to turn down planning permission for unhealthy fast food outlets right next to schools. We cannot beat the food industry over the head and then allow a proliferation of shops selling unhealthy food right next to our schools. We need to be measured, we need to be fair and we need to have a policy that applies across government.
I would like the Minister to get on an aeroplane and go over to Amsterdam. I am extremely grateful to the Centre for Social Justice for drawing our attention to the Amsterdam healthy weight programme. The Minister looks as if he has not had that much foreign travel, so perhaps we can get him on a plane to Amsterdam before too long. It would not be a jolly; it would be a very serious piece of work. We do not need a pilot or to try a few things here or there, to see what works. We have four years of hard data from the Netherlands, showing that if there is a city-wide approach, led by political leaders, progress can be made. In Amsterdam between 2013 and today there has been a 12% reduction in the number of obese children across the board and an 18% reduction in obesity among the most deprived children. Mayor Eric van der Burg has shown that with political will, a ban on advertisements of fast and junk food in every metro station in Amsterdam, consideration of the built environment, and consideration of health in every policy, progress can be made.
I have raised the matter with Simon Stevens in the Health Committee, and I raise it now in the presence of the Minister: let us see action. We do not need to reinvent the wheel; a model just the other side of the channel has delivered results and we need to replicate that here.
We need to support our health professionals as well. There is an initiative called “make every contact count”, in which every clinician—at the GP surgery or in hospital—is supposed to talk about healthy lifestyles and weight at every opportunity but, in reality, it rarely happens, as they are overworked and time-pressured. Nevertheless, we need to hold firm to that, and to help GPs have sensible and sensitive conversations, recognising that people may find it a difficult and sensitive subject. It is not about embarrassing or upsetting anyone. I am lucky to be able to eat like a horse and look like a rake, but I recognise that not everyone is like that. This is a challenge; many environmental factors make it difficult for many families.
We need to encourage our schools to do the right thing. I pay tribute to Ardley Hill Academy and Linslade School in my constituency. They both have a fantastic graphic on the wall of different types of drink, showing the number of sugar lumps in each. The bottle of water at the end has, of course, none. What an amazing graphic.
My hon. Friend has made some excellent points. Will he give credit to the many schools across the country, including in west Cornwall, that do the daily mile? Every child does 15 minutes’ exercise or walks a mile every day. He is right to encourage schools, but it must be soul-destroying for teachers to go home and see TV advertising undoing their good work.
I could not be more grateful to my hon. Friend. He is absolutely right. The daily mile started at St Ninians School in Stirling in Scotland, and it is a fantastic initiative. If children cannot run, they can walk it. They do not have to bring in special gear. The teachers do it as well, and the health benefits have been phenomenal. The headteacher has said that pupils all look like rosy-cheeked children from the 1950s. Colds and sniffles have disappeared from the school, virtually no one sees the school nurse, and obesity and weight problems have come right down. My hon. Friend has mentioned another fantastic example of a whole-community approach, and that is the approach I encourage the Government to take when they come up with their new plans in March.
It is a pleasure to speak in the debate, Ms Dorries. I congratulate the hon. Member for Erewash (Maggie Throup) on setting the scene so very well and giving us the chance to participate.
As a type 2 diabetic, I have had to learn to have a new lifestyle. I used to have a takeaway almost every night, and two bottles of coke on top. Add stress to that, and all of a sudden I was 17 stone. I am pleased that I am now keeping my weight down to about 13 stone. What is important to say is that I knew there was something wrong but did not realise what. If only I had known that the symptoms were diabetes-related. When I was diagnosed some 11 years ago, food management was important but it would have been more important 10 or 15 years before that, when my lifestyle was grossly affecting my health. I say that as an adult who does not want his grandchildren, Katie and Mia, to be in the same position, with a preventable life-changing illness.
I commend my hon. Friend the Member for East Londonderry (Mr Campbell) for his Westminster Hall debate on childhood obesity way back in November 2011. Even at that stage changes were afoot. I suppose the question today, six years later is: have they made a difference? I want to give some Northern Ireland stats. The Northern Ireland Department of Health’s “Health Survey (NI): First Results 2016/17” highlighted something that was not so much a shock as a disappointment: about 75% of children aged two to 15 were classed as either normal weight or underweight. That is interesting. At the same time, 17% were classed as overweight and 8% as obese. Over the last decade, the proportions of children classed as overweight or obese have remained at similar levels. Although some might consider that a victory, I would say it is a disappointment, because we should be trying to lower the figures. To have 8% of children classified as obese does not bode well for the ticking time bomb of diabetes. More clearly needs to be done.
I will give some detail about what we are doing back home to show why it is important to be on top of the matter. I recently met constituents who were part of a pilot programme that used social media and games to address healthy eating with children and parents. There has been discussion of funding for permanent schemes since the successful pilot but, as usual, funding is hard to source. Before I left the hotel this morning, I saw on TV children exercising in a school—in London, I think—with Gabby Logan as part of the backroom team. The children did not seem to be doing a lot of exercise, but it was enough to make a difference at that age. There are a number of schemes across the United Kingdom of Great Britain and Northern Ireland, and we, in this place, must determine to have schemes like that one back home, setting aside funding to train children, and also to re-train their parents.
Schools in Northern Ireland have attempted to bite the bullet, as it were—if I may use a pun for us in Northern Ireland—with schemes that allow children to come in early and have their breakfast at a subsidised cost. They have also altered school meals so that they are healthier options and have implemented school rules under which only water and fruit are allowed at break-times. We have a scheme in Northern Ireland—my hon. Friend can probably confirm this—whereby up to 100,000 portions go out to schools. That might not seem a terrible lot, but it is when compared with the population and the number of children we have.
I congratulate the schools on attempting to do everything in their power, but the fact remains that something must be done to help parents understand how their choices affect children. If children are eating healthily—eating their wee bit of fruit—it is terrible if mum and dad, and I say this with respect, are tucking into pizza, chips and a bottle of coke. They must set an example in the home; it is not for the children alone to eat healthily. If children are asked whether they prefer a chocolate bar or a piece of fruit, the vast majority opt for the unhealthy snack. That is fine in moderation, but the fact is that people do not give their children snacks in moderation, and we need to help to change that.
The so-called sugar tax has undoubtedly helped. I welcome what the Government have done and I supported the legislation as it went through Parliament but, as was mentioned in an intervention and as I have stated before, we need to address fat and salt as well. Some of my colleagues, friends and others in the House might say that the nanny state is not what we want, but I very much believe that we sometimes need it to enforce what is best for people. Chocolate bars are made smaller to keep the prices down, which is great, as the bars obviously contain fewer calories. We have implemented packaging requirements that ensure that products clearly show how much fat and calories are in them, and that is great as well. Well done to Tesco for allowing children to eat a piece of fruit as their mothers shop, but are three-for-two offers on junk food wise when someone sets out to buy only one but wants a bargain? Yes McDonald’s is fine as a treat, and well done to the company for allowing healthier options in “happy meals”, but it is not great if people have them on a regular basis.
It all comes back to the message: all things in moderation. All those initiatives are great, but they are not doing the job quickly enough. Under the smoking initiative, we have greatly monitored and lessened the amount and form of advertising, and that needs to be done for junk food with equal pursuit, zeal and enthusiasm. I am happy to swallow the accusation of a nanny state if it means that my grandchildren and other children are healthy, happy and content with their fruit at school and with their wholemeal bread and balanced diet, along with the occasional treat. We should not deprive them of their treats, but we must ensure that treats are not an everyday occurrence.
A better way of handling advertising would help parents to teach their children balance without the children feeling hard done by, or different from what they see on TV. We must do all we can—I must do all I can—for the future of our children and grandchildren in the hope that the lessons will also impact on how adults eat and live their lives. The nation as a whole will benefit. I look to the Minister for the comprehensive response we always get from him. I have already apologised to you, Mrs Dorries, the Minister and the shadow Minister, but I have to leave for a meeting with a Minister.
It is a pleasure to serve under your chairmanship, Mrs Dorries. I congratulate my hon. Friend the Member for Erewash (Maggie Throup) on securing this important debate. Childhood obesity is a stubborn problem in Scotland. Some 29% of Scottish children are at risk of being overweight or obese, and that figure has remained static since 1998. While recent years have seen a welcome decline in childhood obesity from 17% in 2014 to 14% in 2016, that figure is still no better than 20 years ago. As other Members have mentioned, obesity increases someone’s chances of developing heart disease and type 2 diabetes, among other conditions.
Every child deserves the healthiest possible start to life, so it is vital that the UK Government and the Scottish Government continue to work across every channel to reduce childhood obesity. They should not simply tinker at the side lines, but introduce a number of radical reforms to extend life chances, reduce the pressure on the health service and create a healthier society overall. Our childhood obesity problem has many causes, and there are many things that the Government can do to help address it. One is the curtailing of the advertisement of unhealthy food in environments where children are likely to encounter it. Evidence shows that children’s exposure to food advertisements can have a major influence on a child’s diet and therefore their weight. Cutting their exposure to advertisements for unhealthy food is therefore a vital tool in the fight against childhood obesity.
I am pleased by the tough line already being taken on junk food advertisements. The total ban on advertising less healthy food during children’s TV programmes or on children’s TV channels is a common-sense restriction. None the less, TV is not everything. Children are spending less and less time watching TV and more and more time on the internet.
We are talking about TV, and we have heard a lot about advertising, but it is important to look at what happens between the adverts: the programming. Some 18 months ago, ITV launched a very good initiative called “I am Team GB”, where it switched off the channel for an hour. Some 2,500 sports clubs across the UK opened their doors and more than 4 million people were motivated to take part in sport. Research shows that food-related programming promoting a healthy lifestyle has as much if not more of an impact than advertising. In issuing charters, it is important that the Government also regulate that programming so that we see a joined-up approach with good programming that promotes healthy living.
I completely agree with the hon. Gentleman. We need a collaborative approach, and not just one reform needs to take place.
Internet usage overtook TV viewing among children for the first time in 2016. As we know, advertising can be more tailored than ever. Custom-made adverts are being beamed relentlessly at easily influenced children, which is without a doubt having the desired effect for those who promote such adverts. It is therefore time for a shift in focus. The battle to ensure that children are exposed as little as possible to unhealthy food advertisements must move from TV to other arenas, especially online. Although that is more difficult, it is no excuse to sit back. That is why I am pleased that, as of June, the ban on advertisements for unhealthy food targeted at children, or featuring cartoon characters, was extended from TV to print, cinemas and online, including social media sites. The new rules are not big new onerous regulations, but simply a matter of ensuring that our existing level of regulation keeps up with the changing nature of children’s entertainment.
I would like many other adaptations to the way in which we educate our young people, and advertise and market to them. For example, as a young person enters a supermarket, they are flooded with sugary deals at the doorway. They have the difficult choice between a chocolate bar or a costlier fruit pot at the snack counter, and they are encouraged to integrate a sugary treat into daily lunches through meal deals. There are endless promotions in the confectionary aisle, but few similar incentives within fruit and vegetable sections. Our retailers are some of the best marketeers in the country and hold some responsibility to act on this national crisis.
I strongly believe that the classroom must provide food education as many children do not have access to that in the home. It is not a tick-box exercise. Lifelong skills with nutrition and cooking nutritious food will in turn support the education of young people so that they consume sugar and other unhealthy foods in moderation, feeding their bodies with the fuel they need, not the fuel they want. For example, home economics is a crucial subject in secondary schools. Initiatives that primary schools partake in, such as school allotments and farm visits, are undoubtedly having the correct impact. Children with sporting aspirations quickly learn what their bodies require to perform, and the encouragement of school sports and hobbies will also play a part in education and the ability to resist junk food advertisements. As a nation we grow a wide variety of nutritional produce, and having been brought up on a farm, I fully appreciate how important it is that we support our British farming industry.
In summary, as the years go on we must remain extremely vigilant to ensure that regulations continue to keep pace with the changing habits of our young people and the environments they are exposed to daily. The problem will not disappear and could escalate at an alarming rate. Advertising affects obesity, so it is crucial for the health of our future generations and our health service that we continue to reduce children’s exposure to advertisements for unhealthy food—whether that is on TV, online, or in person just prior to making a purchase—as well as educating people from a young age about the array of wonderful healthy produce grown on their doorstep.
I congratulate colleagues on their excellent speeches so far. As has been said, we have a childhood obesity epidemic in this country. One in three children is overweight or obese by the time they leave primary school. That makes them five times more likely to become obese adults, putting them at risk of the biggest preventable cause of cancer after smoking. This debate was triggered by calls from the Obesity Health Alliance in relation to the campaign linking obesity with cancer, but as we know, type 2 diabetes, heart disease and many other conditions are related to being overweight.
Some interesting research was done a while ago—I did not have time to dig it out—on what happened when young offenders in young offenders institutions were switched from junk food and fast food diets to healthy eating. The change that had for their mental health and behavioural conditions such as attention deficit hyperactivity disorder and aggression certainly needs to be part of the Government’s considerations. A comprehensive 10-year study of children from 100 different countries looked at the links between fast food, asthma and allergies in childhood. I asked the Government whether the public health responsibility deal partners could be part of a discussion on that study, but I was told that the focus at that time was on salt. They were dealing with the low-hanging fruit; it is quite easy to address salty food, but addressing people’s addiction to fast food is far more difficult.
Marketing has a critical influence on children’s behaviour. As Public Health England has said, it constantly influences preference and food choice. Food companies promoting crisps, confectionary and sugary drinks spent £143 million on advertising in 2016. By comparison, the Government spent just over £5 million on their anti-obesity Change4Life social marketing campaign. Those figures show what we are up against and the power of the junk food advertising industry.
It is a decade since Ofcom’s broadcast restrictions on junk food advertising to children came into effect, and they do not go far enough. As has been said, children’s viewing habits have changed dramatically. They do not just watch children’s TV; they also watch family shows, particularly such things as “The Voice” or “Strictly”, or reality shows, where they are regularly exposed to junk food advertising. Research commissioned by the Obesity Health Alliance found that children see as many as 12 adverts for junk food an hour while watching family television shows. I support the calls for a ban on junk food advertising until after the 9 pm watershed. That is supported by 76% of the public and 71% of MPs according to the Obesity Health Alliance. The issue does not need legislation—the Health Secretary could instruct Ofcom to act now, and I am interested to hear what the Minister has to say on that.
As the hon. Member for South West Bedfordshire (Andrew Selous) flagged up in his excellent speech, it is not just advertising that creates an obesogenic environment for children. Walking past outlets selling high-fat, high-salt, high-sugar foods every day can set back efforts to encourage healthy eating. There is no point having all these programmes in schools to encourage children to be more active and to teach them what a healthy diet looks like if they are walking past a McDonald’s on their way to and from school and probably during lunchtime as well, if they are able to pop out.
I do not think that I did pay tribute to McDonald’s; I was highlighting McDonald’s as a cause for concern. I am sure that its representatives will be in touch after the debate to tell me that it offers salads, but I am not sure how many secondary school children pop into McDonald’s after school for a salad. I think there was an experiment in Hulme in Manchester where they thought that teaching people about cooking, buying local food and sourcing it in their local community was too large a first step. In a bid to encourage people to eat more healthily, they therefore set up a fast food outlet that was devoted to healthy food. I do not know how that has gone—I think it was a year or two ago—but it shows that it can be done.
Data provided to The Guardian by the Centre for Diet and Activity Research at the University of Cambridge showed that more than 400 schools across England have 20 or more fast food takeaways within a 400-metre radius, while a further 1,400 have between 10 and 19 outlets within the same distance. In my constituency—I apologise; I am going to have a bit of a go at McDonald’s again—we had an application for a new 24-hour drive-through McDonald’s within 800 metres of three schools, and only just over 400 metres from another. As a council, we tried to reject that planning application, partly because of the traffic, litter and noise concerns associated with a 24-hour drive-through. The application also went against advice issued by Public Health England in its March 2014 briefing, titled “Obesity and the environment: regulating the growth of fast food outlets”, which stated that an important function of local authorities is
“to modify the environment so that it does not promote sedentary behaviour or provide easy access to energy-dense food.”
Despite that, the Government’s Planning Inspectorate overruled the council and granted permission for the drive-through to go ahead.
About 20 English councils, including Bristol, have rules banning new fast food outlets from opening within 400 metres or 800 metres of schools—in Bristol it is 400 metres. The Mayor of London recently announced a total ban on new fast food outlets within 400 metres of schools across the capital. However, I agree with the likes of Brighton and Hove City Council that 800 metres, which I think is only a 10-minute walk or so, would be better. It is not in the childhood obesity plan, and the Government need to do more to encourage that.
The sugar tax has been discussed. Children in the UK consume up to three times the maximum amount of sugar that they should, and fizzy drinks are their No. 1 source. We know that there was a real battle to get the levy to where it is now, and it took a long time to get it introduced. It is good that it is forcing manufacturers to reformulate their drinks to come in below the sugar tax threshold, but I am concerned about what will happen to the £10 million that was pledged from the levy to fund school breakfast clubs. It is good that companies are responding, but it is really important that we support our breakfast clubs as well, and I would like to hear from the Minister on that.
I want to say a little about school food standards. For many children from low-income families, school meals provide their main source of nutrition for the day. I would not be surprised if the Labour spokesperson, my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), has something to say about that. She has recently run an excellent campaign about changes to universal credit that would have an impact on the number of children receiving free school meals—their main source of healthy food. Legislation introduced by the last Labour Government required all schools to comply with specific food-based and nutrient-based standards, which resulted in significant improvements in the nutritional quality of school food, as shown by research from the Children’s Food Trust.
The July 2013 school food plan sets out 17 actions to transform what children eat in schools and how they learn about food. That has helped, and the new school food standards were widely welcomed when they came into force in January 2015. I was concerned that those standards do not apply to academies and free schools that opened between September 2010 and June 2014, but I received a response to a written parliamentary question yesterday, which said that more than 1,400 academies founded during that period are voluntarily following the standards. I am not sure how many are therefore not following those standards, which I think should apply across all schools.
I would like to ask the Minister about something that I have been doing on an ongoing basis. The Government have the “eatwell plate”, which is meant to set out guidance for what a healthy diet looks like, with certain proportions according to dietary needs. Rather than just being a paper exercise which can be found on the Government’s website, that ought to be used as the norm for how we publicly provide food, in not just schools, but hospitals, prisons and other facilities. Now is neither the time nor the place to go into other issues about cancer-causing foods, but given the proven link between processed meat and cancers such as bowel cancer, for example, the fact that at the moment schools are told to provide red meat three times a week and processed meat once a week needs to be looked at.
In conclusion, it is all very well talking about trying to change people’s behaviour and responses to the stimuli around them, but the Government could do more to remove temptation from their path. The Government should extend existing regulations to ban junk food advertising until the 9 pm watershed. They should support local authorities, and ideally have a standard approach across the country to tackling the proliferation of fast food outlets near schools—ideally the enforcement of an 800-metre limit. They should also do more to encourage schools to provide healthy food to students.
I, too, thank and pay tribute to the hon. Member for Erewash (Maggie Throup) for introducing this important debate. I thank all hon. Members for their thoughtful and knowledgeable contributions.
Today’s debate has drawn attention to the serious problem of childhood obesity, the link with junk food advertising, and the fact that a variety of steps are open to us that importantly would reduce the impact of that advertising. One step that many hon. Members have focused on, to which I can give my wholehearted support, is a more general ban on junk food TV advertising prior to the 9 pm watershed. To me, it seems to be an open-and-shut case. We already have some restrictions in place, so broadening their application is really just unfinished business, or seeing them through to their logical conclusion.
Hon. Members have highlighted some of the stark facts, including the link between obesity and 13 types of cancer, type 2 diabetes, mental health problems and heart disease. We have also heard of the extent of the challenge we face. It is as difficult a challenge and, in some respects, even more difficult in Scotland compared with other parts of the UK. The Scottish health survey identified in 2016 that 65% of adults and, as the hon. Member for Angus (Kirstene Hair) highlighted, 29% of children were overweight or obese. Public awareness remains low, with only a quarter of Scottish adults knowing that being overweight can cause cancer. Every year, excess weight is estimated to cost NHS Scotland up to £600 million. At least one other hon. Member alluded to the £5.1 billion figure, which is the equivalent figure for the whole of the UK.
The hon. Members for South West Bedfordshire (Andrew Selous) and for Erewash highlighted the impact on health inequalities. Again, the pattern is similar in Scotland, with 22% of children from the least deprived quintile overweight or obese. That compares to 27% from the most deprived, and a staggering 41% from the second-most deprived quintile. The hon. Member for Erewash rightly pointed out that even that trend can be linked with different TV viewing patterns.
In short, I cannot see how we can possibly avoid concluding that there is a significant link between junk food TV advertising and childhood obesity, and it is good that no hon. Member has sought to do that today. In a sense, the advertising’s very existence proves it. Who would repeatedly invest huge sums of money in advertising if it did not lead to increased consumption? There is a wealth of evidence worldwide to prove the fact, from the American Psychological Association, to studies from Deakin University in Australia. The most recent contribution, by Cancer Research UK, further confirms that children who are exposed to junk food advertising on television eat more unhealthily than those who are not.
TV advertising works, and that is exactly why so much money is spent on it. It is also why Ofcom’s broadcast restrictions on junk food advertising came into effect 10 years ago following, as I understand it, a report commissioned by the Government Office for Science, which identified that same link. Further action by the Government is now necessary, and the restrictions need to be extended to content that is considered family viewing, such as soaps, game shows and those programmes broadcast before the watershed—the generic TV that fills a lot of time between coming home from school and bedtime. The hon. Members for Erewash and for Bristol East (Kerry McCarthy) set out in great detail why that loophole must be closed, especially given the different patterns of TV viewing that are now prevalent.
Good work on tackling childhood obesity is going on across the UK. The UK Government action plan on childhood obesity published last January was a welcome step in the right direction, and we have also welcomed the sugar tax. In Scotland, we have seen new restrictions on the promotion of unhealthy food as part of the Scottish Government’s new diet and obesity strategy.
As hon. Members have said, there is no one measure that is going to fix the problem. We have heard a huge range of very good ideas today, including action on school meals, the daily mile, labelling, sponsorship, TV programming, education and even lessons we can learn from countries as far and wide as the Netherlands and Thailand. They are all good ideas, but as a minimum start, let us support all the good work that is going on with further restrictions on the advertising of junk food on TV. At the end of the day, our children will thank us one day if we do, but too many of them will pay a drastic price if we do not.
It is a pleasure to serve under your chairmanship, Ms Dorries. I thank the hon. Member for Erewash (Maggie Throup) for securing this important debate, and for sharing her knowledge in her passionate speech. I also thank the other hon. Members who have spoken this morning for their eloquent speeches: my hon. Friend the Member for Reading East (Matt Rodda), the hon. Members for South West Bedfordshire (Andrew Selous), for Strangford (Jim Shannon) and for Angus (Kirstene Hair), my hon. Friend the Member for Bristol East (Kerry McCarthy) and the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), who spoke for the Scottish National party.
The UK has one of the worst obesity rates in Europe, with almost two in every three people either overweight or obese. I am, as hon. Members can see, one of those two. I am back on a strict diet post-new year, with no sugar or alcohol for the foreseeable future—if any hon. Members see me with either or both in my hand, please take them off me—and I hope that by August there will be a lot less of me.
I commend the honesty of the hon. Member for Strangford. I have been on a similar journey to him healthwise, and I hope to share his success weightwise. It is hard though—if it were easy, nobody would be overweight. We have not all got metabolisms as good as a horse, as the hon. Member for South West Bedfordshire attests to. However, I started life as a skinny kid and was a slim teenager. I am proud to say that I was a size 10 when I got married, but I still ended up overweight as time went by. Therefore, I worry greatly when I see the stats, as I know we all do, for this country’s children.
As we have heard this morning, a pattern now emerges at a very early age. In 2016-17, almost a quarter of reception children aged between three and four were overweight or obese. In the same year, for pupils in year 6, it was more than a third. An obese child is five times more likely to grow up into an obese adult. I did not start as an obese child, and hon. Members can see where I got to, so it is important that the Government do all they can to ensure that child obesity rates are reduced as a matter of urgency.
As we know, obesity is linked with several health issues: lung and liver disease, heart attacks, strokes, seven or more types of cancer, and type 2 diabetes, all of which could be prevented with healthy eating and a healthy lifestyle. According to Cancer Research UK, continued eating and drinking patterns—alcohol is also a major factor in cancer—could lead to being overweight and obese and could cause an additional 670,000 cases of cancer in the UK over the next 20 years. Diabetes UK also warns that there are now 12.3 million people at an increased risk of developing type 2 diabetes. If overweight and obesity levels were to be reduced, three in five cases of type 2 diabetes could be prevented or delayed.
Obesity comes at a high financial cost too. Obesity and its related health problems cost the NHS in England an estimated £5.1 billion a year, projected to reach £9.7 billion by 2050, if the Government and the people themselves fail to take any action—as we have heard in the debate, people need to take action for themselves. That is why this debate is so important. If we do not do anything about obesity today, the children of tomorrow are the ones who will suffer.
There are many ways to address obesity. No one intervention is a silver bullet, but it is the Opposition’s belief that action on advertising and marketing can make serious inroads.
Ten years ago, Ofcom’s restrictions on junk food advertising came into effect, but over that decade, our viewing habits have changed, as we have discussed. At that time, the Ofcom report said:
“Advertisements of high fat, salt and sugar products should not be shown in or around programmes specifically made for children...For the avoidance of doubt this measure will remove all HFSS advertising from dedicated children's channels”.
Ten years on, as we all know, that is incredibly outdated and out of touch with the way children watch TV. Children are likely to watch TV with their family or watch programmes that are not on specific children’s channels, such as “The X Factor”, “Britain’s Got Talent”, “Hollyoaks” and other programmes.
A report by the University of Liverpool found that 59% of food and drink adverts shown during family viewing time were for high fat, salt and sugar products and would have been banned from children’s TV. The same report also found that, in the worst case, children were bombarded with nine junk food adverts in just a 30-minute period and that adverts for fruit and vegetables made up only 1% of food and drink adverts shown during that family viewing time. Ofcom’s restrictions on junk food advertising are therefore totally obsolete and in need of a serious update to protect children from the bombardment of junk food advertising from multinational companies.
Many of the charities and organisations that provided me with briefings for this debate called for junk food advertising to be restricted until the 9 pm watershed on all channels, which was something I was pleased to commit to in the 2017 Labour party manifesto and am proud to remain committed to. I hope that the Minister will hear the calls today from hon. Members across the House and will see why an update of the restrictions is necessary.
Children must of course also be protected from other forms of advertising, such as billboard and bus shelter adverts, as well as subtle advertising in films and in made-for-purpose games, which are so prevalent there is a name for them—advergames. “Newsnight” last night noted that there are major concerns with the regulations around confectionary firms and their marketing to children. There seems to be a loophole in the law with regard to advergames, which needs to be closed.
There are also genuine games that are very popular with children although they are not aimed at them, such as Candy Crush—I have to admit to having tried that one myself—which embed advertising in the game and have been shown to drive children's food choices. Sponsorship has also been shown to have a huge impact on brand awareness and purchasing decisions among children. Products high in fat, salt and sugar are often found to sponsor sporting events or teams of which children are a key part of the audience. For example, Cadbury is the official snack partner of the premier league.
The current restrictions do not encapsulate those areas, and in our digital world it is important that our restrictions advance to protect children. Will the Minister commit to holding a cross-Departmental meeting with colleagues in the Department for Digital, Culture, Media and Sport to discuss the urgency of addressing junk food marketing to children across those forums?
Not only do we watch TV and use the internet differently, but we also shop differently. Our sedentary lifestyles mean that we now rush into supermarkets trying to buy the quickest or cheapest products. As soon as we walk through the door, we are tempted with promotions, such as buy one get one free or three-for-two offers. Such discounts make up for more than half of all food sold in the UK, a higher proportion than in any other country in western Europe. We all love a bargain, but research has shown that 76% of purchases were unplanned and decided on in store, which shows the power of such promotions.
That trend is increasingly prevalent among families from poorer backgrounds who are not able to afford more expensive, nutritious and healthier food, or lack the skill to cook it. It is therefore no wonder that children aged five from poorer backgrounds are twice as likely to be obese, and that those aged 11 are three times as likely to be obese. Following what the hon. Member for South West Bedfordshire said, we also need affordable, healthy and nutritious products available on promotion to change habits.
I am sure the Minister will uphold the Government’s pledge to tackle childhood obesity, but their efforts are dwarfed by multinational corporations’ spending on junk food advertising. In 2016, the 18 highest-spending crisps, confectionary and sugary drinks brands together spent more than £143 million advertising their products. I recently met an advertising executive who has turned gamekeeper since having a damascene conversion—he now campaigns against added sugar and obesity. He told me how much effort multinational corps put into marketing specifically to children. It is not accidental, but a deliberate, well-thought-through and lucrative strategy.
Eighteen months ago, the Government launched their much-depleted childhood obesity plan, which left much to be desired. Will the Minister update us on the current situation of the childhood obesity plan? Will he commit to looking beyond it and going further by introducing the initiatives that have been suggested today, such as a 9 pm watershed on junk food marketing, which were sadly dropped from the original plan?
All of the arguments we have heard this morning point to the fact that essential Government action is needed to ensure that our children grow up in a healthy environment so they can be fighting fit for the future. I hope the Minister will take these suggestions back to his Department and think about how they can be implemented into a serious drive to reduce childhood obesity over the next 10 years. Childhood obesity must be addressed. We cannot have a soft-touch approach. We must do this for future generations of children, and make a promise to them that they can be some of the healthiest children in the world.
Child obesity remains one of the top public health challenges on my desk and for the Government. I congratulate my hon. Friend the Member for Erewash (Maggie Throup) on securing this debate through the offices of the Backbench Business Committee. I also thank the Health Committee for its ongoing inquiry into child obesity. Its Chair is not able to be here today, but she has a great personal interest in this subject. Ministers always say that debates are wide-ranging, useful and interesting, but this one certainly has been—it has been much wider than the title of the debate. We have learned a number of things, not least the shadow Minister’s new year activities. She has learned about the work of the pop band the Editors and advergames in the last week alone, and it sounds like one of her new year’s resolutions is to look into Candy Crush—the things you learn here!
As colleagues who are still here will be aware, the latest figures continue to show that our childhood obesity rates remain too high. About a third of children leaving school are overweight or obese. I and the Government will not accept that. In addition, evidence shows that the deprivation gap in obesity prevalence between children in the most and least deprived areas continues to widen. Again, I definitely will not accept that. My hon. Friend the Member for South West Bedfordshire (Andrew Selous) made that point well. When she first came to office, the Prime Minister spoke on the steps of Downing Street about the burning injustices she sees in this country. This is undoubtedly one of the pillars of burning injustice in Britain today.
The gap continues into adulthood: obese children are much more likely to become obese adults, which increases their risk of developing serious diseases, as we have heard, such as type 2 diabetes, heart disease and, of particular interest to me as the cancer Minister, more than 13 types of cancer—I suspect that is underplaying it—including bowel and breast cancer. The shadow Minister and I share a great interest in that subject, having chaired the all-party group on breast cancer for many years together. Obesity is also a major risk factor for non-alcoholic fatty liver disease, as a number of hon. Members said. I see this as a huge challenge to individuals’ health and wellbeing, and a huge cost to the NHS and the country. Obesity-related ill health is estimated to cost the NHS some £5 billion a year—again, I suspect that that underplays it.
There is no denying that obesity is a complex, far-reaching problem. It will sadly not be solved by one action alone, as pretty much all hon. Members said—my hon. Friend the Member for Erewash said that in opening the debate. Neither will it be solved overnight. It is a tanker to be turned around. We launched our childhood obesity plan in August 2016, informed by the latest evidence and research in the area. It challenges us all—the national Government, local government, businesses, the NHS, schools and families—to play our role in reducing childhood obesity levels. There are many parts of the jigsaw, and many players we need to tackle, including the healthiness of the food we are eating, how much we are eating—portion size—how active we are and the environment we live in. Of course, marketing plays an important part.
As part of the plan, we introduced two key measures to challenge the food and drink industry to improve the healthiness of the food children eat every day, and those policies are already showing positive signs. The soft drinks industry levy, which is set to become law in April, has already seen almost half of the soft drink market reformulate its sugary soft drinks to include less sugar. Companies such as the maker of Lucozade and Ribena —I will be visiting it later this week to see more detail—and Tesco have led the way by removing millions of tonnes of sugar. That is a crucial step forward in improving our children’s health, as the data shows us that sugary soft drinks are the main contributor of sugar in our children’s diets.
This is slightly off-topic, but Lucozade has been named public villain No. 2 after Pringles, in terms of its plastic packaging. The plastic sleeves around the outsides of the bottles mean that they are impossible to recycle. Lucozade and Ribena are particularly bad. Will the Minister mention that too when he is having a go at the company about sugar?
It is on my list.
We also challenged the food and drink industry, with Public Health England’s sugar reduction programme, to reduce the amount of sugar in the foods our children eat most by 20% by 2020. Some of the biggest players in the industry, including Waitrose, Nestlé and Kellogg’s, which a number of hon. Members mentioned, have already made positive moves towards that target. Data will be available in March this year to give us a better picture of how the whole market has responded—we will be naming names—and to show whether we have met our year one target of a 5% reduction. We remain positive, but we have been clear from the beginning that if sufficient progress has not been achieved, we will consider further action. We rule nothing out.
We further built on the foundations of the childhood obesity plan in August 2017 by announcing the extension of the reformulation programme to include calories. The Government will publish more detail of the evidence for action on calorie reduction, and our ambition and timelines for that, in early 2018.
Our plan also includes school-based interventions, which a couple of hon. Members mentioned, including the expansion of healthy breakfast clubs for schools in more deprived areas, with £10 million per year of funding coming from the soft drinks industry levy. That is on top of the doubling of the school sport premium, which is flowing into schools as we speak, and represents a £320 million annual investment in the health of our children. The hon. Member for Bristol East (Kerry McCarthy) asked whether that cash will continue to flow as companies take action. I will come back to that point, but the Treasury has guaranteed a level of funding over the next three years, regardless of what comes in from the levy. If she wants me to write to her to put that in more detail, I am happy to do so—I have found the note I meant to read out, but we have covered it anyway. Such actions will ensure that we are tackling the healthiness of the food offer available to all families. The evidence shows that that is absolutely the right thing to do.
On marketing restrictions, another part of the jigsaw is how these foods are marketed, in particular to children, which is of course the central tenet of today’s debate. I thank the Centre for Social Justice and Cancer Research UK—I met both last week—and the Obesity Health Alliance for their recent reports highlighting the marketing of products high in fat, sugar and salt, or HFSS, to children. All are welcome updates that add to the debate.
This month marks 10 years since the first round of regulations to limit children’s exposure to marketing of products high in fat, salt and sugar, when we banned advertising of HFSS products in children’s television programming. We monitor that closely, including in my own home. At the weekend I tried to explain the premise of this debate to my children and, last night, when I phoned home, they told me that while watching a well-known commercial television channel they saw a slush drink mixed with sweets. Such products are being monitored closely in the Minister’s household as well as by my officials. When I get home, I will ask my children to show me that.
Recently, we welcomed the Committee of Advertising Practice strengthening the non-broadcast regulations to ban marketing of HFSS products in children’s media, including in print, cinema, online and on social media. That point was made strongly by my hon. Friend the Member for Angus (Kirstene Hair) in her excellent speech.
The restrictions that the UK has in place, therefore, are among the toughest in the world, but I want to ensure that in the fast-paced world of marketing—many people spoke about how quickly that world is moving—it stays that way. We heard lots of “go further” calls, including by the hon. Member for Bristol East, and that is why we have invested £5 million to establish a policy research unit on obesity that will consider all the latest evidence on marketing and obesity, including in the advertising space. That is also why we are updating something called the nutrient profile model, which does not sound exciting but is important. It is the tool that helps advertisers determine which food and drink products are HFSS and, as a result, cannot be advertised to children. The purpose is to ensure that the model reflects the latest dietary advice. Public Health England expects to consult on that in early 2018.
I will come on to that—if I do not, I will write to my hon. Friend—so I ask him to bear with me.
My hon. Friend the Member for Erewash, who opened the debate, said that the Department should have the lead on advertising. I am not sure that my friends in the Department for Digital, Culture, Media and Sport will agree, but I understand her point. I have noted that the Department for Digital, Culture, Media and Sport, the Ministry of Housing, Communities and Local Government, the Department of Health and Social Care, the Department for Education and the Department for Environment, Food and Rural Affairs have all been touched on in the debate. I reassure the House that tackling the challenge is a cross-Government concern. The childhood obesity plan that was published is a cross-Government plan, and all Departments have a rightful role to play, which continues to be the case as that plan is delivered.
The hon. Member for Westminster Hall, otherwise known as the hon. Member for Strangford (Jim Shannon), spoke well as always. I know he had to leave—he let the Chair and me know that. He spoke about food management and touched specifically on diabetes. He actually said, “If only I had known the damage being done”—I have heard that so many times. On Friday, I visited a brilliant organisation called LifeLab at Southampton General Hospital, which is partly funded by Southampton University. LifeLab empowers children through scientific inquiry to understand the impact on their bodies of their behaviour, the food that they eat and the drinks that they drink. A new spin-off called Early LifeLab goes into primary schools, while secondary schoolchildren from Southampton, across the south of England and further afield come into LifeLab to understand. So in answer to, “If only I had known,” that is what LifeLab does. I am very interested in looking at evaluations of LifeLab as it goes forward and in how that work might be built into a wider public policy roll-out.
My hon. Friend the Member for South West Bedfordshire made an excellent speech, as he always does. He rightly said that the poor are the most negatively affected, and we have touched on that point. I thank him for his Thailand, Popeye and spinach example. He also mentioned local authorities and planning. Local authorities have a range of powers to create healthier environments in their area through local plans and individual planning decisions. The national planning policy framework makes it clear that health objectives should be taken into account. The DHCLG is in the process of updating the framework to see if other aspects can be strengthened.
I thank my hon. Friend for making that point, and for the offer of a weekend together among the spring tulips in Amsterdam, which is very appealing on a cold January morning in Westminster. He also mentioned the Centre for Social Justice which, as I said, I met last week. I am very interested in its work. He touched on Making Every Contact Count and GPs. He is absolutely right about that and we could do much better. It is a subject that I am sure will come up over dinner later this week when I go to the annual dinner at the Royal College of General Practitioners.
My hon. Friend was intervened on by our colleague, my hon. Friend the Member for St Ives (Derek Thomas), on the daily mile. At every single school that I go into, whether as a local MP or as a Minister, I ask if the daily mile is being done. That has been a brilliant import from north of the border and it is excellent. I hope that every Member who goes into a school talks about the importance of the daily mile and encourages them to do it.
Many other points were made. My hon. Friend the Member for South West Bedfordshire talked about colour coding and the traffic-light system. Our colour-coded, front-of-pack labelling scheme is voluntary at the moment. It covers about two thirds of the market. We will consider other available labelling options as part of our withdrawal from the European Union—he has my guarantee on that.
The hon. Member for Reading East (Matt Rodda) spoke about the imbalance of information. His point was well made, I thought, about manufacturers and industry providing more information than the NHS does in his constituency. I would say that the Government have a strong voice in this debate, and rightly so, which is why we are seeing good progress on delivery of the plan, but we are also investing in the highly successful Change4Life programme, which I am responsible for through Public Health England. It informs families about healthier eating. Can we do more? We can, without doubt, in the public health and prevention space.
The hon. Member for Bristol East mentioned the “eatwell plate” in reference to the public sector. To respond, we have in place robust standards for public sector procurement, the Government buying standards for food and catering services. DEFRA is the lead Department and comes into the story here. It continues to drive compliance across other Departments and among NHS hospitals, which are required to meet the standards through the NHS standard contract. The hon. Lady makes a good point. She also raised the issue of academies, and I understand that the Department for Education will shortly begin a campaign to get them all signed up. I thank her for making that point.
In conclusion, from day one we have been consistently clear that the childhood obesity plan marked the start of the conversation—it has never been the final word. We continue to learn from the latest evidence. We are confident that the measures we are taking will lead to a reduction in childhood obesity over 10 years, but we take nothing for granted and will keep everything under review. I thank all Members for their contributions and look forward to further ones.
I thank you, Ms Dorries, and all hon. Members who have contributed to the debate, including the Minister for his response.
We have had some informative, passionate and wide-ranging speeches, for which I thank everyone. The House is truly at its best when it speaks with one voice. I know that the Minister will take note of the strength of feeling on this important issue and act accordingly. Childhood obesity is a ticking time bomb of public health. The Minister has acknowledged that it is a challenge and a cost both to the individual and to the NHS.
My hon. Friend the Member for South West Bedfordshire (Andrew Selous) highlighted some working examples of where bold and brave action has taken place. The Amsterdam example is something that we should all be looking at, bringing together not only national Government but local government, industry and local people. That is so important and the issue is definitely not going to go away.
The health of our nation must be put at the top of our agenda. I believe that by taking a simple but tough stance on junk food advertising now, we will start to make real progress on the issue that will pay dividends in the years to come. As chair of the all-party group on obesity and a member of the Health Committee, I will continue to push for every measure possible to tackle the obesity epidemic well into the future.
Question put and agreed to.
That this House has considered the effect of junk food advertising on obesity in children.
Local Government Funding: Isle of Wight
I beg to move,
That this House has considered local government funding on the Isle of Wight.
It is a pleasure to serve under your chairmanship, Ms Dorries. I am most grateful to the Minister for attending, and I extend to him an invitation to visit my wonderful constituency. I want to raise the issue of the Isle of Wight’s local government funding, to explain why that system is prejudiced against the Island—why it is not fair—and why recognising that disadvantage and rectifying it would in no way set a precedent. Indeed, I hope that the Minister will see it as the right thing to do.
In this debate, I will focus on local government finance for the Island and I hope to call debates in future to examine the Island factor for health, housing and other policies. Overall, I want to work towards an Island deal that includes a settlement over local government funding but, more broadly, a partnership with central Government across Departments that recognises the unique and valuable role that the Isle of Wight plays in our national life. It is not only about money—although that comes in slightly—but about helping us to make the Island even more of a success.
We are an island. I know that is a statement of the obvious, but I say that because I feel that sometimes Whitehall assumes that we are not really an island in the true sense of the word—surrounded by water. We are an island; we are surrounded by water and we are dependent on the ferries to get us to and from the mainland, which is the bit that the Minister lives on, otherwise known as north island. We have a unique place in the nation’s artistic, cultural, scientific and political heritage. Our geology is unique, too: we have some 70 miles of coastline, parts of which contain the richest dinosaur finds in Europe. Half the Isle of Wight is an area of outstanding natural beauty and, arguably, we should be England’s next national park. We are the largest constituency in Britain, with some 140,000 souls. Ours is a little island, but one that has inspired great things and achievements. I would not wish to be anywhere else.
From a Government perspective, we aim to be national leaders in recycling, in the integrated public services model and in combining health and social care, to name but three areas. However, there is a problem with local government funding. Put simply, the Island’s status as an island is not taken into account. In the 1990s, the John Major Government promised the Isle of Wight a study of the extra cost of being an island. Nothing ever came of that proposal, yet the costs remain. Will the Minister consider honouring that pledge? In the meantime, or instead, I am presenting another option to the Minister.
In a 2015 study by the University of Portsmouth, the extra cost of providing local government services on the Isle of Wight—the island factor—was estimated at £6.4 million per annum based on 2015-16 data, which is an additional 3% on the public service provision. That information is on page 2 of phase 2 of the report, “Impact on Physical Separation from the UK Mainland on Isle of Wight Public Service Delivery”. I have circulated copies to the Minister and to his excellent team of civil servants, whom I also thank for being here. That report has been peer reviewed and is undergoing further review.
The University of Portsmouth broke down those extra costs into three. The first is forced self-sufficiency—the lack of spillover of public goods provision to and from neighbouring authorities. We have an obligation to provide a service on the Island, but sometimes we cannot share costs with the mainland. The fire service is an example of that. The second extra cost is the island premium, which refers to the additional cost of conducting business on and with the Isle of Wight. For the provision of public services, that may refer to the relatively higher prices that may be charged by contractors or reflected in the price of goods and services. We try to be as competitive as possible but, clearly, within a confined space there are limits. The third extra cost is what the university has described as “dislocation”—the costs associated with physical and perceived separation from the mainland. Sometimes referred to as “isolation”, it is a common characteristic of all islands, and it is seen in terms of small area, small population and small market.
Other reports have said much the same. They include the report by Coopers & Lybrand in 1996, the Joint Strategic Needs Assessment in 2000, the report by PricewaterhouseCoopers in 2004, the report entitled “The effects of being an island” by the Isle of Wight Council in 2005, the report by the European Spatial Planning Observation Network in 2013 and the University of Portsmouth report in 2015.
Does the Minister agree that we are potentially dealing with decades of historical underfunding? Does he agree that the review by the University of Portsmouth is academically rigid and backed by a wealth of primary and secondary material?
Moving back a little further, I believe that the Island is a victim of the funding system. I will outline briefly the reasons why. First, we are victims of prejudice in public project funding. The Green Book assessments—the way the Government rate public sector investment—does not work for the Island because we are physically separate. That separation results in a lower cost-benefit ratio. We do not have spillover: I cannot prove that a project that would do great things for Sandown, Newport or Freshwater has an effect in Fareham, Southampton or Portsmouth, because we are an island. We cannot make the same arguments as everywhere else in Britain that is connected physically to the mainland or is part of the mainland. We simply do not have that connection. What does the Minister suggest that we and the Government can do about that?
Secondly, we are isolated, but because we are isolated by water we fail to qualify for the rural services delivery grant, because that grant’s funding basis does not recognise the isolation of being an island and does not take into account physical separation in its definition of isolation. Can the Minister suggest a reason why that may be the case, and what does he think Government could do about that?
Thirdly, the ferries were privatised with no public service obligation. That is a significant and pretty unique error. There appears to be no desire to rectify that situation, yet elsewhere, public money tends to get thrown at locations with isolation issues. On the Isle of Wight, we spend more than £100 million a year on the ferries. What does the Minister think of this situation? Does he think that it is acceptable?
Fourthly, health model funding calculations for over 80-year-olds arguably are seen as inadequate, because of the complex health and adult social care needs of people when they hit 80 and get into their ninth and 10th decades. The Island has more 80-plus residents than the national average, and that has a significant impact on our adult social care costs.
Fifthly, recent NHS reports have simply ignored the island factor, as if the Solent somehow did not exist. Those are just some factors that I bring to the Minister’s attention. Please, do not get me wrong, Ms Dorries: we love being an island, having that wonderful identity and a different festival every weekend, and being a fantastic place that people come to, with our wonderful quality of life. This is not some special pleading, but when Government write the rules they do not seem to take the Island into account.
I am presuming that Government funding formulas are based on the idea of broad fairness. If the Minister says that, actually, they are based on the idea of broad unfairness, I will go away, but I assume he will say that the Government try to be fair. If that is the case, can he please not be permanently prejudiced against my Island, and will he recognise that the Island has issues in public service provision by dint of being an island? As we know, Scottish islands receive extra money from the Scottish islands needs allowance based on a number of factors. Welsh islands seem to have bridges galore. We have none of that. We have only the world’s most expensive unregulated ferries. I asked one of the ferry owners whether there was a more expensive ferry anywhere in the world. He said, “Try the chain link between Cowes and East Cowes.” I thought, “That’s not a great answer.” The Government recognise that islands play a special role in Britain. We would like the same recognition for the Isle of Wight—England’s island.
The fair funding formula is due to be implemented in 2021. A previous Secretary of State said that
“the costs associated with being an Island separated from the mainland will be given due consideration…as part of the fair funding review.”
The word “island” appears in the fair funding review technical consultation, along with the question, “Should island status be taken into account?” When I read that, I thought, “Hallelujah.” Clearly, we believe that the answer should be a resounding yes. Will the Minister indicate whether he thinks there is a case for island status being taken into account in the fair funding formula?
We generally have been given two answers at this point: first, “Devolution is the answer to all your problems,” and secondly, “You’re setting a precedent, so we’re not interested.” Devolution is not the answer, for the following reasons. First, there was extraordinarily little information on the Solent devolution package. Secondly, it was clear that that was simply a device to force more housing on the Island. Housing is a problem on the Island. The Government’s housing targets are completely unacceptable, and the current system on the Island serves no one. By building on greenfield sites, we provide housing neither for our youngsters nor for the people on the housing list who need it, and we damage our economy, which is in part dependent on tourism. That is not a conversation for now, but I would like to return to it in due course. Thirdly, the Solent devolution deal that was offered was a Treasury construct. The Treasury is full of wise and sensible people who have difficult jobs—I respect that—but what looks good in London may not work on the Island. Fourthly, to put it bluntly, there was nothing in the deal for the Isle of Wight.
The key power we want to be devolved is the power to impose a public service obligation on the ferries. The ferries would pay for that—its cost would be covered by their inflated profits—and there would be no reduction in services elsewhere. For the Minister’s information, because he may not be aware of their history, those are the ferries that were privatised badly in the 1980s without a public service obligation and are among the most expensive in the world. Their profits are multiples of the public infrastructure industry standard, and hundreds of millions of pounds of debt have been racked up, which Islanders pay for. Will he support giving us such PSO powers, which may mean having to cap the ferries’ profits and debts? I am genuinely interested in his opinion.
The second answer is that the Government cannot possibly give us an island factor because it would set a precedent. I do not understand that. Are the Government implying that Cornwall is going to dig a ditch a mile wide, fill it with water and declare itself an island? Is Northamptonshire somehow going to up sticks and move? Is Lindisfarne going to go on some three-dimensional steroid programme? I think not. Recognition that there is an island factor for the Isle of Wight would not set a precedent, unless that precedent was the Government accepting that we are a little bit different—a little bit special and unique—and working with us so that the Island became the jewel of southern England, as it was and we hope it will be. Listening to us and working with us on a new deal—an island deal—would set a wonderful precedent.
I thank the Minister for being here. I remind him that the amount of money we seek—£6.4 million—is small. It is a tiny part of Government expenditure. It is a margin of error in the Government accounting system. Whitehall probably spends more on paperclips every month. I also remind him that a previous Government made promises about Isle of Wight funding that were not kept, so will he support a study to honour those promises? In the meantime, does he agree that there are additional costs to being an island, which the University of Portsmouth has quantified and which I have quoted, and that those costs are unique to islands? Will he respect, accept and act on, this year and in the future, the costs outlined in the University of Portsmouth report?
Does the Minister also agree that devolution is not in itself an answer, and that no conceivable precedent would be set by honouring a fair funding formula that recognised the Island as just that—an island? Will he assure us that our submission for extra funding will be looked at seriously this year? If there is any doubt about that, may we have the promised meeting, which has not yet materialised, before the settlement for this year is finalised? Will he commit to including an island factor in the fair funding review, and to accepting and implementing that funding formula in full?
I thank the Minister once again for his time, and again extend an invitation from the people of the Isle of Wight to come and visit us. Like our 2 million annual visitors, he will have a wonderful time.
It is a pleasure to serve under your chairmanship, Ms Dorries, in my first Westminster Hall debate in my new role. I congratulate my hon. Friend the Member for Isle of Wight (Mr Seely) on securing this vital debate. In the short time that he has been in Parliament, he has already made an impression as a passionate and committed advocate for the Isle of Wight, and his speech demonstrated exactly why he has that reputation.
I welcome the chance to respond to my hon. Friend and thank him for sharing his knowledge of the Isle of Wight, an island of which I am particularly fond, having grown up just across the water in Southampton—or, as he described it, on the “north island”. His reflections on the Island, which is, as he says, the jewel of southern England, prompted me to recall the summers I spent enjoying all it has to offer to visitors. Just this weekend, while I watched Gary Oldman bring to life Winston Churchill in “Darkest Hour”, I recalled the Island’s Churchill trail. I remembered that, as a child, the former Prime Minster stayed at the home of his friend Jack Seely, and I wondered whether he had any connection to my hon. Friend’s family. Perhaps he will touch on that when he winds up the debate. Regardless, whether it is the Isle of Wight festival or Carisbrooke castle, Blackgang Chine or the Needles, I know just how much there is on the Island to enjoy, to educate and to entertain.
Members may know that today is the last day for responses to the consultation on the provisional local government finance settlement. I will say a few words about that before I come to the specific points my hon. Friend made. Last month, the Secretary of State confirmed the local government settlement, which provides two years of real-terms increases in the resources available to local government. The extra council tax flexibility that we have announced means that total core spending power, which is £44.3 billion this financial year, will rise to £45.6 billion by 2019-20. For the Isle of Wight, that means £132 million in 2019-20, up from £127 million in 2015-16. That represents a 4% cash increase overall, which is double the national average.
Councils know their communities best. They know their priorities, challenges and opportunities. I am aware that my hon. Friend is already looking at ways to raise the Island’s profile, generate jobs and support the tourism industry, and my Department applauds and supports those efforts. Indeed, councils across England are showing that they are capable of finding efficiencies while continuing to provide for their communities. They are playing their part in tackling the deficit, to which this Government remain committed. I am keen in my new role to build on the good work that is already under way. An important aspect of that will be giving local authorities the levers and incentives to grow their local economies. I was delighted to hear that the Solent authorities have been selected as one of the 100% business rate retention pilots for the forthcoming year.
The pilots have proved incredibly popular, with more than 200 authorities having put themselves forward for consideration. I therefore know that the Isle of Wight authority will be excited to have this special opportunity and am keen to see what we can learn from it. It is worth noting that the ability to retain 100% of business rates is estimated to benefit the Solent authorities by up to £3.3 million this year—extra resources that will be welcome and are a due benefit from driving local economic growth.
I turn to the specific points made by my hon. Friend, first and most importantly in relation to the geographical position of the Island. I am grateful to him for comprehensively setting out a number of the key issues affecting his constituency. I have noted carefully his concerns about how we currently distribute the funding available across local government. Clearly, the Isle of Wight’s geography makes the council’s position distinct and creates both opportunities and challenges. My hon. Friend made that point passionately, and it was acknowledged by the former Secretary of State for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), on a visit to the Island in 2016.
It is right that we recognise the specific situation of the Isle of Wight and our other islands in many areas of policy, and not just fiscal policy. What do we intend to do? First, I have asked my officials to continue exploring the various mechanisms in place in Scotland in relation to islands, which my hon. Friend mentioned, with a view to building our knowledge and evidence base. The Department will continue to take steps to inform our understanding of the various factors affecting the cost of delivering services on islands. For that reason, I was delighted to receive copies of the important research undertaken by the University of Portsmouth regarding the Island’s particular situation and potential consequences. Although I am not in a position to comment academically on the report as my hon. Friend asked me to do, it is welcome to have such thoughtful and detailed analysis to help inform the Department’s work. I note that he highlighted several other reports in addition.
I can tell my hon. Friend that this will not be analysis for analysis’ sake. He highlights this issue at a once-in-a-generation time when there is a possibility to do something about it. That is because my Department is embarking on a fair funding review. I reiterate the Secretary of State’s commitment to undertake a thorough, evidence-based review that uses the most up-to-date information available to assess both current and future resources and needs of local authorities. Members may be aware that we issued a 12-week technical consultation seeking views on exactly that at the end of last year. The idiosyncratic island factors we heard about today that drive specific costs are exactly what we need to hear about and consider in formulating a new funding formula.
I urge the Isle of Wight Council to submit any relevant evidence it has alongside other points it wishes to make in its response to the consultation, which we will consider carefully. Furthermore, I will take the opportunity offered by my hon. Friend to meet him and perhaps colleagues from the University of Portsmouth and his local authority to discuss the findings in more detail, as part of future conversations on the fair funding review. More broadly, I will be encouraging input from all Members and representatives from across local government so that we can work together to create an updated and more responsive local government financial system.
My hon. Friend also raised the rural service delivery grant, noting that the Island is not currently a recipient. That is, as he said, due to the particular sparsity methodology it uses. We recently announced that the grant will be funded through increased business rate retention from 2020-21, when we aim to implement our fair funding review, which will redistribute business rates across the sector. He may well have given us a good example of why we need to revisit the underlying basis for relative needs allocations between local authorities, as many of the formulae have not been updated in more than a decade.
Similarly, my hon. Friend made the point about population growth, particularly in the age categories that drive social care. As I have discovered in the past week, the formulae we currently use are relatively old and do not dynamically take into account changing populations, which his council is experiencing. As I have said, the review is looking afresh at how we take such key factors—rurality, remoteness and population growth—into account. I therefore welcome Members’ support in helping us to deliver an outcome that is robust, collaborative and evidence-based. This is the perfect time to shape the discussion, with our consultation currently live.
My hon. Friend mentioned the local government finance settlement. As he knows, we are three years into a four-year deal that provides funding certainty for those councils that published efficiency plans. I am delighted that the Isle of Wight took up that offer. We recognise the pressure faced by all local authorities, particularly in the light of pressures in areas such as social care. That is why, subject to Parliament’s approval, the Government will increase the core referendum principle. As a result, the Isle of Wight specifically will have the flexibility to increase its council tax by up to 6% this year, delivering funds of up to £4.9 million.
I understand that the council is awaiting responses to its consultation on the 2018-19 budget and that there is to be a public meeting today with members about how best to allocate funding. It is good to see the Island’s community steering the council’s vision on issues such as partnership working, adult social care and housing. I look forward to receiving the council’s response to the provisional settlement. My officials will look carefully at that and consider all the responses ahead of the imminent final settlement in a few weeks.
On devolution, the Government are committed to empowering local authorities and rebalancing the local economy through local devolution and growth deals. We know that devolution can bring multiple benefits, including more accountable and effective institutions at the right scale, but I note my hon. Friend’s points. It is clearly important that we work towards a model that works for each individual area. I understand that the Minister for Local Growth, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), is visiting my hon. Friend’s area in March, and I look forward to hearing about those discussions.
Lastly, on infrastructure, skills and business support, I recognise that my hon. Friend has an inspiring vision and strong ambitions for the constituency he represents so proudly. It is right that Government do their best to support those aspirations. I am pleased to note that the Government have supported investment in those areas on the Isle of Wight through the growth deal awarded to the Solent local enterprise partnership. Through the LEP, £14.7 million of funding has been invested locally, through the centre of excellence for composites, advanced manufacturing and marine at the Isle of Wight College and the Floating bridge at Cowes. The LEP has also invested £750,000 of regional growth funding, which was used to set up the rural business fund. All of that will help contribute to the Island’s economic growth, leveraging private investment, creating jobs and assisting the rural sector.
Again, I thank my hon. Friend for calling this important debate and for bringing these issues to my attention so early in my tenure. He is right to be ambitious for his Island and to fight for it to get the consideration it deserves. I look forward to working closely with him in the coming months to address the challenges and opportunities he has highlighted.
I thank my hon. Friend for his words. Just a point of fact: Jack was a great-great uncle and was elected as a Conservative despite the fact that he was a Liberal. It is a long story.
I thank my hon. Friend for recognising our distinct nature, for his words on the Scottish islands needs allowance and for his comments on the fair funding formula, which is so important to us. We will submit much evidence. Finally, although public services debates can sometimes seem arcane, it is important to remember their purpose—to build a fair and just society—for which we all aim.
Question put and agreed to.
Food Poverty: Merseyside
[Sir David Crausby in the Chair]
I beg to move,
That this House has considered food poverty in Merseyside.
It is a pleasure to serve under your chairmanship in Westminster Hall this afternoon, Sir David.
May I start by thanking all the selfless and dedicated food bank volunteers not just in Merseyside but across the country? Over the past two years I have volunteered at a local food bank in my constituency—the North Liverpool food bank network at St John’s church in Tuebrook—and I have seen at first hand both the fantastic work it does and the massive need it seeks to address.
May I also welcome my hon. Friends from across Merseyside who have joined us for this debate? Two of my hon. Friends who are unable to be here today have sent their best wishes. My neighbour, my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), has been a long-standing campaigner on this issue, and my other neighbour, my hon. Friend the Member for Liverpool, Walton (Dan Carden), used his first Prime Minister’s question last year to ask about schools providing free meals during the holidays, which is a subject I will return to later in my speech. Both of them have other duties in the House this afternoon.
Frankly, this is a debate that we should not be having. As a first-world country—one of the wealthiest in the world—it is surely shameful that we have seen the exponential increase in food bank use that there has been. According to the highly respected Trussell Trust, 128,697 people were provided with a three-day emergency food package in 2011. Last year, the comparable figure was over 1.1 million, which is an eightfold increase in a six-year period. In the run-up to Christmas, ITV Granada ran a special report on food poverty, focusing on Morecambe in the north-west. That programme was seen by more than 7 million people, and the issues that it raised so powerfully are exactly the same as the issues that we face in Merseyside.
The Department of Health defines food poverty as
“the inability to afford, or to have access to, food to make up a healthy diet.”
The United Nations found that between 2014 and 2016, just over 4% of the UK population were deemed to be severely food insecure. That is nearly 3 million people in our country, and it suggests that there are about 2 million people suffering from food poverty who, for whatever reason, have not had access to a food bank.
Across the north-west last year, the Trussell Trust network provided 175,000 emergency food packages. That is the largest number in any region in the country. Of course, that does not take into account the independent food banks that are also providing food aid, including the Hope food banks, the Orchard and the Merseyside Youth Association food bank. Last Friday, for example, the Orchard food bank in the constituency of my hon. Friend the Member for Garston and Halewood (Maria Eagle) opened at 10 in the morning, handed out 49 bags of food in the space of 25 minutes and had to close at 11 because it had run out of food packages, such was the demand.
Across Merseyside, the two biggest factors driving people to use food banks are low incomes and changes and delays in the benefits system. In the six months between April and September last year, 27% of people in Liverpool said that the main reason they were being referred to the food bank was a low income. These are people in work who are having to use food banks. In recent years, we have seen an increase in food prices. Last year, for example, there was the highest rate of food price inflation for four years. When that is combined with wage stagnation and increasing job insecurity, it means that many of the most vulnerable families in work are taking home less money. Real wages have barely increased in this country for over a decade, and last year they fell by 0.4%. This brings together what might be described as a “perfect storm”, where the price of food is increasing much quicker than most people’s wages. I urge the Government to focus more on measures to tackle the scourge of low pay in this country.
Nationally, the main reason people are referred to food banks is low incomes for families in work. In Liverpool, although that is the case for a significant number, the primary reason is changes and delays in the benefits system. Some 51% of those who used a food bank in Liverpool last year did so because of changes or delays with their benefits. Since 2010, we have seen more than 20 major changes to working-age benefits in this country, and that has affected more than 50,000 households in just the city of Liverpool. Liverpool City Council undertook a cumulative impact assessment of those changes two years ago, and I urge the Minister to work with Liverpool City Council and other local authorities to undertake a current cumulative impact assessment of the impact of benefit changes in communities in not only Merseyside but other parts of the country.
Just before Christmas I walked into my constituency office and saw Jay Glover, my assistant, on the phone to the Department for Work and Pensions for an extraordinary amount of time, trying to resolve somebody’s benefits problem. That was just before Christmas, and that person had to go to a food bank. Does my hon. Friend agree that such incidents are becoming ever more frequent in all our constituency offices, and so we know that this DWP delay is real?
My hon. Friend is absolutely right. My experience from my advice surgeries and the constituency caseworkers in my local office is exactly the same, as I am sure is that of colleagues. The survey evidence that I referred to demonstrates that in Liverpool, half of those who have to use food banks say that it is because of delays and changes with benefits.
I congratulate my hon. Friend on raising this really important subject. In Wallasey we have a very similar result. Well over half the people who have to use the food bank—and it is large numbers now—report to the Trussell Trust that they are doing so because of either benefit sanctions or delays to their benefits. Does he agree that this is a Government-made problem?
My hon. Friend makes a powerful point, and I will now focus my remarks on the set of challenges arising from that combination she described so accurately of the impact of benefit changes, benefit cuts and benefit delays, and sanctions.
A report by Sheffield Hallam University pointed out how the risks and costs had, in many ways, been passed from central Government to local authorities. From the point of view of Merseyside authorities, this has coincided with a drastic and dramatic cut in central Government funding for those local authorities.
As it has been implemented, universal credit has had an impact on debt and therefore on food poverty. In an article published this weekend, my hon. Friend the Member for Stretford and Urmston (Kate Green) suggested a number of changes the Government could make to universal credit that would have a real impact on communities such as those across Merseyside. Two of her suggestions are relevant to today’s debate. One is to urge the Government to follow Labour’s example and commit to passporting every family on universal credit to free school meals in order to avoid cliff edges when household earnings increase. Secondly, she suggested that claimants should be able to choose to receive their universal credit payments fortnightly to minimise the risk of households running up debts while they wait for payments. I urge the Minister to consider those two very positive suggestions from my hon. Friend.
A former Minister at the Department for Work and Pensions wrote in a letter to Liverpool City Council:
“The suggestion that benefit delays are responsible for an increase in foodbank usage is unfounded”.
That is completely at odds with what I hear when I volunteer at my local food bank and with all the information that I have received from a range of local organisations in preparing for today’s debate. I ask the new Minister, whom I welcome to his position, to take a different view from that of his predecessor and instead to support the view of the Trussell Trust that changes to benefits are forcing people to turn to food banks. If he is not prepared to take that position, I would like him to give the House his alternative explanation for the eightfold increase in the number of people using food banks.
Food poverty is a growing public health concern. A lack of access to the nutritious food needed for a balanced diet increases the burden on the national health service. Liverpool has seen a significant rise in the number of fast food outlets coincide with a rise in food poverty. The city of Liverpool has the 34th highest outlet density of 325 local authorities, and the areas with the highest density tend to be in the most deprived parts of the city. One of the strongest measures of a healthy diet is how often people manage to eat five portions of fruit and veg a day. Liverpool has the 29th lowest proportion of the population managing that; Manchester is the only core city with a proportion that is lower still.
Liverpool City Council has tried to address the challenge by teaming up with a brilliant local social enterprise, Can Cook. Using donations, Can Cook has produced food packages containing predominantly fresh food, feeding local people with nutritious food for five days. I take this opportunity to praise the work of Can Cook in its efforts to make healthy food parcels available to people, and to thank the Liverpool Echo, which teamed up with Can Cook for a significant fundraising campaign in 2016. That is just one example of the ways people across Liverpool, including Liverpool City Council, are striving to help the poorest in our city.
The Liverpool Citizens Support Scheme was set up by the city council to help the most vulnerable in Liverpool who are facing short-term crises to meet their needs for food and other essential items. The average award is £91, and Liverpool City Council made over 10,000 awards, of which 8,000 were for families in urgent need. The council is also helping with discretionary housing payments for people who need extra help with their rent. The original budget for that scheme was £2.7 million, but the sheer demand has meant that the council has found another £600,000 for it. That highlights a number of things, including the impact of the bedroom tax on communities across Liverpool.
The Mayor of Liverpool, Joe Anderson, has established the Mayoral Hardship Fund, a special £2 million fund over three years, set up specifically for the council to be able to respond to the exceptional and growing pressures on Liverpool residents who are on a low income. Those schemes have become a life support system for some of the most vulnerable families in the city, who are facing years of austerity, wage stagnation and benefit changes. I ask the Minister to join me in praising the city council for doing that, to tell us what the Government will do to support Liverpool’s efforts to protect the most vulnerable and to say whether they will encourage other local authorities in other parts of the country to establish similar schemes.
I will finish by talking about one of the many brilliant community organisations in my constituency, which works with some of the poorest and most vulnerable. The organisation is called Croxteth Gems, and before Christmas I was pleased to team up with it to help with its “12 Days of Christmas” campaign. Jean Hannah, who runs the organisation, tells the story of a family she visited in Croxteth a couple of years ago, who were on hard times. Jean arrived at their home and was shocked to see that, rather than an actual Christmas tree, the family simply had a picture of a Christmas tree. They could not afford a tree or Christmas decorations. The “12 Days of Christmas” campaign sought to ensure that some of the poorest families in Croxteth were nevertheless able to enjoy their Christmas. Originally, the aim was to help 100 families, but the strength of the local community response was such that Jean and her team were able to deliver food, clothes, Christmas trees, decorations and presents to 136 families, benefiting over 350 children.
Croxteth Gems does work like that all year round. It was originally set up to provide play and youth services, but because of the reality of food poverty, it has increasingly had to serve food to hungry children. One thing it does during school holidays is to provide play to children in the local area, and provide meals as part of that. It is now helping to support a local school to provide a breakfast club for over 70 children throughout the school year. The additional work it does, beyond its core mission, has only been made possible by generous donations from the local community.
I know that my right hon. Friend the Member for Birkenhead (Frank Field) has led some excellent cross-party work urging that there should be free school meals for children during the school holidays. That measure would make a difference to some of the poorest and most vulnerable families in Merseyside and, indeed, in other parts of the country. I know there is a private Member’s Bill on the subject on Friday’s Order Paper; I urge the Minister and the Government to give serious consideration to supporting that proposal to help some of the poorest and most vulnerable children be fed throughout the school holidays.
There are organisations up and down the country like the ones I have referred to—Croxteth Gems and the North Liverpool food bank—stepping in where the state has failed. I also particularly thank Fans Supporting Foodbanks, which has brought together Everton Supporters Trust and Spirit of Shankly—Liverpool’s supporters—to mobilise football fans in Liverpool in support of our local food banks.
I want to see an end to food poverty not just in Merseyside, but across the whole of the United Kingdom. For that to happen, it will require a fundamental change in Government policy on benefits, wages and the funding of local authorities. I am pleased to have had the opportunity today to highlight the scale of the challenge we face and to pay tribute to the amazing response of local communities across Liverpool. Local people have risen to the challenge of addressing food poverty. I urge the Minister and the Government to change course so that together we can finally defeat food poverty once and for all.
I will begin by congratulating my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) on securing the debate. It is tremendously important that this issue, which is of long standing and is worsening, is highlighted as regularly as possible. When I was shadow Secretary of State for Environment, Food and Rural Affairs, we repeatedly held Opposition day debates in the main Chamber on this matter. I remember those debates going back to 2012-13, yet the Government, as far as I am aware—the Minister will correct me if I am wrong—are still not collecting statistics on the amount of food bank use and the reasons behind it.
I find it amazing and disgraceful that the Government of one of the richest countries in the world—although we are slipping down the league—do not care enough that many of their citizens have to feed their families by going and collecting food given to them to make them research why it is happening and what can be done about it. I must say that that does not seem to stop Ministers writing to those of us who raise these issues with them, asserting that the Government are not at fault, and that benefit delays and changes are not at fault; my hon. Friend the Member for Liverpool, West Derby read out an example. How Ministers can say that, when they do no research into what the reasons are, is utterly beyond me. I have been calling for the Government to research this for years, but so far as I am aware they have still not undertaken to do so.
I welcome the new Minister to his place; I predicted that he would respond to the debate, because it is always the newest Minister in the Department who draws the shortest straw and has to deal with these debates. I sympathise with him. In my experience, these debates are always a hot potato for the Government; they cannot decide which Department should answer, because nobody in government is responsible for food poverty. The Department for Environment, Food and Rural Affairs does not want to do it, the Department for Work and Pensions does not want to do it and the Cabinet Office does not want to do it. The short straw used to be drawn by the Minister with responsibility for volunteering, but that post appears to have disappeared from Government. However, we have not yet had the updated list of ministerial responsibilities—a week after the reshuffle—so we do not know for certain that that is the case. It looks like, at least for the present, the new Minister has drawn the short straw and caught the hot potato and will have to deal with the matter.
He will have to deal with it, because those of us who represent constituents who have to go to food banks regularly in order to feed their families will never stop raising the issue with the Government until something is done to alleviate the problem. It is not good enough for the Minister to say—I hope he will not do so today —that it is just one of those things, that it is nothing to do with the Government and that they have reduced the number of benefit delays. The fact is that the biggest reasons by far for people resorting to food banks, certainly on Merseyside, are still changes in their benefits, sanctions on their benefits and so on.
The other big reasons why people go to food banks, which my hon. Friend the Member for Liverpool, West Derby referenced, are that, even though they are in work, their income is not regular enough, they do not have guaranteed hours or they are on zero-hours contracts. They do not know when the next pay cheque is coming and they have fixed costs, such as rent and other bills, which means that there are times when they simply cannot afford to feed their family.
If the Minister has anything in his speech about the best way out of poverty being work, I suggest to him right now that he crosses it out. I see him getting his pen out now; that phrase will be in his speech a lot. It is not the case in Liverpool that the best way out of poverty is work, because many people who work hard still cannot afford to feed their family. If that is the Government’s only response, they are simply complacent. In fact, if the Minister commissioned research about why people use food banks, he might actually have some real evidence that that is the case, instead of the anecdotal evidence that we get at our constituency surgeries.
The South Liverpool food bank in my constituency has seen ongoing increases in people asking for help over the years. Not only was there a 10% increase between 2015 and 2016 but last year it went up again. In 2015-16, 3,890 people in the Liverpool end of my constituency accessed a food bank. The figure last year went up to 4,076, more than 1,700 of whom—almost half—were children. In 2005-06, 2,894 accessed a food bank across the entire country, but there are now more than 4,000 just in my constituency, so when I say it is a disgrace that the Government do not collect statistics and research why this is happening, I mean it. It is a problem that they appear not to care about, because they do not seem to be finding out why it is happening and coming up with a policy for dealing with it. When we talk about our constituents going hungry or children not being able to concentrate at school and losing weight over the summer because there are no school meals, it is simply not good enough that that is our Government’s attitude.
Does my hon. Friend recognise that, even though the Government do not do any research, the Trussell Trust and those people who actually provide food and collect food for food banks do. Their research proves conclusively that benefit delays, changes to benefits and low pay are the main reasons why people resort to food banks. Will she acknowledge that, as universal credit comes to my constituency and is introduced into the Wirral, my local food bank has said it will have to collect an extra 15 tonnes of food to deal with the 30% increase in food bank use that its research suggests accompanies the introduction of full universal credit in any area?
I agree with my hon. Friend on the impact of the roll-out of universal credit. One reason why I say that this crisis, which is already worsening and has been over the past few years, is actually set to get even worse is that we have not yet had the full service roll-out of universal credit in Garston and Halewood and across much of Liverpool. It will be rolled out at some time during this year, although it has been delayed again.
The Trussell Trust says that it has noticed a 17% increase in food bank usage across all its food banks where universal credit is rolled out, against an average—where the roll-out is not a factor—of 6.5%. That is a significantly increased extra risk where we have universal credit roll-out, and that is about to happen in Liverpool and across Merseyside this year. We expect, as local Members of Parliament, a big increase in this kind of problem coming to us and our advice surgeries.
The Liverpool Echo’s Share Your Lunch campaign has, over the last 18 months, raised more than £73,000 and fed more than 36,000 people across the city region with fresh and nutritious meals. It has done a tremendous job within the very fine tradition of self-help that we have in Liverpool and on Merseyside. However, that initiative is now over. My hon. Friend the Member for Liverpool, West Derby referenced Can Cook, which is also based in my constituency, although it works across the city region.
Although Can Cook is moving on to try to do more good work, the fact that, over the last year or so, its initiative has fed many local children who do not get their free school meals during Christmas and the school holidays shows definitively the importance of the initiative my hon. Friend referred to, of passporting free school meals and making free school meals available in school holidays. For many children in my constituency, it is the only good meal they are guaranteed in a day. During the summer vacation, many young people in adventure playgrounds, such as the Garston “venny” in my constituency, were kept fed with fresh and nutritious food from Can Cook and Share Your Lunch.
My hon. Friend also referred to Fans Supporting Foodbanks, an organic campaign that has grown up among football supporters, of which there are many in Liverpool. Home matches are used as an opportunity to collect food for food banks, such as the North Liverpool food bank, which is of course based around the two football grounds in Liverpool. Again, they are in the finest Liverpool tradition of self-help and of making a difference to the lives of neighbours. Unfortunately, it reminds me too much of what was happening in the early part of the 20th century in Liverpool—of the Clarion soup vans, of the initiatives organised by the early labour and socialist movement and of Bessie Braddock and her mother, Mary Bamber, who used to go around cooking food for unemployed people, who were in a desperate state at that time. We should not be going back to that.
The Minister has to make sure that his Government try to stop this happening and do not simply ignore the problem, refuse to collect statistics on it, blame the victims for what is going on and insinuate that because food is free, of course people go and access it. We have a large and growing crisis of food poverty in our city and in this country. It is my contention that the Government are doing nothing to tackle it. They will not collect statistics on why it is happening, and things are set to get worse this year, with the roll-out of universal credit.
It is not enough for our Prime Minister to stand on the steps of Downing Street and assert that she is going to do something for people who are struggling or just about managing, and then do absolutely nothing to help people who cannot feed themselves or their families, not through any fault of their own but because this Government have removed support for them via the local authority and the benefits system. The Government are not trying to make sure that work pays and that if one works for a living, there is enough in the wage packet to feed a family. That is where this Government are falling down. It is a disgrace, and I wait to hear from the Minister that he at least is going to do something to tackle it.
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) on securing this debate on such an important issue.
We should be clear that it is an absolute disgrace that there are so many people suffering from hunger and poor nutrition in this prosperous country in 2018. Food poverty is, of course, part of more general poverty. People in poverty juggle between providing for essential needs such as eating, keeping warm and keeping housed, and too many people face the impossible choice: heat or eat? How can it be just that so many people, including children, are going hungry?
Let us look at what is happening in Liverpool, where the city council has already lost 58% of its disposable income. That figure will reach a massive 68% by 2020. The Liverpool mayoral action group’s important and groundbreaking report shows the cumulative impact of 20 cuts made to benefits, including benefits for people in work, since 2010. My hon. Friend the Member for Liverpool, West Derby referred to that. Those cuts resulted in a loss of £157 million for Liverpool people by 2016. That means that 55,000 people have been affected by a reduction in their income, which was already too low to meet basic needs. The principal groups of people who have lost out are those who are long-term sick, disabled, in insecure jobs or in jobs with insecure and changing incomes and many families with children. Those problems will be exacerbated by the full roll-out of universal credit across Liverpool this year.
Inadequate income to meet basic needs leads inevitably to food deprivation. People are constantly juggling between having enough to eat, keeping warm and keeping a home. That is intolerable. My hon. Friends have referred to the work of food banks and the disgraceful situation of so many people needing to rely on emergency food supplies to survive. Between October 2016 and September 2017, 8,732 emergency food vouchers had been redeemed at one of the three Trussell Trust food banks in Liverpool, feeding 18,456 people. That is divided between 11,500 adults and 6,900 children. What a terrible situation in 2018. The main reason for this abominable situation is benefit cuts and people on low incomes, in unstable jobs and getting an irregular income.
The fact is that people are suffering. The situation is increasingly disturbing. The Liverpool public health report for 2016-17 makes alarming reading. It records that 27% of children in reception classes in Liverpool are obese, as are 38% of children in year 6. Obesity is closely linked with food deprivation and poor nutrition. That report records a disgraceful and horrendous figure—a significant rise in hospital admissions for malnutrition in women of childbearing age and young people. It is hardly believable that such a thing is happening in our day and age. The report also shows that, in 2016, provisional data demonstrate that there were 39 infant deaths in the city—the highest recorded figure since 2005. What a horrendous situation that, in 2018, in a prosperous country, more people are being admitted to hospital for malnutrition and there are more infant deaths. Those are things that nobody would believe unless they saw those figures in Liverpool’s public health annual report.
What is being done to address this woeful situation? Liverpool City Council must be commended for its efforts. My hon. Friends have referred to a number of steps that the council is taking. The city Mayor’s action group on fairness and tackling poverty has identified food poverty, together with deprivation in fuel, clothing and housing, as a key concern requiring investigation and action. It has implemented a series of practical measures, including issuing crisis financial awards for food and mitigating the impact of Government cuts on the income of vulnerable people by using discretionary funds—funds that are increasingly under pressure.
Many of the people receiving those funds because they are in an emergency and a desperate situation are in work. Let us do away once and for all with the myth that people who are suffering in poverty are in some way feckless or do not want to work. That is an outrageous untruth or, if I am allowed to use the word in Parliament, a lie. That is what that charge is.
Liverpool City Council has also instigated healthy living public health initiatives, which are very important. The basic cause of the problem is a lack of income. It is right that people are given the fullest possible information about how to make best use of an inadequate income and basic information about nutrition and how to access nutritious food. That work is important.
Does my hon. Friend accept that, no matter how much good work the Trussell Trust food banks do, the food that they hand out is tinned, dried, fatty and full of sugar and salt? That is not the best way to build a healthy diet. Those dependent on food bank usage are automatically getting poor-quality food, through no fault of the people who are helping to hand out that emergency support.
My hon. Friend makes an extremely important point. The work of food banks is excellent and very much appreciated, but of course they depend on the food that is given to them, and she has pointed out some of the consequences.
Liverpool City Council has done a great deal, and I have referred to some of that work, but it cannot solve the problem that the Government have created. Although the invaluable work of the Churches and the voluntary sector is a crucial lifeline for many, that alone cannot remove poverty, hunger and poor nutrition. The Government have a responsibility to resolve the problems that they have created. I look forward to hearing the Minister’s proposals on how he will change this deplorable situation.
It is a pleasure to speak under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) on securing the debate.
Food poverty is at epidemic levels across Great Britain. As my hon. Friend said, it was defined by the Department of Health as
“the inability to afford, or to have access to, food to make up a healthy diet”.
We question “a healthy diet”. Under the current Government, we have seen a 122% increase in the number of people admitted to hospital with malnutrition. For the most part, that is because a good diet is simply out of reach financially. In 2016-17, there were 806 admissions to hospital of people suffering from primary malnutrition in England. Food price increases, welfare reforms, wider Government cuts and insecure, low-paid employment are at the root of this crisis. An increasing number of our citizens are living in genuine deprivation.
I have seen the problem of malnutrition in my own constituency, where 74 people were admitted to my local NHS trust—St Helens and Knowsley—with diagnoses of primary or secondary malnutrition in 2015-16. Unfortunately, the data is not divided into primary and secondary at local level, and we know that secondary malnutrition can be related to other illnesses.
Why is this happening in the sixth wealthiest country in the world? Put simply, we have become so profoundly unequal that last year’s Sunday Times rich list stated that it was “Boom time for billionaires” in Britain. Well, the Government have certainly addressed that situation. The £20 billion-worth of tax cuts under this Government have largely benefited the wealthy, and there have been increases in indirect taxation, which disproportionately affects the less affluent in our society—the very people we are talking about—and more than cancels out the effects of any direct tax cuts from which they might have benefited. Research published last year indicates that we are now the most unequal society in Europe, both socially and economically.
Let me tell hon. Members about the experience of many of my constituents. They are often plagued by low-income, insecure employment and never have any opportunity to save for a rainy day. They are often people who are unemployed through no fault of their own, who are in between jobs or, in some cases, longer-term unemployed, and, of course, those who are affected by benefit delays and changes. People affected by benefit delays and changes make up 43% of food bank referrals nationally and 42% of referrals in my constituency.
Other crises bring people to food banks: being without benefits altogether, which can happen for a variety of reasons, including waiting for claims to be processed, debt, delayed wages, domestic violence, not having recourse to public funds, and homelessness and sickness. All the people affected have been let down by a Government who are bent on cutting the social safety net from under them even though they can make £20 billion of tax cuts.
Food aid organisations are doing a sterling job of plugging an ever widening gap, and I pay tribute to the volunteers at food banks up and down the country. I have witnessed in my constituency how hard the volunteers work in St Helens and Knowsley to ensure that families have access to the supplies that they need. In the six months from April to September 2017, the Trussell Trust recorded that, in Merseyside, three-day emergency food supplies were handed out to 16,761 adults and, appallingly, 10,145 children. That is without the likely spike in use in the months leading up to Christmas and over Christmas.
The St Helens and Knowsley food banks have provided me with ward-level data relating to food bank use in my constituency. It is shocking. In 2017, 2,134 of my constituents were recipients of supplies from the food bank in St Helens, where my constituency has seven wards, and 40% of the recipients were children. I am told that the full data for December has yet to be collated, which means that the true figure is even higher. I was deeply shocked to see that nearly one quarter of the recipients were concentrated in just one ward of my constituency. Knowsley food bank, from April 2017 until the present day, has fed 648 of my constituents, 44% of whom were children. Knowsley accounts for just two wards in my constituency.
It should be noted that the data is provided by the Trussell Trust itself. As many colleagues have said, the Government do not collect any data whatever, on either the levels of food bank use or the number of food banks. The Government say that that is to avoid placing an undue burden on food bank volunteers, but I argue that it is to try to minimise the focus on the fact that, under this Government, people are going hungry at astonishing and unforgivable rates.
FareShare Merseyside has told me that it was busier than ever in redistributing surplus food from the food industry to charities and community centres in 2016-17. It is not just food banks that are helping. They do a significant job, but there is lots going on. In that year, FareShare Merseyside contributed towards in excess of 1,142,000 meals across the city region, feeding more than 19,000 vulnerable people every week. In St Helens alone, it has 14 member organisations to which it provides food.
The Government do not collect any data on children arriving at school hungry. Why are our schools providing breakfast to hundreds of thousands of children? Teachers noticed children could not concentrate to learn and were sleepy, simply because they were hungry. “You can always tell if a child has eaten breakfast—they concentrate more in class and behave better, too.” That is what teachers say.
Forty-three per cent. of teachers recently polled in a survey believe that their breakfast club may have to close in the next few years. Nationally, that equates to 6,700 clubs, which feed 200,000 children. Eighty-six per cent. of those polled said that the closures would be down to lack of school funding. Schools, local government and everybody who helps are affected by cuts. Most worrying of all, more than one third of teachers in schools with breakfast clubs that have already closed down said that they had noticed a decline in exam results, and then the Government tell us that Merseyside is not doing too well on education. A lack of decent, nutritious food must not hold our children back for life. The Government should be ashamed. They should stop lecturing us about children not learning and start feeding the children. What is happening will serve only to entrench the social divide in the UK for generations and it must be stopped.
Almost 30% of my constituents are paid below the Living Wage Foundation’s living wage of £8.25 an hour. That is simply not enough to get by on, let alone to save to provide a cushion to fall on. In my constituency, 27% of the children—more than one quarter—live in poverty. In addition, a higher proportion of my constituents than average suffer from long-term sickness—38% of the working age population.
The Government’s policies actively contribute to the situation, causing starvation. Their own Secretary of State resigned after the 2016 Budget because of the planned £3 billion of cuts to universal credit, among other policies, which cumulatively saw the poorest families— 2.5 million of them—up to £2,100 a year worse off, when the Government were cutting £20 billion off tax for those at the top.
The recent reduction from six weeks to five weeks for receipt of universal credit payments is not enough. Delays will remain a contributing factor in food poverty. The Government are tinkering at the edges of a crisis. In areas where universal credit has been rolled out, food bank use has increased by 30% in the following six months. It is immoral to expect families to survive for five weeks with nothing. I fear for my vulnerable constituents in low-paid, insecure employment, who have never—and nor have their extended families—been able to afford to save. The Government are also granting applications for an advance of universal credit. I believe that that must immediately be changed to an up-front advance as part of all applications for universal credit, with an opportunity to opt out of the advance, rather than having to ask for a loan or advance.
On 11 January the DWP’s consultation on free school meal eligibility criteria—and an earnings threshold of £7,400 as a requirement for a child to receive a free school meal—closed. The same Government who implemented £20 billion of tax cuts are consulting on reducing the eligibility criteria. Despite Ministers’ insistence that 50,000 more children would qualify, the Children’s Society is adamant that the measure would mean more than 1 million children losing their school meal—which, nearly always, will be the only meal they have. In the region of Merseyside, just under 24,000 would no longer have free school meals, and in the two local authorities that cover my constituency, St Helens and Knowsley, 4,300 children would no longer be eligible for a free school meal. The consultation is over. There must not be any reduction in the eligibility criteria for free school meals, or some children could lose the best source of nutrition they get in a day.
I am pleased to be opening Company Shop and Community Shop in my constituency next week—I am pleased because it will bring help, but not pleased that it is needed. I applaud the initiative, which works with big-name retailers and manufacturers across the country, taking surplus food and products from them. That enables food prices to be significantly reduced, and leaves families with a sense of pride in purchasing their own goods. Many families do not go to the food bank because their pride does not allow them, so many more than we know about are hungry. I am delighted to hear that new jobs will be created as a result of the shops opening. Poverty is not inevitable. It is a result of Government inertia and incompetence, and their immoral behaviour towards people. The Government owe vulnerable people their dignity and must work to build a more just society.
It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) on securing this important debate and making such a compelling speech. I join him, as I am sure all Merseyside MPs do, in paying tribute to the food bank volunteers who work so hard to address the needs of those who need help to feed themselves and their families.
We have had some fantastic, passionate contributions, in which the points were made incredibly well. My hon. Friend the Member for Garston and Halewood (Maria Eagle) spoke with passion about the Government’s years of failure to collect the statistics needed to understand the situation. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) spoke about the disgrace of food poverty in this country, and the impact of hunger on public health, with particular reference to the increases in the number of people admitted to hospital with malnutrition and in the number of infant deaths. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) spoke passionately about the huge inequalities of wealth in society. Her claim that poverty is not inevitable rings true. There were also good interventions from my hon. Friends the Members for Wirral South (Alison McGovern) and for Wallasey (Ms Eagle). I welcome the new Employment Minister to his post.
I believe that the debate is timely. This morning the Institute for Fiscal Studies published a study showing that one in four of Britain’s poorest households are falling behind with debt payments or spending more than a quarter of their monthly income on repayments. Earlier today the Office for National Statistics also published the latest data on food prices. Despite a slight fall in the rate of inflation compared with November, the price of food was still more than 4% higher in December, compared with December 2016.
The full service of universal credit is being rolled out on Merseyside and, despite the changes announced by the Government at the end of last year, leading voluntary organisations make it clear that universal credit has not yet been fixed. It was introduced in Bootle in October and in Wirral in November, and over the year it will spread to the rest of Merseyside, finishing with Everton and West Derby in December, at least if the Government stick to the current timetable. I want to underline the point that food poverty is just one aspect of the pressures that people on very low incomes face. They can face appalling choices such as whether to heat their home or go hungry. Parents may skip a meal so that their children can eat. Those are choices that no one should have to make. The British Medical Association and the Royal College of Paediatrics and Child Health highlighted the link between poverty and poor diet in reports last year, and went on to point out the impact on health not just in childhood, important though that is, but over a much longer period.
The Government do not collect or publish statistics on the number of people seeking help from food banks, despite years of pressure to do so from the Opposition and voluntary organisations. The Trussell Trust, the largest organisation of food banks in the UK, does not seem to find it a problem, and nor have any of the organisations that I have contacted for help on Merseyside, so I ask the Minister once again whether the Government will produce statistics on the number of people receiving help from food banks. We need to know not just how many people seek help but for how long. The Trussell Trust statistics show that in 2016-17, 37,000 adults and 24,000 children were helped by their Merseyside food banks.
The situation varies across Merseyside. Areas such as Birkenhead, Liverpool and Knowsley have the highest rates of poverty, but it is also striking that in my constituency the demand for help has grown even in some relatively affluent areas. In 2017, Wirral food bank distributed 109 tonnes of food. In the north-west as a whole, between April and September 2017, Trussell Trust food banks gave more than 87,000 three-day food supplies to people in crisis, compared with nearly 78,000 during the same period in 2016. That is a 12% increase. The Government commissioned a report from the University of Warwick, which was published in 2014, and one of the points that it made was that people seek help from food banks as a last resort. The fact that so many people are in that situation should be a major concern.
Many of my colleagues have spoken clearly about the reasons why people turn to food banks. The Trussell Trust found that of the people accessing its support 43% did so as a result of benefit delays and changes and 27% did so due to low income. Those are things that the Government can take action on, as my hon. Friend the Member for St Helens South and Whiston pointed out. The length of time for which people wait for an initial universal credit payment has been a major reason for social security delays, if by no means the only one. That also increases the likelihood that people have to turn to a food bank more than once.
Last April the Trussell Trust warned that food banks in areas where the full service of universal credit had been introduced in the previous six months had a 30% average increase in requests for help compared with a year before. From this month, people will be able to ask for a 100% advance on the first payment, and from February the initial five-day waiting period will be removed. Will the Government make a commitment to publish regular statistics on whether they are meeting the new target of five weeks for initial payments, as well as figures for the number and percentage of claimants asking for advances, so that we can have an idea of how far removing the five-day waiting period is affecting the need for advances?
If people are sanctioned, they can be referred to a food bank by the Department for Work and Pensions. The latest statistics for sanctions published by DWP show that the sanctions rate for universal credit increased by more than 3% in the last quarter. Will the Minister look seriously at introducing a yellow card system and non-financial sanctions, as suggested by the Work and Pensions Committee, to help to reduce the number of people who need help from a food bank? Ten per cent. of the people who sought help from Wirrall food bank last year were in employment. That is one reason why it is so important for the Government to reverse the cuts to work allowances for universal credit. Will the Minister urge his new colleagues to do that?
A study published by the University of Oxford for the Trussell Trust, in June 2017, found that people using food banks were likely to belong to groups that are most affected by recent reforms to social security: disabled people, lone parents and large family households. Those groups are particularly affected by universal credit and the changes introduced last April. In the study, more than 50% of households that had received help from a food bank included a disabled person. Mental health conditions affected people in a third of the households. The basic disabled child element in universal credit is half that of the disability element in child tax credit. There is no severe disability premium in universal credit, which means that disabled people who would have been entitled to it will be £65 a week worse off than tax credit recipients.
My hon. Friend makes an important point, and for many disabled people, the need to heat their home is also a bigger element in their weekly bills.
Will the Government reverse the cuts to support for disabled people in universal credit? Those cuts will have an increasing impact as universal credit is rolled out to a wider range of claimants. Lone parents and their children constitute the largest number of people receiving help from food banks overall. A study for the Equality and Human Rights Commission found that lone parents were set to lose around 15% of their net income on average—around £1 in every £6—and that households with three or more children could lose as much as £5,400 per year. Will the Government look again at reversing the two-child policy, and heed the warning from the Resolution Foundation that cuts to the work allowance could act as a disincentive for some lone parents to work additional hours, once they have entered employment doing a smaller number of hours at the start?
The Government recently announced that children would be eligible for free school meals if their family’s income was £7,400 per year or less, excluding social security. That creates a cliff edge in universal credit, which could create a disincentive for people to work additional hours—that has always been the Government’s argument against tax credits in general. Free school meals are worth £2.30 per child per day, which over a 38-week school year works out at £437 per child. The Resolution Foundation has calculated that crossing the threshold by earning more than £7,400 a year would effectively mean losing £11 a week in income, and it would take £30 of earnings to claw that back, given the universal credit taper rate. Eligibility for free school meals is another area where families lose more the larger they are. People in insecure work whose income may fluctuate from week to week could face a difficult choice. Will the Government act to avoid families being put in that situation by removing the cliff edge and ensuring that all children in families who receive universal credit are eligible for free school meals?
To conclude, let me underline the seriousness of the situation. New figures this morning show that food prices are still increasing by more than 4%. There is a freeze in key working age benefits until 2020, and wages are stagnating for those in work, particularly those on low incomes. Universal credit is far from fixed, and aspects such as the low level of support for disabled people and the cliff edge for eligibility for free school meals have received much less attention. The Government should act to fix those problems with universal credit at an early stage before people are driven into extreme poverty, and they should return to the original principles of universal credit to ensure that work always pays. They need to tackle poverty, not push families into it.
Just as people are experiencing multiple forms of destitution, there may be more than one reason why someone is forced to turn to a food bank for help. If those groups most likely to use a food bank—disabled people, lone parents, and larger families—are also those who have been hit the hardest by cuts to social security support since 2012, and by cuts to local authority spending and a reduction of services in their areas, then the social security net is clearly not doing the job it is designed to do. It should be protecting people in their time of need.
It is a pleasure to serve under your chairmanship, Sir David, in this important debate—my first as Minister for Employment—and I congratulate the hon. Member for Liverpool, West Derby (Stephen Twigg) on securing it.
The Prime Minister is absolutely clear: the Government are committed to building a country that works for everyone, where no one and no community is left behind. I would like to think that all Members of the House share that ambition. I completely agree that we need to provide appropriate support for the least well-off and most disadvantaged people in our society, and we must do all we can to improve their lives and the lives of their children. Part of that is making sure that people get help with the cost of living.
Perhaps I may make a little progress—there will be plenty of time to intervene.
The introduction of the national living wage has given the UK’s lowest earners their fastest pay rise in 20 years. With the increase in personal allowances, the Government have cut income tax for more than 30 million people and taken 4 million low earners out of income tax altogether.
The Minister speaks about the income tax threshold, but does he realise that most of the people we are talking about are on zero-hours contracts and really low pay, and they do not pay income tax? None of those tax giveaways have any effect on their weekly income.
Perhaps I may make a little progress, and hopefully I will provide some of the answers that the hon. Lady is looking for.
We plan to further increase the tax-free personal allowance to £12,500 by the end of this Parliament. Working parents are now entitled to up to 30 hours of free childcare, saving them around £5,000 a year. I hope that, whatever our political differences, all Members of the House will welcome those measures. We have also frozen fuel duty, saving the average car driver £850 over the last eight years, compared with the pre-2010 fuel duty escalator.
The information the Minister provides is, of course, welcome, and we are familiar with those announcements. Does he agree that the people in Liverpool, and Merseyside generally, who are going hungry—the people to whom Labour Members are referring today—are those who are, in the words of the Prime Minister, “left out”? What is he going to do about it?
Let me come on to that—there is plenty of time left in the debate.
The basic state pension is now at one of its highest rates relative to earnings for over two decades, reversing the trend of decline that we saw between 1997 and 2010. Ultimately, however, work is the best route out of poverty.
I thought that the hon. Lady would react as she did, but she should not take my word for it. Let me quote from a recent report by the Joseph Rowntree Foundation:
“People who live in workless households have much higher rates of poverty than those who live in households where at least one person is in work… Rising employment, skills and pay contributed greatly to reductions in poverty over the last 20 years.”
Perhaps the Minister will allow me to try again. One of the main reasons that people go to food banks in Liverpool is low income. The income they get comes from work—they are working-age people who are working but do not have enough money to feed their families. The Joseph Rowntree Foundation report is about a countrywide situation. I am talking about what is happening in Liverpool and to my constituents. A lot of people are in work but cannot afford to feed their families on the income they receive. It is simply not good enough for the Minister to say that that is not a problem.
I did not say that it is not a problem, and of course I want to ensure that everyone, both in Liverpool and across the country, gets the help they need.
Adults in workless families are four times more likely to be in poverty than those in working families, and children who live in workless households are five times more likely to be in poverty than those in a house where all adults work. We want to see more people in work, and we want to support more people into work. In recent years, the Government have undertaken the most ambitious reform to the welfare system in decades to ensure that work always pays. This reform is already delivering real and lasting change to the lives of many of the most disadvantaged people in our society. Nationally, there are almost 1 million fewer workless households than in 2010. Indeed, workless households are now at an all-time low. In the north-west, the region that many Opposition Members represent, there are around 87,000 fewer workless households than there were seven years ago.
I am grateful to the Minister for giving way. In a sense, he is answering the earlier question, because if the numbers of workless households are going down, yet food bank usage is going up, surely we have a real challenge about families where people are in work still having to access food banks, because of low pay and insecure work.
I know that this a very emotive subject and I understand that hon. Members are keen to get answers. I will seek to provide some of those if I may make progress. The latest data shows that the employment rate in the Liverpool city region has seen a 4.1 percentage point increase since 2010 and the comparable national figure shows an increase of 4.2 percentage points.
We have had a discussion about food poverty and more generally about poverty rates. The case is, whichever way you look at poverty rates—relative or absolute; before or after housing costs—none are higher than in 2010. The proportion of people in absolute poverty is at a record low. Across the country, there are 600,000 fewer people in absolute poverty compared with 2010, and in the north-west there are 100,000 fewer people in absolute poverty compared with the three years up to 2010.
Of course, we want to do everything that we can to make sure that those numbers go down further. Let me explain what we are doing in welfare reform to make that happen.
The Minister is being very generous with interventions. Given the statistics he has read out, which are trying to show that things are getting better in terms of poverty reduction and more people being in work, can he please explain why the number of people on Merseyside who are having to access food banks in order to eat and to feed their families is still going up?
I will come on to that point, but there are complex reasons why people use food banks. I want to go back to the point about work being the best route out of poverty. It is the case that across the country around 75% of children from workless families moved out of poverty when their parents entered full-time work.
Let me come on to universal credit.
I will make some progress. I have taken a lot of interventions. Perhaps the hon. Lady will let me continue for a moment.
When it comes to reform, universal credit lies at the heart of transforming the welfare system. Universal credit supports those who can work and cares for those who cannot, while being fair to the taxpayer. [Interruption.] I would just say to the hon. Member for Garston and Halewood (Maria Eagle) that before this role I was the Housing Minister and I had the opportunity to do an engagement tour around the country, meeting social housing tenants with the aim of producing a Green Paper, and I met around 1,200 social housing tenants across the country. There was a discussion around universal credit and I have to tell hon. Members that the vast majority of people I talked to felt that, in principle, universal credit was absolutely right: it is simple, it makes sense and it helps to deliver the benefits that people need on a timely basis. I will come on to talk about the changes that were introduced in the Budget, because we always want to ensure that things can be done better.
No. If I may, I will continue for the moment.
There is always a comparison of universal credit with what came before. It is the case that, because of withdrawal rates, tax credits encouraged lone parents to work for 16 hours and couples to work only 24 hours a week between them. Universal credit provides the opportunity for the first time to support people who are in work to progress, so that they can increase their earnings and become financially independent. We have reduced the universal credit taper to 63%, so that people who progress into work can keep more of what they earn. Under universal credit, work always pays.
I have to disagree with the hon. Lady’s comment from a sedentary position. It does, because for every extra hour people work, they get to keep more of the money they earn.
Universal credit claimants are able to find work faster and stay in work for longer than those under the system it replaces. Indeed, 86% of people under universal credit are actively looking to increase the hours that they work, compared with only 38% on jobseeker’s allowance.
We have to ensure that help is provided as people seek to find employment. The Government are providing a wide range of support targeted to each individual’s personal circumstances. Under universal credit, people have access to more tools than ever before to underpin their work search and help with budgeting, digital skills, preparing CVs and getting ready for job interviews.
The Minister is obviously ranging somewhat more widely on universal credit. Will he respond to the very specific question that the shadow Minister and I raised about the cliff edge in the rules in universal credit that relate to free school meals? Will he and the Government look again at a very significant negative side of the reform?
The hon. Gentleman knows that free school meals are universal for all children from reception to year 2, and currently all children who are the offspring of universal credit claimants are entitled to free school meals. There has been a consultation, which has closed, and the Department for Education will respond.
I am undertaking a programme of visits to jobcentres across the country. It is important for me as the Employment Minister to talk not only to the people who work in those jobcentres, but to those people who are there as customers. Last week, I visited the jobcentre in my local area, Reading, twice, first to talk to the people who run it; and secondly to talk to individual claimants. I sat in on one of the interviews and asked one of these ladies what she made of universal credit. She said:
“Universal credit is amazingly simple.”
Those are not my words, but the words of an individual who went—[Interruption.]
That is the word of an individual who actually has made use of the system.
Ensuring that people get the benefits they are entitled to is important. Whether in work or not, jobcentre staff help their customers to ensure they access their full entitlement to benefits and any other support, such as free school meals and free prescriptions. They also have tailored support for those people who face the most complex employment barriers. That can include temporarily lifting requirements where claimants are homeless, in treatment for drug or alcohol dependency, or victims of domestic abuse.
The hon. Member for Liverpool, West Derby raised a point about people having delays in getting money paid to them. The statistic on universal credit is that 92% of all claimants get all the money they are due paid on time. Of course, no one wants to wait for money if they need it—advances can be claimed on the same day in an emergency.
Hopefully I will have enough time to respond to that point—I believe the hon. Lady is talking about the higher rate of disability premium.
A number of other points were raised about food banks. Jobcentre staff also work in partnership with a variety of local agencies and signpost claimants to local services, including food banks, to help them access the full range of support available. The hon. Member for Liverpool, West Derby quoted from a report from 2016 by Taylor and Loopstra based on UN data. There are a number of reports, including one on income and living conditions produced by Eurostat, which found that the UK has a lower percentage of food insecurity than the EU average and a lower percentage than Germany, France and Italy. Ultimately, we need to ensure that we get help to people who need it, and that we help them into work so that they can support themselves.
I have given way quite a lot in this debate. If I may, I will continue. If I have time at the end, I will of course take further interventions.
Food inflation has been discussed. Food prices have fallen in three of the past four years, which has a positive impact. Let me address up front the question about the use of food banks. The Government do not propose to record the number of food banks in the UK, or indeed the potential number of people using them or other types of food aid. There is a range of available food aid—from small local provision to regional and national schemes—and the all-party parliamentary group on hunger, which set up an inquiry to thoroughly investigate the use of food banks, said that there were numerous complex reasons why people use food banks.
Jobcentres engage regularly with the Trussell Trust, and are encouraged to foster good relationships with local food banks. In Merseyside, all jobcentres have a food bank single point of contact, and jobcentre staff have been working actively with food banks to ensure that staff are up to speed with the changes resulting from universal credit.
The hon. Member for St Helens South and Whiston (Ms Rimmer) mentioned international comparisons. I refer her to statistics produced by the OECD showing that, since the mid-2000s, the UK has been one of only two major advanced economies with increasing redistribution. It found that, since 2010, growth and income from work for the lowest-income households in the UK is higher than in any other major advanced economy.
The Government have always been clear that universal credit would be introduced in a way that allows us to continue making improvements. That is why, at the autumn Budget, we announced a comprehensive and wide-ranging package of measures worth £1.5 billion to address concerns about the first assessment period and the budgeting issues faced by some claimants at the start of their claim. Since the start of this year, claimants have been able to get 100% of their estimated universal credit payment up front as an advance that they can pay back interest-free over 12 months.
I will address a couple of other points, as I have a few minutes. On the point about disability payments, as the hon. Member for Wirral West (Margaret Greenwood) knows, income-related employment and support allowance and the link to disability premiums, including the severe disability premium, are being replaced by universal credit as part of simplifying the benefit process and to address overlaps. Universal credit has two disability elements for adults, mirroring the design of ESA. The higher rate is set substantially higher than the ESA support component equivalent.
I am happy to have a dialogue with the hon. Lady, particularly in my new role, but I point out, as I have said, that the rate is set substantially higher than the ESA support component equivalent. However, I am happy to enter into a dialogue with her outside this debate.
The Minister has spent most of his time replying to this debate talking about universal credit, but the debate is about food poverty. Is he suggesting that, over the next year, as universal credit is rolled out on Merseyside, the number of people having to visit food banks will go down?
I cannot predict the future. The reason why I have talked about universal credit is that it is a matter raised by Opposition Members, and because I think that it is important, if we talk about welfare reform, to talk about the current reforms that the Government are putting in place.
In conclusion, the Government’s track record on helping people into work is clear. Unemployment is at a 42-year low at 4.3%, with nearly 1 million fewer workless households than in 2010. Incomes have been rising. Data published last week by the Office for National Statistics showed that in the year 2016-17, real average incomes of the poorest fifth of households had risen by £1,800 since 2007-08.
However one looks at it, poverty rates in the country—relative or absolute, before or after housing—are no higher than in 2010, and within the working-age population, all headline poverty rates are lower than in 2010. Yes, there is absolutely more to do—we certainly cannot be complacent, and I have no wish to do so—but the Government’s reforms have demonstrated real progress in tackling poverty and disadvantage.
The Minister just said that he does not wish to be complacent, but with all respect to him, I must say that that was a very complacent response to the debate. In particular, he did not address the fundamental question at the heart of the debate, which I posed at the beginning of my speech and other colleagues raised, about the eightfold increase in the number of people using food banks in 2017 compared with 2011.
The Minister said that the all-party group on hunger has said that the causes of increased use of food banks are complex. Of course they are complex, but several of us cited the research, which he did not dispute, suggesting that the major two reasons are low pay and insecure work on one hand, and benefit changes and delays in the benefit system on the other. I hope the Government will reflect on the points raised by Members from across Merseyside. There is anger and passion on the Opposition side of the House. We are reflecting the anger and passion in our own constituencies about the sense of injustice and inequality, and the poverty that people face.
The Minister addressed some of the specific points raised by several Opposition Members. I note in particular what he said about free school meals. I and others will pursue that with the Department for Education, because the threat of that cliff edge will be damaging to communities. Clearly, as a number of my hon. Friends have said during this debate, this is a major issue that is not going to change.
There is a fear that, as universal credit is fully extended across Merseyside, our communities will face greater levels of debt and greater usage of food banks. The bedroom tax, an issue to which I referred briefly but which featured less in this debate than it often does, has undoubtedly contributed to insecurity and debt for many of the communities that we seek to represent.
I am pleased to have had the opportunity to air these important issues. I hope the Minister and the Government will go away and reflect on what we have said, but I return to the fundamental point: the evidence shows us that the eightfold increase in the use of food banks has to do with low pay, job insecurity and poor-quality work, but also benefit delays and changes. The Government need to look again at those issues.
Question put and agreed to.
That this House has considered food poverty in Merseyside.
Mobile Phone Contracts
I beg to move,
That this House has considered mobile phone contracts.
A mobile phone has pretty much become a necessity for all of us. Even though we might often wish that we did not have one, we all rely on them to a certain extent. It is just the modern way that we live our lives. I am sure that, like me, the Minister is deeply concerned to hear of the report from Citizens Advice that too many loyal mobile phone customers are being ripped off—I use the term advisedly—by their providers. The research by Citizens Advice showed that people buying a phone through their contract pay an average of £22 a month towards their mobile phone handset. Many people take out a mobile phone contract that includes the cost of a new handset in the overall price of a fixed-term deal, the majority of which are for two years. At the end of that deal, consumers have the option to stay with their network on the same contract, to take out a new contract, or to move to another provider.
However, 36% of mobile handset customers stay on their previous contract after the fixed 24-month period. On average, they stay for an extra seven months. If they are customers with one of the bigger mobile phone providers that dominate the market, however, the chances are that the price they are charged each month will not change. That means that consumers continue to be charged for their handsets, even though they have already paid for them during their two-year contract.
Most providers do not tell the customer how much of their monthly bill goes towards their handset, and how much pays for data and calls.
Sitting suspended for Divisions in the House.
[Mr Philip Hollobone in the Chair]
Thank you, Mr Hollobone. As I was saying before the Division bell sounded, the fact is that most providers do not tell the customer how much of their monthly bill goes towards the mobile handset and how much is paying for their calls and data. Citizens Advice has discovered that three of the four largest mobile providers continue to charge customers for a handset after the cost of the handset has already been paid during the term of the fixed deal. That means that loyal customers who choose to stay on the same phone plan after their fixed deal ends see no reduction in their bills. They continue to pay, unwittingly, for a handset for which they have already paid.
Who is most likely to be caught up in this so-called loyalty trap? Those aged over 65 are most likely to be stung, with 23% of over 65s with a handset-inclusive mobile phone contract staying in their contract for more than 12 months past the end of their fixed deal period, compared with only 13% of people aged under 65. Worse still, if someone does not switch they cannot tell how much their handset is costing them, and whether they are getting a good deal or not. Indeed, the total cost of a handset as part of a bundled contract can vary considerably, even among plans offered by the same provider. In some cases, the price difference can be as much as £400. Of the 706 bundled contracts analysed by Citizens Advice, 74% were more expensive than buying the same handset up front and using it with a SIM-only contract, which is quite astonishing.
Three, one of the largest mobile phone providers, has been in touch with me. That company recognises that the way the market is currently organised means that mobile bills lack transparency and are difficult for consumers to comprehend, which in turn leads to them paying more than they should—that is, more than they need to—for their mobile phones.
I congratulate the hon. Lady on securing the debate on an issue that affects my constituency and all others. Does she agree that the thirst for the latest phones means that many people buy themselves out of a contract at a massive financial cost, and that we—or perhaps the Minister—should look at whether the way in which the industry works out the buy-out clause for contracts can be made fairer, and not to the advantage of the mobile companies?
There is, indeed, a range of issues with mobile phone contracts. The real concern is when a consumer is paying for something for which they have already paid, but the hon. Gentleman is absolutely right that mobile contracts need to be seriously looked at.
For consumers, the way to get transparency is to separate out costs so that they can see clearly what they are paying for. In any other industry, that would not be controversial. Some people have pointed out that regulations are an obstacle in the way of separating out those costs because they would require the mobile phone companies to become regulated creditors under the Financial Conduct Authority. Some argue that that would be bureaucratic, burdensome and complex for the mobile phone companies, as they would have to comply with the Consumer Credit Act 1974. However, that need not be the case, since there is a well-established precedent, of which I am sure the Minister is aware; exemptions from full regulation under the Consumer Credit Act are given to appropriate sectors, especially for loans with an annual percentage rate of zero.
The Financial Services and Markets Act 2000 created an exemption from the Consumer Credit Act regulations for providers of 0% APR loans of up to four months. That was raised to 12 months—the current limit in 2015—through a statutory instrument, to allow insurance companies to offer monthly payments for annual plans. Perhaps the Minister will consider raising that limit further to 24 months, to allow mobile phone operators to offer separate mobile handset financing. That would make bills more transparent for consumers, since handset and service contracts would then be separated. Given that it would be prohibitively expensive to ask consumers to pay off their handsets in 12 months, raising the current 12-month limit to a 24-month exemption in the Consumer Credit Act would offer a way forward. It has been done successfully in countries such as Germany and Australia, as well as other countries, so there is no reason why it could not be done here.
O2 has told me that it is the only operator to separate the cost of mobile phones from the airtime on consumer bills and that when a consumer has paid off his or her mobile phone, all charges for it are stopped. That leads me to wonder why one such company can manage such transparency in its billing but others do not seem able to. I am sure the Minister is wondering that as well.
We must make it as easy as possible for those companies who engage in this blatant, unfair and unjust overcharging of customers to stop doing so and remove all the so-called obstacles and hiding places. In no other industry would such blatant ripping-off of the customer be tolerated; it should not be tolerated in the mobile phone industry either. Indeed, it undermines consumer confidence and trust in the entire industry, which is unfair to those players in the industry who play fair by the consumer.
Too many consumers in too many sectors endure a “loyalty penalty” and mobile phone charges are symptomatic of a wider problem. Indeed, in the wider telecoms market, people experience a persistent and ingrained level of detriment. We should be grateful for the sterling work of Citizens Advice, who I pay tribute to today, as its research has uncovered the fact that people experience 27 million problems with their mobile, broadband or TV services per year and those problems cost people £4.2 billion a year in wasted time and money. It is simply not good enough.
As the Minister will be aware, we currently have very powerful voices in the telecoms industry, with no independent voice speaking up for consumers. The telecoms industry has vast resources to expend on lobbying the regulator. It is time for the consumer’s voice to be heard.
The Minister will also be very aware that in their 2017 manifesto, the UK Government made a commitment to make telecoms billing fairer and easier to understand for consumers, including clarifying when the cost of a mobile handset has been paid off by the customer. That is not difficult to do. It can be done by statutory instrument, as I have said.
In a letter of 17 November to me on this issue, the former Minister of State for Digital told me that he hopes
“that providers will now take the initiative by clearly separating the cost of handset and tariff in mobile contracts”.
In Ofcom’s response to me of 8 November, it said that it wanted to help people to
“shop around and secure the right deals”.
But unless costs are separated out and mobile operators are forced down that path, consumers cannot and will not know what deals are the best value for money. We cannot rely on the goodwill of the mobile phone operators, because that has not worked. Action is needed and I have offered a way forward, which I urge the Minister to adopt.
The responses from the former Minister for Digital and Ofcom, although well-meaning, do not go far enough. In fact, the responses give me cause for concern—I am a bit alarmed—because they both, in their different ways, suggest that the mobile phone companies can decide if and when they take action on this matter. I would argue that the Government and the regulator must act urgently to protect consumers from being ripped off. When someone unwittingly pays for the same product twice, make no mistake: that person is being ripped off.
With inflation running high, as it has done for a number of years, and with a continuing squeeze on living standards, it is only right and proper that consumers are treated fairly and are able to see more easily what they are paying for, so that they can properly compare prices. I urge the Minister to set out a clear timetable to implement what she and her Government have publicly said they believe. That can be done very soon, very cleanly and very quickly, by statutory instrument. It is needed so that there can be no excuse or hiding place for mobile companies that continue to charge mobile phone customers for something that they have already paid for. It is time to redress the imbalance between the powerful voice of industry and the weak and too-often ignored voice of the consumer. It really is time to act.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate to highlight this important issue and on her passionate speech, which I listened to with great interest.
I am delighted to have responsibility for championing the interests of digital consumers as part of my new role at the Department for Digital, Culture, Media and Sport as the Minister for digital and creative industries. In my previous role, I had responsibility for small business and consumers, which included retail energy markets and competition law, so I have some experience of the type of issues consumers in this market face, as well as of some of the potential solutions.
The hon. Lady mentioned the Citizens Advice research in her speech, and I pay tribute to Citizens Advice, with whom I worked a great deal in my former job. It does a marvellous job and has been pursuing this issue with the Government, Ofcom and the mobile phone operators over the last 12 months. I have reviewed its research with interest.
Ofcom estimates that about 1 million people continue to pay the full monthly charge after the end of their contract rather than switching to a cheaper deal and that those people could collectively be overpaying by £130 million per year. That is far too great a scale of consumer detriment for us to live with. It represents too many people paying more than they need to, by continuing to pay for the cost of a mobile handset when they should no longer be doing so—essentially after they have paid for it. Many of those people are more vulnerable consumers, including older people—the hon. Lady referred to the difference between the percentage of older people who were continuing to pay for their handset after it had been paid off—and those in lower income segments. Some people may just be very busy. The Government recognise that action is needed.
Ofcom estimates that the issue affects a minority of customers with a mobile phone contract, approximately 6%. In percentage terms, it is a small minority, but it amounts to about 1 million people, which is no small number. On the plus side, we have a highly competitive market in telecoms, which is good for consumers, and we should recognise that fact, as well as working tirelessly to address those areas that work less well.
There is a highly competitive market, but for many of the vulnerable consumers we are talking about—many of whom are elderly or possibly without access to the internet—the landscape is extremely confusing. The onus should be on the phone companies to help those customers get the best deal.
I recognise what the hon. Lady says and I quite agree. I found the same thing in respect of the energy market; I am well attuned to that fact. For the sake of completeness, I wanted to mention some of the positive things that are happening, which I accept may be less accessible to some older consumers.
The Digital Economy Act 2017 included several measures that are helping Ofcom to empower and protect consumers. Of particular relevance is that the legislation included help for Ofcom to set switching rules for communications services. As a result, Ofcom has recently announced the implementation of a new text-to-switch process for all mobile customers. Consumers will be able to send a free text to their current provider to request a switching code that they give to their new provider for a timely and seamless switch. The change will make switching much quicker and easier for consumers and will go some way towards addressing the issue that the hon. Member for Glasgow North West (Carol Monaghan) raised. The measure must come into effect no later than July next year.
We recognise that we may well need to go further. As the hon. Member for North Ayrshire and Arran said, in our manifesto we set out our commitment to make billing for telecoms customers fairer and easier to understand. In my opinion, that means it must be more transparent. That includes making it clearer when a customer has paid off the price of their handset and is in a position to switch to a cheaper deal, saving them money. She emphasised how important it is for the Government to work with Ofcom, mobile providers and other stakeholders, such as Citizens Advice, to resolve the issue in a way that helps people save money. I assure her that my Department has already been working with all of those parties, and I am committed to continuing that engagement.
I have not come to any firm conclusions about the best solution to this issue. I will listen to the views of all stakeholders—in particular, to those expressed by the hon. Lady in this debate—and we will work in partnership with Ofcom and the mobile providers to get a fairer system with lower prices. I am clear that any solution we develop with Ofcom and the mobile providers must stop people languishing on their mobile phone contracts after their contract period has ended. We want the savings that are their due to be returned to them. Importantly, any solution needs to address the needs of all consumers—particularly those who are older and most vulnerable.
Although I have not come to a settled view on the matter yet, I agree with the hon. Lady that what has gone on so far—there has been an over-reliance on the mobile phone providers putting their house in order—has not worked to my satisfaction, given that 1 million people are still overpaying.
I am aware that some stakeholders would like to see the end of bundled mobile phone contracts, and want all contracts to be split, with the cost of the handset split out from the cost of services. The pricing of split contracts can be more transparent for consumers than bundled contracts, although split contracts are not without consumer issues. At the moment, providers can make a commercial decision to offer split or bundled contracts, or a choice. A number of mobile phone providers now offer only split contracts and others, such as Tesco Mobile, continue to offer both split and bundled contracts. Other groups, such as EE, Vodafone and Three, offer only bundled contracts. As I said earlier, it is a highly competitive market, in which consumers have a wide degree of choice, including in relation to whether to opt for a bundled or a split contract. However, I accept that when people who are not knowledgeable about the complexities of the market are dealing with a household name that offers only a bundled contract, that is not a great deal of help.
Consumers may choose bundled contracts because they continue to offer good value for money for many consumers. Ofcom research from last March found that such contracts are particularly good value for mobile users with medium to high usage, but such deals can obscure overcharging, as the hon. Lady so ably highlighted. We are therefore prepared to intervene if we deem that to be the only way to resolve this issue. I am committed to preventing people from paying too much by remaining on the same bundled contract after the end of the contract period. No one should continue to pay for a product that they have already paid off. Ofcom, our independent regulator, is continuing to monitor this issue closely. I expect to see movement to address this issue from the mobile operators.
I remind hon. Members that this year the Government will publish a consumer Green Paper, which will explore further ways we can help to protect, support and empower consumers, including those in the mobile communications market. I very much agree with the hon. Lady’s remark before we suspended for all the votes that mobile telephony has become a crucial utility that most people simply cannot do without.
I reiterate my thanks to the hon. Lady for securing this debate, and I thank all hon. Members who contributed to it. I will leave her a few minutes, if she requires them, to make a few closing remarks. Before that, I reaffirm my commitment to work with Ofcom, the mobile providers and organisations such as Citizens Advice to address this issue and broader issues in the telecoms market that consumers face.
King’s College Hospital
I beg to move,
That this House has considered King’s College Hospital finances.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am pleased to have secured this debate on the finances at the King’s College Hospital NHS Foundation Trust, which I have been seeking for some months. It has been clear to me that the trust has been heading towards a crisis, which came to a head shortly before Christmas, when NHS Improvement took the trust into financial special measures. The debate is therefore timely.
To date, the Government have responded to the crisis at King’s as if the problem has arisen suddenly in the short term. I want to use this debate today to set out clearly the causes of the problems at King’s, which can be traced back to 2010 and 2013. I also want to ask the Minister to take seriously the complexity of the current situation at King’s and to take action now to allow it to stabilise and rebuild. There is ample evidence of a crisis across the whole of our NHS this winter, and I want to emphasise that the situation at King’s is a warning sign for the NHS that the Government must heed.
My relationship with King’s goes back 20 years. I have been a surgical patient and an out-patient at the hospital. I gave birth to my children there. Both were delivered by the same amazing midwife, whose name we chose as a middle name for our second daughter. My mum worked at King’s for 10 years until she retired. The situation at King’s is as personal and as important to me and my family as it is to tens of thousands of my constituents.
King’s is an extraordinary hospital. As a major teaching and research hospital, it undertakes world-leading work across more specialisms than any other hospital, including liver transplants, maxillofacial surgery, foetal medicine, neurosurgery, neonatal intensive care, cardiology and sexual health. As a major trauma centre, the emergency department saves the lives of critically ill and injured patients every single day. The work of its trauma surgeons is pioneering. Together with the specialist nurses, anaesthetists and other clinical staff, they were at the frontline of treating critically injured victims of the Westminster and London Bridge terror attacks and the Grenfell Tower fire.
In south London, we are enormously proud of King’s specialisms and its major trauma centre, but it is also our district and general hospital, where people have antenatal scans, give birth, have their appendix removed, have hips and knees replaced, have broken limbs fixed, have cataracts removed, recover from strokes, and receive help to manage diabetes, sickle cell disease and many other health conditions. King’s has a very special place in our community. I pay tribute to the extraordinary skill, commitment, dedication and care of the 15,000 staff at King’s. I have spoken to many staff in recent weeks. All of them, including the consultant with 32 years of experience I met yesterday, say that things have never been tougher. I want to put on the record my gratitude for everything they continue to do.
My constituents are desperately concerned about the plight the hospital currently faces. King’s has been on a journey over the past 20 years. Back in 1998, when I was an in-patient, it was a struggling, failing hospital, where patients were treated in overcrowded conditions and waited on trolleys in accident and emergency. Years of Labour investment transformed it, so that by 2010 it was meeting all of its main clinical targets, had recruited many more staff, and was consistently achieving a small financial surplus each year.
I am concerned that, despite the incredibly hard work of the brilliant staff at King’s College Hospital, that journey has come full circle—the days that we thought had been left behind at King’s have now returned. The hospital is regularly more than 100% full, with meeting rooms and storage space being used for beds; it has been consistently failing to meet the four-hour waiting time target in A&E, or the 18-week referral-to-treatment target; and it is not meeting its key cancer targets.
I want to be absolutely clear with the Minister that the causes of the problems at King’s have roots that go back to events in 2010 and 2013, which could have been predicted by the Government and Monitor, and which absolutely should have been prevented. I draw the Minister’s attention to four key issues. First, the rate of funding increase for the NHS was significantly cut from 2010, from 3% to 4% under the previous Labour Governments to 1% under the Tory-Lib Dem coalition Government. There was therefore no way that the funding was ever going to keep pace with inflation, let alone increases in drug and treatment costs and increasing demand. The fact that we are all living longer is a positive thing, but since older people use health services far more than younger groups in the population, it creates an entirely foreseeable increase in the need for health services. That can be managed and minimised when good-quality social care is available to everyone who needs it, but over the same period £6 billion has been taken out of social care. At the Princess Royal University Hospital, which is part of the King’s trust, 20% of older patients are clinically fit for discharge but have nowhere to go—a direct example of the extra burdens that the Government’s inadequate approach to social care is having on the NHS. The false economy cuts are simply adding to the pressures in our NHS, as people who should be able to maintain their health at home with good support end up requiring acute care.
The second key issue affecting King’s is a result of the 2013 decision for it to take on two hospitals—the Princess Royal University Hospital and Orpington Hospital—from the failing South London Healthcare Trust. Following that decision, the Government and Monitor should have insisted on a review period to ensure that the new expanded trust had the right level of support and resources to run the hospitals, but they did not do so. From that moment on, the finances of the new trust deteriorated rapidly. The situation at the Princess Royal was far more complex than anticipated, but there was no review of funding in the light of new and more detailed information about the level of investment required. That 2013 decision fundamentally destabilised the finances of the trust.
The third issue is the challenge of the competing responsibilities of emergency care, including the trauma centre and elective surgery. The King’s trauma centre generates its own demand, which increases year on year, but the funding for emergency medicine is by way of a block grant. There is no increase in funding that is in any way responsive to that demand. It cannot be right that, when King’s staff step up to the plate in response to terror attacks or the Grenfell Tower fire, there is no additional funding to cover the costs of the additional work. Elective surgery is paid for by procedure, so when the demands of emergency admissions, whether because of an increase in flu cases, or a major incident, force elective operations to be cancelled, there is loss of income in addition to an increase in costs. That creates knock-on financial consequences for the trust as a whole.
Fourthly, the limited capital funding since 2010 has meant that staff at King’s have not been able to plan strategically for the facilities the hospital needs to cope with increasing demand. The King’s College Hospital site at Denmark Hill is very constrained for a major hospital, and it has been developed piecemeal over many years. Large parts of the hospital estate are no longer fit for purpose, and additional ward space is urgently needed. King’s will open a new state-of-the-art critical care unit later this year, the largest in the country, but the trust has not been able to expand its general ward capacity, which will potentially result in additional pressures as patients leaving critical care compete with emergency admissions and elective surgery patients for insufficient beds.
The four challenges I have described have been evident for some time, but the Government’s approach, rather than to undertake a review of the finances and agree a sustainable funding settlement, has been to set more and more unrealistic targets for financial savings; to refuse King’s the sustainability and transformation funding that other hospitals have been awarded; and to fine King’s for being in a challenging financial situation.
Since 2015, at the behest of Monitor and later NHS Improvement, vast sums of money that could have been spent on patient care have been spent on management consultants. At one stage the trust was paying a single firm of management consultants more than £1 million pounds a month. The trust has been asked to make punishing savings when it has no control over the demand for its services or some of its costs, but the management consultants have not been judged on their ability to deliver sustainable, lasting improvements—theirs has been a one-way street of throwing good money after bad.
It is absolutely the case that the Government have known about the financial situation at King’s for some considerable time, yet on top of an already unmanageable financial situation, the Government proposed completely unrealistic control totals, in essence setting the hospital an unachievable target for making savings, then punishing it with financial penalties for failing to do so. Since last year, King’s has been under enhanced regulatory oversight by NHS Improvement, technically a similar situation to being in financial special measures, with NHSI staff permanently in the hospital and a high level of scrutiny.
Over the past three years King’s has made savings of more than £200 million, more than twice the average level of savings of trusts across the country over that same period. King’s has done that while maintaining standards of care that are on the whole very good. The Government have known about the financial situation at King’s for three years, the Government have been directly involved with the situation at King’s, and the Government are culpable, yet instead of taking responsibility for the situation and acting to ensure that King’s has the resources it needs, the Government have required King’s to do the impossible and punished the trust when it has been unable to deliver.
The Government must now take responsibility for the situation and ensure that the King’s College Hospital NHS Foundation Trust is not allowed to fail any further. I therefore ask the Minister to do the following: to undertake a full review of the finances at King’s, starting with an analysis of what is required to deliver safe and effective care across all areas of treatment and responsibility; to make a commitment that financial special measures will not mean just forcing through the proposed control totals, which simply cannot be met without jeopardising patient care; to guarantee that there will be no threat to any of the services provided at King’s on which my constituents and residents in the wider south London and the south-east area rely; to agree a capital funding settlement to enable King’s master plan for Denmark Hill to be implemented, so as to deliver the space and facilities the hospital needs now and for the future; to guarantee that financial special measures will not mean an increase in the interest rate that King’s is charged on its deficit; and to revise the funding formula so that King’s is not hit financially when it steps up to respond to major incidents and London-wide emergencies.
I will end with this: King’s is a special trust and some attributes of it are unique, but the pressures and challenges it faces can be found in NHS hospitals up and down the country. Until the Government recognise that and choose to make a long-term commitment to fund the NHS to provide the services our ageing population needs and to stop the outflow of NHS funds into private profits, our NHS is not safe in their hands.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I draw your attention and that of Members to my declaration in the Register of Members’ Financial Interests. It is probably worth pointing out, too, that I had the pleasure of being a medical student at King’s many years ago.
I pay tribute to the hon. Member for Dulwich and West Norwood (Helen Hayes) for securing this important debate. King’s certainly crystallises a number of the challenges faced by the NHS more generally in terms of financial pressures and those pressures manifested by difficult finances in the ability of hospitals to care appropriately for patients.
I want to pick up on a couple of the points that the hon. Lady made. I was the Minister who took through the Care Act 2014, together with the right hon. Member for North Norfolk (Norman Lamb). Through the Act, we considered and learned lessons from some of the problems in the reconfiguration of the South London Healthcare NHS Trust that failed in 2013. I am sure that the hon. Lady is absolutely right that we could learn lessons about how not to do hospital reconfiguration from how that reconfiguration was done.
I again reference the Register of Members’ Financial Interests. At the time, there was a natural synergy, in medical school terms and in other terms, developing between King’s, Guy’s and St Thomas’, and the King’s Health Partners. There is a shared local health economy between those hospitals and a shared interest in patient care. Each of those hospitals are centres of international excellence and tertiary centres of care, and are important local general hospitals for their communities. That synergy would have been a much more natural alignment of healthcare interests in that area but, unfortunately, that did not happen. Lessons have been learned from what occurred.
One of the major issues was the inheritance by King’s of the huge private finance initiative debt of the Princess Royal University Hospital, which in 2017-18 I believe amounts to about £37 million a year—about half the King’s deficit. It would be wrong to blame those running King’s for that deficit. It was very unfortunate for Lord Kerslake—I will come to him later—as chair of that trust, to inherit a de facto deficit due to that huge PFI cost.
The hon. Lady was right to talk about the rate of funding increases for the NHS being at a record low for many years. We had a very difficult economic situation in 2010, but I do not think that anybody expected austerity to last for the best part of a decade. Certainly, many of our public services are now feeling the squeeze as a result of the funding pressures that they face.
The funding pressure on the social care system has an impact on the NHS. Local government finances are in a challenging situation in many areas. Pressures on the social care system reduce the ability of the NHS to work in an integrated, joined-up way with social care and reduce the ability of hospitals such as King’s to discharge patients effectively into the community, because the resources are not there to look after them. There are also additional pressures on admissions, because there is not the preventive care in the community that a well-funded, properly integrated health and social care system would be able to provide.
There is welcome talk from the Secretary of State of a Green Paper on better integrating health and social care—I am sure the Minister will be involved, too, and I welcome him to his place and to his role. Having a sustainably funded, fully integrated system must be part of that and must be part of dealing with the challenges faced by King’s, by the local health economy and nationally.
I had not intended to speak for very long, but as I said, the example of King’s College Hospital crystallises and pulls together the overwhelming challenges faced by NHS trusts. The overwhelming majority of NHS trusts and foundation trusts are in debt. That was not the case five years ago. As in the case of King’s, many of those trusts have worked very hard to bring those annual deficits under control and to manage the additional challenges of increasing patient demand and pressure from more and more patients with multiple medical comorbidities. In 2018, there are around 3 million patients with three or more long-term conditions in England. It is a very big human challenge to look after those patients, but it is also a very big financial challenge.
The percentage of GDP in this country spent on health and social care falls well below that which is spent in many comparable western economies on healthcare. I know that the Government will look at that as part of their plans for the sustainability of the health and social care system in the Green Paper. I do not expect the Minister to talk about that in detail today, but it is well overdue and I know he will pay keen attention to that.
I had the pleasure of working with Lord Kerslake when I was in Government. He and the board did a lot to reduce what the hospital paid out in temporary staffing costs; some good work was done to reduce unnecessary expenditure on agency and other costs. It is a great shame when a very distinguished and long-standing public servant feels that, despite all their experience and their best efforts to grapple with some of the challenges of King’s finances, they need to stand down from their role because there is no other option. I am sure that Members from all parts of the House will echo that sentiment.
Some good efforts were made in 2015-16 to begin to tackle some of the hospital’s deficit and debt, but in this financial year the finances have worsened and as a result, as the hon. Lady outlined, the hospital has been put on special measures. It seems extraordinary that the hospital and the board have been put in that position when, as I mentioned earlier, one of the reasons for the hospital’s deficit is the PFI, which effectively they had no choice but to accept when they merged with the PRUH. As I mentioned, in 2017-18 that amounts to an estimated £36.9 million, which is a substantial amount of money. Without that PFI debt, the hospital would not be in robust finances but it would be in a better state to meet some of the challenges.
The problem faced by King’s and other hospitals is that when their finances become pressurised, they have to meet annual targets and the financial situation becomes paramount, patient care begins to suffer. That is not because the staff want it to suffer—staff always do their best to look after patients—but because they are not necessarily given the resources to deal with day-to-day care. There are winter pressures, but for many hospitals in debt such as King’s, there are year-round pressures.
We do not want to see more distinguished public servants who bring a vast wealth of experience to hospital boards, such as Lord Kerslake, being put in a positon where they feel that their only option is to resign. We need a better way of supporting hospitals that are in financial difficulty. In this case, part of that has to be to help King’s with some of those PFI debts. PFIs lock hospitals in for a long period of time to sometimes eye-watering and escalating repayment regimes. Sometimes the maintenance costs for the buildings are driven up even further when problems arise.
I hope that the debate provides the opportunity to look at King’s and other hospitals that have large PFI debts that are causing ongoing financial problems. I hope that that issue is looked at to help this hospital and other hospitals around the country that are in a similar position. I hope that the Minister, who I know will take to his post with great vigour, will want to make sure that some of the longer-term challenges that the NHS faces are looked at in the Green Paper for a sustainable, integrated health and care system that is properly funded. I hope that he will take that message away from the debate.
It is a pleasure to follow the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who made a thoughtful contribution to which I look forward to hearing the Minister’s response.
I thank my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) for introducing this debate. She has proved herself a real champion for her constituents. She fully recognises and champions King’s College Hospital, which many of her constituents need to use and where many others work. She is my constituency neighbour, and my constituents find themselves in the same situation. King’s is enormously important. It is an organisation of international excellence but also of local necessity. It sits at the heart of GP, primary care and social care services, and of mental health care services, both at the Maudsley Hospital and in the community. It is a pivotal part of the local community.
I will confine my remarks to two key points. The first is about the tenor of the debate. I hope Members do not treat King’s like a recalcitrant teenager who has overspent their allowance, or argue that its managers, chair or board are somehow profiting or salting away public money into offshore tax havens. King’s is doing its very best, in good faith, and all its people want to provide the very best service they can. That must always be at the heart of our debates. A tone of blaming King’s sometimes creeps in, but we should be grateful to it and thank it. On the deficit, it may be inconvenient for the Government to see figures with “King’s” written next to them going in a particular direction, but they should understand what is going on there, not tell King’s off as if it is at fault. It is doing one thing, and one thing only: trying to provide the very best care to people who use its national specialties, to regional referrals and to local people who need it. Let us always start on the footing that it is doing its best and that we are grateful to it for that.
My second point is that we need always to concentrate—I do not mean this in a cheesy way—on actual people. I baulked when I heard the Prime Minister talk about cancelled operations being “part of the plan”. Please, let there never be a plan with cancelled operations as part of it. Let us think of the situation for people. For anyone who has an operation booked, there are all sorts of things around that operation. Quite apart from the fact that it screws up their confidence and courage, they have to get time off work and, if they have a young family, their mother-in-law might have to book time off work, too, so that she can come and stay when they go in to have their operation.
An operation looks like one little entry in the Department of Health computer, but for the individual concerned, quite apart from the psychological effect of gearing themselves up for an operation and then finding it cancelled, everything is organised around it. We must not mess people’s lives around by assuming that cancelling an operation, of all things, is normal and can be used as a management tool. I hope that the Minister says that that is not at all what the Prime Minister meant, and that we will not manage our hospitals by booking operations and then cancelling them.
We must remember the human impact of longer waiting lists and cancelled operations. Someone’s hip replacement operation being postponed might be the thing that ultimately causes their job to be given to someone else. They might take sick leave and then take more, and their manager might finally say, “We’ve tried our best, but we just can’t carry on like this. We’re going to have to get somebody else in.” People lose their jobs while they are waiting for hospital treatment. Prompt treatment allows people to get on with their lives. An elderly person who is waiting for a cataract operation, for example, will not go out much, because they cannot see. They will not have the confidence to go out and meet their friends. If the operation is heavily delayed, by the time they have it they may have lost their social circle, lost what they do and become de facto housebound. For every single person who has to wait or whose operation is cancelled, there is a human cost. It is important to focus on that.
There is also the question of accident and emergency. I have watched the TV programmes and have visited King’s A&E on numerous occasions. The odd person is there just because they want to spend four hours sitting somewhere, but most people are there because they have had an accident or they have an emergency. They might have tried to find somewhere else to be seen, but they are there, and they are worried. They are often in pain, and they often have worried relatives with them. We must not drift back to the situation we had before 1997 under a Tory Government. I remember that well. People routinely spent all night on trolleys in King’s accident and emergency. I know what that situation was like, and we must not drift back to it. That would be really unfair on people. In this day and age, when much of the hospital has been rebuilt, we should not go back to that situation.
I hope the Government recognise people’s concerns. I hope that they are generous not just with their money but with their commitment to King’s; that they help it to go forward; and that they do not talk euphemistically about savings. Everyone knows what cuts are—cuts are when more people are coming through the door and there is less money per person. I thank Bob Kerslake for his work as chair, and I am disappointed that, because of the circumstances, he felt he could not stay on. I will meet the new interim chair shortly, but I hope that everyone at King’s—the staff, the management and the chair—feels that the Government are on their side and want to help them sort out the situation rather than blame them, make an example of them and talk about King’s as if it is anything other than the wonderful hospital we believe it is.
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I pay tribute to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) for securing the debate. During her time in this place, she has developed a reputation as a real champion for her constituents on a range of issues. This is not the first time that she has raised concerns about the funding crisis affecting our NHS and her constituents. Back in June 2015, she used her first contribution following her maiden speech to raise concerns about the worrying financial situation at King’s College Hospital. That makes a mockery of attempts to pin blame for the current situation on the most recent chair, who started only that month. My hon. Friend showed great foresight and prescience when she warned:
“The deficit is kept from being significantly higher only by a series of creative accounting steps taken in a vain attempt to reduce the number of negative press reports about such disastrous performance.”—[Official Report, 23 May 2016; Vol. 611, c. 355.]
My hon. Friend described her constituents’ experience as a warning sign with respect to the wider issues across the NHS about which we have heard so much in recent weeks. She highlighted that King’s College Hospital provides a wide range of specialties as well as being a trauma centre and a district general hospital for her constituents. She reported that a clinician with 32 years’ experience had said that things have never been tougher. We have heard many NHS professionals make that comment in the past couple of weeks. It was disturbing to hear that the hospital has recently been at more than 100% capacity on a regular basis. Before we entered the winter crisis this month, we knew that bed capacity across a number of trusts was beyond recommended levels. Using meeting rooms for patient care, as we heard, is not a road we should be going down.
My hon. Friend said that four key issues were affecting the current situation at King’s College. The first was the funding allocation since 2010. As we know, an ageing population increases demands on expenses in terms of medication, which means that the NHS really needs a 4% settlement on average, but in the past eight years we have had about 1% a year. She is right that the increases in demand on the NHS have been entirely predictable, and that the challenges set out as a result of austerity have been exacerbated by the cuts to social care we have seen since 2010.
My hon. Friend’s second point, on which I will expand later, was that the trust took on two failing hospitals in 2013. Thirdly, there are competing responsibilities in the trust between emergency treatment funding and elective surgery. She gave the examples of tragedies such as Grenfell and the Westminster terrorist attacks in the past 12 months, which placed additional pressures on the trust but were not recognised by central Government in terms of funding or support. Fourthly—this point applies to the wider NHS—the capital funding allocations have not been there to allow the trust to plan strategically for the future.
We also heard from the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who has considerable experience—he has several hats to put on. He did not blame the individuals running King’s for the current situation. He also highlighted well the multiple issues that arise from an underfunded social care system, and was right that patient care can suffer when trusts are under financial pressure. That is not to say that anyone who works in the NHS is using that as an excuse—that is not where anyone wants to be.
The hon. Gentleman mentioned PFI debt. In a debate on another trust issue, the Minister’s predecessor but two said that the Department was looking at PFI debts in various individual trusts and whether anything could be done to ease the burden on them. I do not know whether that work has been completed. Can the Minister update us on whether the many trusts saddled with PFI debt will get any relief?
We also heard from my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), who made two central points. First, she did not want the situation to turn into a characterisation of a recalcitrant teenager who is overspending. I know a great deal about that from my own family—not because I am a teenager. She also does not want the situation to turn into a blame game. I will return to that later in my remarks.
My right hon. and learned Friend’s second point, which was pertinent, was that we must think about the people who are affected by the situation a little more. She said that when the Prime Minister described the cancelling of operations throughout January as planned, that underplayed the human consequences of such a decision and showed a lack of empathy and compassion for their implications. Cancelled operations can have a psychological impact and, as we heard, they can have financial impacts. People could lose their jobs as a result of delayed operations. She also gave the example of older people losing their social circle while they are awaiting cataract operations.
My right hon. and learned Friend was right to say that we do not want to drift back to a situation where patients spending all night on trolleys in corridors is part of people’s routine NHS experience. We do not want to see any more of that.
My hon. Friend the Member for Dulwich and West Norwood gave some interesting statistics about the amount of money spent on management consultants advising the trust and said that, at some points, £1 million a month was being spent on such advice. I would be interested to hear if the Minister feels that that has delivered value for money for the trust. Has any analysis been done about the savings derived from that advice? That gives us food for thought about whether the money has been best spent—perhaps it could have been better directed to the frontline.
My hon. Friend also said that the trust has recently been subject to enhanced regulatory oversight. Does the Minister believe that that regime has delivered particular benefits? She rightly requested assurances from the Minister in terms of funding, patient safety, treatments and capital allocations. We will hopefully hear from the Minister on that.
I join my hon. Friend in paying tribute to all the staff working across the trust who, as the public face of our service through the series “24 Hours in A&E”, make the nation proud of what the NHS can deliver. They are outstanding and committed individuals who go above and beyond the call of duty each day to deliver the best possible care for their patients. Indeed, their dedication is replicated by staff all over the country, and their good will is all that stands between a crisis and a complete collapse.
As we know, an urgent question was asked before the Christmas break, and I would like to pick up on a couple of comments made by the then Minister, the hon. Member for Ludlow (Mr Dunne). In his initial response, he said:
“There has been a consistent pattern of financial projections by the trust that have not been met during Lord Kerslake’s tenure as chairman.”—[Official Report, 12 December 2017; Vol. 633, c. 177.]
He also said:
“I am happy to look at the circumstances surrounding what happened in 2013, but they are not as relevant to today’s situation as the way the trust’s financial management has deteriorated in recent months.”—[Official Report, 12 December 2017; Vol. 633, c. 181.]
I put on record my appreciation for the constructive and respectful way the former Minister conducted our business. Although we disagreed on many things, we did not do so in a disagreeable manner. However, I must pick up on those comments, because it is a matter of fact that the trust’s financial issues predated Lord Kerslake’s involvement.
The root of the problems facing the trust can be traced back to the collapse of South London Healthcare NHS Trust back in 2013, as my hon. Friend said. I welcome the new Minister to his place, and I hope our exchanges will be equally as courteous. However, I hope that in responding he will correct the record, because there is the disturbing trend that has been referred to of blame being personalised, which encourages a “hire and fire” culture in the health service. At the bottom of it is financial and quality issues at the Princess Royal University Hospital, which were significantly worse than identified during the due diligence process undertaken at the time of transfer, and which led to a much poorer deficit position than forecast in 2014-15. Of course, that was a year before Lord Kerslake took up the role of chair. As a former Minister set out in a Westminster Hall debate in March 2015:
“At the time, South London Healthcare NHS Trust was the most financially challenged in the country…Repeated local attempts to resolve the financial crisis at the trust had failed.”—[Official Report, 25 March 2015; Vol. 594, c. 549WH.]
The trust’s 2015-16 annual report set out that £56.5 million in efficiencies were delivered during the financial year—a considerable amount—but despite that work a £65.4 million deficit remained. The report states clearly that the final figure was arrived at after taking actions, many of which were one-off in nature.
In 2016-17, the trust delivered savings of £92 million and was forecast to deliver a deficit position of £1.6 million. However, that was dependent on £30 million of funding through the sustainability and transformation fund and an additional £9 million of cover for external funding pressures being provided. Unfortunately, that Government funding did not materialise. The final out-turn was a deficit of about £48 million. The trust’s financial report for that year said again that many of the savings made during that year were of a one-off nature.
I point out at this juncture, as others have done, that despite starting each financial year with an extremely significant underlying deficit, the trust was still expected to deliver annual savings though the tariff, as with all hospitals, at a level that Chris Hopson, the chief executive of NHS Providers, has described as “impossible.” He also said that the amount of savings required
“risks the quality of patient care and places an intolerable burden on staff.”
The Nuffield Trust has pointed out that the savings that have been asked of trusts are
“the equivalent of spending…£750 in real terms on a patient that you would have spent £1000 on in 2010”.
Against that backdrop, is it any wonder that we are where we are now?
It is true to say that the forecast position at King’s has again deteriorated this year, but it is completely false to portray that as a story about one trust or a particular chairman. It should also be pointed out that King’s had cut costs by 8% to 2016-17 and was aiming for a 5.8% reduction in the current financial year. As we have heard, there are issues relating specifically to King’s, dating back to 2013, that have never been fully addressed, not least because the underlying deficit has been consistently understated. The trust, like so many others, is facing pressures from the top to massage the figures with one-off savings and accountancy wheezes. I believe that that short-term, illusory approach is endemic across the NHS. As the head of the National Audit Office, Sir Amyas Morse, told us:
“The NHS in England remains under significant financial pressure which is demonstrated in its accounts. It has again used a range of short term measures to manage its budgetary position but this is not a sustainable answer to the financial problems which it faces.”
He went on to say:
“The Department and its partners need to create and implement a robust, credible and comprehensive plan to move the NHS to a more sustainable financial footing.”
The Health Committee, the Nuffield Trust, the Health Foundation, the King’s Fund and many others have all reported on the one-off measures, including vast transfers of capital funding, that are being used to understate the true level of deficit. Will the Minister rule out using such measures again this year and commit to providing an honest picture of the state of NHS finances?
As the hon. Member for Central Suffolk and North Ipswich said, the trust deficits we are hearing about in this debate are replicated across many parts of the country. By September 2017, 83% of acute trusts were in debt, to the tune of £1.5 billion. Can the Minister tell us how many will be in deficit at the end of this year? How many will, like King’s, fail to meet the deficit level agreed with NHS Improvement, and what will the consequences be for them?
Before the November Budget, NHS leaders exercised their duty of candour to argue publicly for an extra £4 billion in revenue each year for the NHS. That was the minimum they said would be needed to maintain standards. It has been made clear that many of the NHS’s constitutional targets will not be met within the current funding envelope. Can the Minister explain whether, by failing to give the NHS the money it has asked for, the Government have accepted that the rights of patients set out in the NHS constitution have effectively been abandoned?
In conclusion, with King’s as with the rest of the NHS, the Government seek to abdicate responsibility and to blame the systematic failings over which they are presiding on individual parts of the NHS rather than on their own funding decisions. They are desperately seeking to characterise King’s as an outlier rather than what the Nuffield Trust has termed
“the canary down the coal mine”.
The truth is that, like every trust, it is struggling with the longest and most sustained financial squeeze we have ever seen in the history of the NHS, yet the Government are not facing up to their own culpability for the situation. The Secretary of State is behaving like the worst kind of football chairman—the kind who takes no responsibility for their own actions but instead calls for the manager’s head after a spell of poor results, when the underlying problems were there long before that manager started, because there had not been the required investment for many years. That kind of short-term, personalised approach has failed King’s, it is failing our NHS and it has to change.
It is a pleasure to serve under your chairmanship once again, Mr Hollobone, albeit in a different role. I begin by paying tribute to the hon. Member for Dulwich and West Norwood (Helen Hayes) for securing the debate and for the powerful case she set out on behalf of her constituents. I recognise the importance of King’s not just to her family but to the community she serves, to other hon. Members present, and more widely.
In her remarks, the hon. Lady drew out three specific points, suggesting that the Government have responded to this situation as if it had arisen suddenly, that it is reflective of other hospitals and that the roots go back to the Princess Royal decision in 2013. I will seek to address each of those in the course of my remarks, but at the heart of this matter is the concern that the board and King’s have lost or eroded the confidence of the regulator by the manner in which the deficit target has significantly deteriorated, and the concern that the cost improvements are an outlier when pitched against comparable trusts. That is really the crux of the issue.
My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) brought the value of experience both as a clinician and as a former Health Minister. I was very taken by his remarks. Specifically, on the point he raised about the PFI debt, it is helpful to remind colleagues that support was agreed by the Department at the time, in 2013-14, for the additional costs of that PFI financing. That was taken into consideration by the board, which agreed to it at that point. It is not the case that the PFI has been a material contributor to the current deficit.
My hon. Friend makes a fair point, although it is difficult for a board that has effectively had a merger foisted on it to appreciate fully how a hospital will run across two sites—or even three sites, with Orpington as well. I am sure the Minister will go away and think about that in the context of the PFI and whether something more could be done to help with the PFI debt.
Indeed, I am happy to give consideration to the point my hon. Friend makes, although if one looks at the deficit for this year, which I will come on to in my remarks, one will see that the bulk of the deficit is not from the Princess Royal but from the other sites, so it does not pertain to the 2013 decision. I will come on to that more fully as I develop the case.
I will also say to the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who recognised that the staff at King’s want to deliver, that I agree with her on that point. It is not about apportioning blame to those members of staff. Indeed, the financial special measures are about giving additional assistance to King’s to address those points, rather than seeking to blame them. I think there is a shared desire from both sides of the House to get the right outcome for King’s. I am very happy to agree with her on that.
It is a fact that King’s is a challenged organisation. We are putting a lot of effort into supporting it. King’s is receiving substantial financial support from the Department. The trust has received more than £100 million of support to maintain frontline services, the second-highest level of support to any individual trust across England. Placing King’s in special measures for financial reasons is a regulatory action to bring about swift improvement and address the trust’s financial challenges. NHSI is working with the trust to undertake a rapid review and agree a financial recovery plan.
Under the financial special measures programme, the trust will receive extra help and oversight, with the appointment of a financial improvement director. The organisation will also be required to draw up and deliver a plan to improve its finances, which NHSI will closely monitor. That will include support from peer providers where appropriate. On top of those special measures, NHS Improvement has also appointed Ian Smith as a new and experienced interim chair for King’s, to take control of the organisation’s position. He was appointed, as I am sure the hon. Member for Dulwich and West Norwood is aware, on 21 December and took up that role with immediate effect.
It is a fact that some profound financial issues at the trust need to be addressed. The trust agreed a budget deficit of £38.8 million in May 2017, yet just five months after the board had agreed that deficit it submitted a re-forecast deficit of £70.6 million, and a further two months later, in December 2017, the trust informed NHS Improvement that its current mid-case projection had worsened again to around £92 million. So, an agreed board position of a deficit of £38.8 million had within seven months gone up to a deficit of £92 million. That is really at the heart of this. When measured, that level of deterioration is an outlier, which is why the chief financial officer and chief operating officer both resigned in November 2017, and the chair resigned, as hon. Members have pointed out, in December 2017.
When announcing the financial special measures, Ian Dalton, the chief executive of NHSI, noted of other hospitals that
“none has shown the sheer scale and pace of the deterioration at King’s. It is not acceptable for individual organisations to run up such significant deficits when the majority of the sector is working extremely hard to hit their financial plans, and in many cases have made real progress.”
The extent of the financial challenge facing King’s is well documented, and I recognise the figures that the Minister quotes. However, he has not yet recognised the extent of financial savings that King’s was already making. It is not an organisation that had been resisting the need to make savings; it has been making, on average, double the level of savings of any other trust in the country. That points to a situation in which the level of resource afforded to the trust is simply not enough to deliver the day-to-day responsibilities of keeping patients safe. Will the Minister recognise the extent of the effort that has gone into saving significant amounts of money out of the trust’s finances?
I am happy to recognise the hon. Lady’s point that significant savings have been made. However, the regulators found that there had been an over-reliance on non-recurring savings, rather than on delivering the cost improvement programme. For example, King’s has the highest cleaning costs per square metre, at £71, compared with the median of £41 per square metre. Indeed, in her remarks the hon. Lady talked about the cost of bringing in consultants such as McKinsey, which the King’s board itself brought in. The concern is the slow pace at which those cost savings and efficiencies have been delivered on the back of those reports.
The trust has also been in breach of its licence for financial governance since April 2015. That followed an investigation by Monitor in March 2015 after the trust was unable to resolve long-standing problems at the Princess Royal University Hospital, which it took over, as Members have pointed out, in October 2013. As part of Monitor’s enforcement action, the trust was required to produce and implement an effective short-term recovery plan and a longer-term plan to ensure that patient services were improved and that they were provided in a sustainable way for the future.
The trust does not routinely report its financial performance by site, but analysis shows that the trust confirms that the losses by service are across many services and across both main sites. As I remarked in my opening, while the deficits at the Princess Royal are proportionally, as a percentage, higher than at Denmark Hill, in absolute terms the majority of the deficit is at Denmark Hill. That speaks to the point raised by my hon. Friend the Member for Central Suffolk and North Ipswich, who is not in his place, about the legacy from the Princess Royal.
The trust also faces a number of other challenges. King’s has not met the referral to treatment standard—RTT—since January 2015, at which point the board took a decision to suspend its performance data reporting. The trust resumed reporting of the RTT performance data again in March 2016. Following the deterioration in performance throughout 2016-17, NHSI undertook an investigation into the RTT governance and the drivers of the deterioration, which was completed in July 2017. An action plan based on recommendations from that investigation was subsequently developed by the trust and agreed by NHSI. Again, while the hon. Member for Dulwich and West Norwood says that this is a sudden, late intervention by the Government, a chronology of action and support can be shown.
Taken together, these challenges are the reason why NHSI has invested a lot of time and effort in supporting the organisation. It has provided a member of staff on secondment to the trust for two days per week to support the delivery of the action plan and to strengthen governance around RTT performance and reporting. Delivery against the action plan is monitored by NHSI through its formal monthly provider oversight meetings with the trust, and it is working closely with the trust to agree an appropriate timeframe for the sustainable return to compliance.
King’s has received more than £350 million-worth of working capital since 2015-16, and was also successful in securing a £47 million capital loan in April 2017 relating to Windsor Walk. Along with other trusts, King’s has also benefited from £21 million of public dividend capital funding since 2013, covering many central programmes including cyber security and digital care. In the last three years, King’s has invested in new capital assets in excess of the level needed just to maintain their asset base and above the average across all foundation trusts and NHS trusts.
The Department of Health commissioned Deloitte to review the trust special administrator’s analysis of the split of South London’s deficit, pertaining to when the Princess Royal came within the trust, and to provide an updated view of the split of the forecast out-turn deficit for 2013-14. Its assessment of the Princess Royal University Hospital’s share of the deficit for the full year was approximately £22 million. The trust reported deficits in the three subsequent years, despite significant other integration cost and bridging support revenues. It brought in PwC in the autumn of 2014, and appointed a turnaround director to initiate a financial recovery plan process. The trust then had McKinsey in during 2016-17 to drive a transformation programme, which has been very slow to yield the significant benefits that were promised.
The trust has been subject to enhanced financial oversight since March 2017, which includes the following support from NHSI: a senior financial adviser embedded at the trust; monthly financial oversight meetings with NHSI; participation in the financial improvement wave 2 programme; and, since April 2017, the trust has also received dedicated support from NHSI’s transformation and turnaround team as part of its enhanced financial oversight. More recently, in 2017-18, the trust has had external support from PwC, Ward 20/20, and Bailey & Moore. We need to be clear about what has caused the recent problems at King’s, including its recent rapid deterioration, and what has not, but it is not a lack of support and consultancy.
The argument that the cause of King’s problems can be found in the merger with Princess Royal, which several Members raised as a contributory factor behind the subject of the debate, does not stand up to scrutiny. In October 2013, King’s College Hospital Foundation Trust completed a transaction to acquire Princess Royal University Hospital and Orpington Hospital on the back of the trust special administrator’s recommendations regarding South London Healthcare Trust. The trust also took over responsibility for additional services at Beckenham Beacon, Sevenoaks Hospital and Queen Mary’s Hospital, Sidcup.
In the summer of 2013, King’s presented a five-year integration plan that showed small net surpluses of £2 million to £4 million in each year from 2013-14 onwards. The plan was assessed to be of medium risk by Monitor’s assessment team, but was none the less plausible thanks to generous support funding agreed by the Department of Health and NHS England at the time. The trust’s current financial problems reflect, as I said earlier, a continued overreliance on non-recurring savings, instead of delivering recurring benefits through cost improvement programmes and especially a failure to improve medical productivity at both the Denmark Hill and Princess Royal sites.
Model Hospital data, which is available to the trust, suggests that the trust has significant opportunities for efficiencies in areas such as orthopaedics. NHSI is supporting the trust to develop its cost improvement plan programme for 2018-19, which includes developing schemes based on validating those potential opportunities.
While there is never a single cause in such cases, and while we have acknowledged the pressures being felt across the system, the clear conclusion to draw from the evidence is that King’s was an outlier in financial terms and had lost its grip of its finances in recent months. I spoke with the trust’s chief executive yesterday and he acknowledged that there had been a serious problem with the trust’s financial planning process. Defects in the way the trust’s plan was put together eroded the regulator’s confidence in the trust, and it is for that reason that the trust has entered into special measures for its finances. The financial special measures regime has a proven track record of success in supporting trusts, as shown with North Bristol NHS Trust, which recently exited the special measures regime.
In losing control of its finances in the way that it has, King’s has effectively taxed others in the NHS, which is why it is right that NHSI took action in the way that it did. This organisation got itself into a very bad financial position and now needs a great deal of help and support. As the right hon. and learned Member for Camberwell and Peckham set out, we can agree on both sides of the House that King’s needs support. It is for that reason that the regulator has intervened to put it into special measures.
I thank the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is not in his place, for bringing his experience to the debate. I am pleased that, having looked at the issue in some considerable detail when he was a Minister, he recognises, as the Minister seems not to, the problems that the merger of King’s with the Princess Royal and Orpington Hospital has caused for the trust.
The fact of the matter remains that the trust’s finances were stable and it was performing well on every measure until that merger took place. It has never been the same since. The combination of the drop-off in the increase of funding year on year, which has affected the finances at Denmark Hill and the organisation’s resilience to carry across costs to the Princess Royal and Orpington, with the irresponsible lack of a review mechanism for the funding settlement post-merger has, in my view, played a major role in destabilising the finances.
I thank my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), who has been a formidable champion for King’s for more than 35 years. She knows very well from direct experience exactly how bad things have been in the past at Denmark Hill, and how close we are to seeing once again those terrible circumstances of patients waiting far too long in A&E to receive the treatment they need so badly.
In summing up, I want to highlight two points on which I disagree with the Minister’s analysis. First, notwithstanding the support that the Government are putting in, they maintain a punishing approach to the finances of NHS trusts that are in financial difficulty. A system for funding our NHS that takes a trust that is already under financial strain, fines it and charges it additional interest for failing to meet impossible targets is a system that makes no sense at all. A system for funding our NHS that funds on a block grant basis emergency admissions, the volume of which hospitals have no control over, and then cancels elective operations, which deliver the revenue into our hospitals when pressures come through the front door of accident and emergency, is a system that makes no sense. The Minister has not addressed that conflict and the perversity in the funding system for the NHS.
Finally, I urge the Minister to consider very carefully the need for substantial capital investment in King’s at Denmark Hill. I am concerned that when staff at King’s hear talk about failures in efficiencies, and when the Minister talks about the failure to improve medical productivity, the inference is that staff are somehow not working hard enough.
I am grateful for that clarification, but that needs to be communicated very clearly to staff, who are feeling the pressure of this crisis. When we talk about efficiencies at King’s, they are in a lack of buildings, ward capacity and fit-for-purpose facilities to deliver when facing the challenges that are coming through its front door every single day. That matter urgently needs to be addressed as part of this turnaround process.
Question put and agreed to.
That this House has considered King’s College Hospital finances.