Tuesday 15 January 2019
[Mr Adrian Bailey in the Chair]
Recognition of Fibromyalgia as a Disability
I beg to move,
That this House has considered the recognition of fibromyalgia as a disability.
It is a pleasure to open the debate and to serve under your chairmanship, Mr Bailey. I am delighted that so many hon. Members have come to support the raising of awareness of a crucial issue. I thank the Backbench Business Committee for selecting the topic for debate, particularly the hon. Member for Southend West (Sir David Amess), for his support in obtaining and promoting the debate.
I want to pay tribute to two of my constituents, Adrienne and Leann Lakin of Chesterfield, and all the fibromyalgia campaigners who bang the drum relentlessly to ensure that sufferers’ voices are heard. Many intend to come to witness the debate. Their campaigning has been instrumental in persuading other hon. Members to attend or to speak out about fibromyalgia. I was proud to present a petition in Parliament, which reached more than 100,000 signatures on change.org, calling for fibromyalgia to be recognised as a disability and for greater awareness of and investment in treatment. I recognise that the context of the debate spans the responsibilities of both the Department for Work and Pensions and the Department of Health and Social Care, and I hope that the Minister will be able to pass on to her counterpart the topics raised in the debate that do not fall within her purview.
Many in this country are ignorant about what fibromyalgia is, but it is a condition that many people suffer from. It is one of a group of conditions often referred to as invisible illnesses, but sufferers live with its consequences every day of their lives.
I warmly congratulate my hon. Friend on securing the debate. His use of the word “invisible” was telling. Besides raising awareness, is not the debate about getting to the stage where fibromyalgia is diagnosed more easily?
That is an excellent point, to which I shall return. One of the major problems that fibromyalgia sufferers experience is that it takes so long for their condition to be diagnosed. I shall talk more about what we can do to get earlier diagnosis and better understanding throughout general practice.
Fibromyalgia sufferers experience many different kinds of symptoms. Often there is a heightened sensitivity to pain and extreme muscle stiffness. They often struggle to sleep, which exacerbates their muscular difficulties, and experience extreme fatigue. Sufferers also experience cognitive difficulties—not just headaches but problems with mental processes, known as fibro-fog, and an inability to process things as they did previously. As if those things were not enough, fibromyalgia sufferers can be struck down with irritable bowel syndrome too. A panoply of symptoms means that people have a terrible time. However, often, when those symptoms are dealt with in general practice they are masked as other conditions. Many time-consuming treatments are undergone, but they do not get to the root of things.
I congratulate my hon. Friend on securing the debate. Sara, a young mother in my constituency, has fibromyalgia, triggered by the birth of the youngest of her three children. She describes a pain so severe that she cannot even hug her kids. She says the personal independence payment assessment process stripped her of her dignity, because of a lack of understanding. Does my hon. Friend agree that there is a need to address unintentional ignorance and a lack of knowledge about what a debilitating illness fibromyalgia is?
I absolutely agree. My hon. Friend has given a powerful example. Meeting someone with fibromyalgia—this is even more true of those who live with a sufferer—we get to understand what it is like to walk a mile in their shoes. One reason why we asked the DWP to respond to the debate is that, on the face of it, sufferers do not appear to be very ill, but when we hear testimony such as that of my hon. Friend’s constituent we may understand what it is really like.
Like other hon. Members, I have met constituents at my advice surgery who have complained that their fibromyalgia has not been taken seriously. All too often, not only GPs and clinicians but the Department for Work and Pensions among others see it simply as aches and pains. It is important that, as my hon. Friend has been doing, we develop the argument that it is not something to be dismissed easily. It is far more than that.
I could not agree more with my hon. Friend. I think that there are many hon. Members here for the debate, on such an important day in Parliament when there are many alternative demands on our time, because we have had a powerful experience of what our constituents go through.
Does my hon. Friend agree that the fluctuating nature of fibromyalgia means that the DWP system is not sensitive enough to respond to the challenges faced by those who experience the condition?
I agree, and I think that that hints at a wider problem in the benefits system assessment regime, which finds it difficult to deal with fluctuating conditions, whether mental health conditions or muscular problems along the lines of fibromyalgia, that are better on some days, or manageable with a huge amount of medication, so that people can get out of the house and may appear better than usual on the assessment day.
I congratulate the hon. Gentleman on securing the debate. My constituent Susan says that the pain she suffers is so bad that the only time she does not feel it is when she is asleep. She mentions that it is not just that the condition itself is not picked up properly within disability assessment, but that it exacerbates other conditions she has, making them even more extreme. Does the hon. Gentleman agree with that point about wider understanding of the effects of the illness within the disability system?
I entirely agree. The impact on the rest of the family includes caring responsibilities that fall on them, restricting their ability to develop their earning potential. The consequence is that the entire family of a fibromyalgia sufferer will suffer too. It is a powerful point.
Estimates suggest that as many as one in 20 people suffer from fibromyalgia. Since I secured the debate I have been contacted by many MPs—there have been many interventions in the debate—and by constituents and other members of the public. People say that at last someone is talking about the condition, which they or their partner have suffered with for so long, feeling that no one understood. The feeling of being misunderstood is familiar to many fibromyalgia sufferers. Often employers are baffled as to why on some days an apparently healthy member of staff is the life and soul of the party, but on others cannot turn up for work because they are crippled by their condition. By the same token, those employees often feel tremendous guilt that a condition that decimates their ability to contribute keeps striking them down. That often leads them to conclude that they must go into work even though they are in extreme pain, frequently making themselves even more ill in the process. It truly is a vicious circle.
Fibromyalgia sufferers are also misunderstood, as we have already heard, by those who assess them for benefits such as PIP and employment and support allowance, as their conditions are variable and can often be managed in the very short term. Many fibromyalgia sufferers have taken pills to help to manage the pain and support them through an ESA assessment, only to discover that the assessment outcome bears little relationship to their daily experience of living with fibromyalgia.
I have had constituents speak to me about the fact that the tablets they took to enable them to get in a taxi to travel to their assessment and get through that assessment for an hour meant that, when they got home, they were in bed for days afterwards. I think they thought to themselves, “If only the assessor could see me now, half an hour or an hour after the assessment, they would see why I’m unable to work. I’ve been able to get myself through that assessment, trying to comply with the system, but to my own disadvantage.”
The hon. Gentleman is making an extremely powerful speech. As I will say in my contribution, my wife is a fibromyalgia sufferer. Is it not the case that stressful experiences actually exacerbate the condition, leading to hugely damaging flare-ups?
That point is spot on, and made from the powerful perspective of someone who knows what it is like to live with someone experiencing fibromyalgia. I will come on in a moment to some of the other things that are believed to be triggers for fibromyalgia, but the hon. Gentleman is absolutely right. We all know—it is one of our worries about the assessment regime within benefits—the stress of that process: the stress of going through the assessment, of believing that benefits will be taken away or of wondering how they will feel the next day. It is an incredibly unhelpful situation where people’s income is tied to their being ill, so they wake up almost hoping to be ill to justify the income, while simultaneously wishing they were better because they want to be able to contribute. That is something that is known much more widely in our benefits system, but fibromyalgia sufferers are very familiar with it.
I congratulate my hon. Friend on securing this debate and on the awareness day that he hosted last year, which was a very informative and moving event. Given all that has been said about sufferers, does he agree that, without the help of support groups such as the one in Newcastle, people with fibromyalgia would perhaps not have any outside support to help them with benefit queries or managing their condition? Those are voluntary groups that have been set up, but should we have more statutory groups to help people with the condition?
I pay tribute to the voluntary group that my hon. Friend speaks of. We all recognise the incredibly important role that voluntary groups of that sort play, and it is true that, when someone has a condition that is so misunderstood, speaking to other people who have experienced it and to families supporting people who have experienced it is important. I think we are also all conscious that, in an era where local government funding has been cut, often charitable and voluntary groups are the ones seeing their funding cut. Those groups often do not require a lot of funding, but a small amount of core funding enables them to function. That is something that many of us are concerned about.
I am conscious that there are a number of people who have put in to speak. I am very happy to take interventions, but I also do not want to cut into other people’s time, so I will crack on a little bit. Obviously, if there are other pressing issues, hon. Members are free to raise them.
It is hardly surprising that so many employers and assessment staff misunderstand fibromyalgia when, as has been reflected on already, it is so often misdiagnosed by the medical profession. Most fibromyalgia sufferers will live with the condition for over a year before it is diagnosed, and it is often the diagnosis of last resort, which means that sufferers will often have gone through many painful months of ruling out various other explanations and taking other kinds of drugs not relevant to their circumstances before the true cause of their pain is articulated.
Does my hon. Friend agree with my constituent, Karen Mitchell, who has fibromyalgia, that medical help and support is very variable, that there is great variation in how well fibromyalgia is recognised and that we need to ensure that consistent and helpful treatment is available?
I do. My hon. Friend will be pleased to know that I will be hot-footing it from this debate to health questions, where I have tabled a question about diagnosis of fibromyalgia in general practice. Other hon. Members might wish to leap on the back of that question and make their own contributions, and the one that my hon. Friend has just made is powerful. There is variability of diagnosis, and I have met a number of different sufferers who have had different kinds of treatment and, as a result of the treatment they have had, present very differently now. That is something I have seen with my own eyes.
Even with all the medical advancements that have been made, fibromyalgia is a condition without a known cause or a known cure. There are many factors thought to contribute to the condition, including abnormal processing of pain due to chemical changes in the nervous system or imbalances in chemicals in the brain such as serotonin, dopamine and noradrenaline. The condition often appears to run in families, suggesting that there is a genetic predisposition to it and, as we have just heard from the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), stressful events can be a trigger.
Many people who are concerned that general practice training, which by its very nature is general, is inadequate on fibromyalgia and that that is a cause of the delays in diagnosis. The petition also calls for greater research into fibromyalgia. With over 70,000 diagnosed patients having made claims for PIP, it is clear that this is a widespread problem, but that number is estimated to understate the number of fibromyalgia sufferers by at least 90%.
Does my hon. Friend agree that it is vital that there is a clinical specialist in fibromyalgia within each health economy, whether that is led by a general practitioner or a specialist practitioner, to support people with fibromyalgia right through the pathway in accessing services and in managing their own healthcare?
I recognise that, and I also recognise how stretched our national health service is more generally and the need for us to have that specialist help as early as possible. One thing that is becoming clear is that the delay in diagnosis allows the condition to get worse, which adds to the cost of treating it further down the line. Anything that can be done to speed up the diagnosis will have many economic benefits, as well as medical ones, down the line.
While the suffering and economic cost of treating and supporting fibromyalgia sufferers is so large and the knowledge base on what causes it and how to treat it is so small, this is an area that is ripe for further research. In the Library note we received before the debate, we were told that in the past five years, funding applications for around £1.8 million worth of research were approved. In a single year—I appreciate why this is a false comparison, but it provides some context none the less—the UK spends over £400 million on cancer research. Of course, I do not for a second underestimate the value of research into cancer, but given the problems that fibromyalgia causes and how long patients will live with it, surely we should be spending more than 0.5% of the investment into cancer research on researching the grave and widespread menace that is fibromyalgia.
Will the hon. Gentleman give way?
What can we do to raise awareness of fibromyalgia? I think we will hear from the hon. Gentleman particularly on that subject.
I am grateful to the hon. Gentleman for bringing this debate to the Chamber; as the number of people here shows, many of us have been written to by our constituents. I did a little bit of research, and it seems to me that the USA and Sweden both have good research teams looking at this condition and how it might be helped. Does he think the UK Government should look at what Sweden and America are doing on this particular disease to see how we might be able to help out?
I do. While Sweden and America have very different kinds of healthcare system, the hon. Gentleman is right that they both have world-leading research capabilities. Clearly, there is a big question for future UK medical research about our leaving the European Union; a great deal of medical research is much easier to do when we have 28 countries paying into it, rather than just one. However, whether collectively with other countries or individually, we have absolutely world-class medical research capabilities in this country and we should contribute towards the global knowledge base on fibromyalgia. The hon. Gentleman makes an important point in saying that.
What can we do to raise awareness of fibromyalgia? Today’s debate is the latest step towards doing just that. We have already had the presentation of the petition, and the fibro campaigners also held a reception in Portcullis House. Around 25 MPs came along to hear more about what life with fibromyalgia is like, and I was delighted that Adrienne Lakin and Billy Mansell were able to present at that reception and to get across to Members a little bit about the impact that it has had. The debate is another important step, and we look forward to hearing more about the Government’s strategy on recognising the effects of fibromyalgia on sufferers and what more they will do to raise awareness.
The petition was also specific about recognising fibromyalgia as a disability under the Equality Act 2010, which is an important and contentious issue. Providers of public services are required to make accommodations for people with disabilities. Many fibromyalgia sufferers would qualify as disabled in their own right, but each sufferer has to prove their own disability. Given that, as we have heard, the condition can take more than a year to diagnose in the first place, it is often quite a bit after that before sufferers are actually recognised as disabled. While many people manage their symptoms and go on to enjoy productive lives, the invisibility of fibromyalgia and the difficulty of diagnosis means that many patients are not recognised as disabled and are often invisible sufferers. As we have heard, that has a knock-on impact on their families, who often attempt to manage caring responsibilities alongside their responsibilities as breadwinners, trying to keep food on the table.
Once diagnosed, fibromyalgia sufferers would like the Government and the Department for Work and Pensions to recognise them as disabled under the Equality Act, ensuring that they get any support that they need to lead productive lives. Of course different patients will have different attributes and needs, but it is a chronic condition that will not get better. Ensuring that they do not have to fight to be taken seriously would be of real value. We heard previously that fibromyalgia may affect as many as 5% of the population, yet less than 0.2% receive PIP due to having it.
I am delighted to set the ball rolling on this important debate and look forward to hearing the perspectives of other hon. Members. Fibromyalgia sufferers need greater certainty, greater research and greater awareness. Collectively, we as a country need to do more to ensure that we not only understand but support them in their illness and in their desire to lead productive lives.
Before I call the next speaker, I make it quite clear that I will call the Front-Bench spokespeople at 10.30 am. A lot of Back Benchers want to contribute—I am told 10—so I suggest an advisory time limit of four minutes at this stage. However, I will probably drop that to a hard time limit if the earlier speakers take up an excessive amount of time.
I congratulate the hon. Member for Chesterfield (Toby Perkins) on raising this subject. Frankly, until he became interested, we had not spent too much time on it. Over the years there have been battles to hear voices on autism, dyslexia and ME, but it has taken the hon. Gentleman’s raising the subject to get so many colleagues here this morning.
We all know people who, when asked how they are, go into great detail about having this and that wrong with them. We call them hypochondriacs. However, there is a great danger that people with fibromyalgia are somehow not recognised. It is a rotten illness. Some 2.1 million people suffer from it—one in 20 people—and women are seven times more likely than men to experience it. It is awful.
I say to my hon. Friend the Minister that the hon. Member for Chesterfield should be declared the fibromyalgia champion, on a non-party basis. Now that he has started the ball rolling, he should lead on this subject and we should follow. I will not repeat many of the things he said, but I absolutely agree on the importance of recognising fibromyalgia as a disability under the Equality Act and understanding the debilitating and long-term effects on sufferers’ lives. For those living with this painful chronic disease, lack of awareness leads not only to many suffering in silence, but to their often receiving inadequate support and treatment.
I also say to my hon. Friend the Minister that I found out what we are doing in Southend, with regard to fibromyalgia provision, and it is not brilliant. We have a chronic fatigue syndrome service across Essex, which also takes referrals from GPs for other forms of fatigue, not only CFS or ME. There is not a single streamlined resource in the Southend area, although three departments provide a service to fibromyalgia patients, meaning that they have different routes to access services. However, it is not really a niche service. I am sure that other hon. Members have had similar experiences.
We have heard about the waiting time for diagnoses and the lack of understanding of GPs. It is also important to ensure that patients themselves have a better understanding of the condition. As the hon. Member for Chesterfield said, we are unfortunately struggling to find a cure and to understand how this happens. I highlight the importance of research in improving the lives of fibromyalgia patients. So much about the condition is still unknown. We do not even have a clear understanding of its cause and, more critically, there is no known cure. We should certainly invest in research. With the right understanding, investment and attention, we can do more to ensure that fibromyalgia gets the treatment it deserves.
I have the highest regard for my hon. Friend the Minister. She will not perform any miracles today. She will agree with all colleagues who speak. However, I am getting a little frustrated about action. That is what I am really asking for. The Health and Social Care Secretary spoke about the 10-year plan. Will my hon. Friend say something in that regard, and cheer us all up by saying that the Government take this illness seriously and have a plan on which they intend to deliver?
It is a pleasure to serve under your chairmanship, Mr Bailey. Under the Equality Act 2010, only cancer, HIV and multiple sclerosis are automatically recognised as disabilities. For all other debilitating conditions—including visual and hearing impairments, motor neurone disease, epilepsy, dementia and cardiovascular disease—in order to be defined as a disability under the Act, they must be proven to be a physical or mental impairment that has a substantial and long-term adverse effect on the sufferer’s ability to carry out normal day-to-day activities. No doubt many campaigners for the conditions I have named, as well as many others, would like those conditions to be automatically recognised as disabilities, but as the debate is on fibromyalgia I will concentrate on that.
Before I was elected to this place, I worked as a clinical scientist for the NHS and was also a workplace rep for Unite the union. As a rep I represented a colleague with fibromyalgia when the Pennine Acute Hospitals NHS Trust was formed by a merger of four hospitals: North Manchester Hospital, where we worked; the Royal Oldham Hospital; Fairfield General Hospital in Bury; and Rochdale Infirmary. Inevitably, as happens in a merger of that kind, services were rationalised across the four sites, with the main pathology lab where we worked relocated to the Royal Oldham Hospital.
My colleague had a great deal of difficulty with the relocation because of the extra traveling time and because she would no longer be working near her home. She was in constant pain and was just about managing to hold down a job working close to her home, without the added stress and pain of traveling an extra 14 miles every day. Sadly, her manager was unsympathetic and seemed to have difficulty in recognising that she suffered from an extremely debilitating condition. No concessions at all were made for her condition, and she was forced to make the move, which caused her additional pain.
Had fibromyalgia been recognised as a disability, the NHS, as my colleague’s employer, would have been obliged by law, under the Equality Act, to make reasonable adjustments to accommodate her condition and keep her in work. That could have involved allowing her to work shorter hours, allowing for extra rest breaks or even finding her alternative work on the North Manchester Hospital site so that she did not have to travel. Her case emphasises why it is so important that fibromyalgia is recognised as a disability; so that it becomes legally incumbent on employers to make reasonable adjustments.
Sadly, that person is not alone. I have had at least one constituent who has had to leave her job because of this condition. Louise-Ann Wilshaw contacted me last week and asked me to attend this debate. She told me that she had had a very tough year being off sick from work and eventually having to resign because of the debilitating effects of the condition. At just 45 years old, she says that her future seems very bleak. She is uncertain whether she will ever work again. She is also struggling with accepting and learning to cope with her illness and having to support herself financially. Illustrating the effects of her illness on memory and concentration—the fibro-fog, to which my hon. Friend the Member for Chesterfield (Toby Perkins) referred—she finished her email to me by apologising for any spelling mistakes that she might have made.
Many of those who have to leave work because of their experience of fibromyalgia often have trouble accessing the relevant benefits. Assessment for ESA and PIP depends not on a person being diagnosed with a particular health condition or disability, but on how their health condition or disability affects what they can and cannot do, as determined by a work capability assessment or PIP assessment. We need to do more to support those affected by fibromyalgia. For many, acknowledging their disability as a disability would be a great start.
Order. I call Andrea Jenkyns, who has a four-minute advisory time limit. After her speech I will impose a three-minute time limit.
It is a pleasure to serve under your chairmanship, Mr Bailey.
I cannot remember a day without pain in more than 15 years. When I was first diagnosed with fibromyalgia, it was less understood than it is today. We have come on in leaps and bounds. Fifteen years ago, it was felt to be very much a condition in someone’s head, but it is much more widely understood today, so we are moving in the right direction. I thank the hon. Member for Chesterfield (Toby Perkins) for securing the debate, which is important not only to raise awareness but to ensure that we get more research in this area.
I shall speak briefly about what it is like, on a daily basis, to live with this condition and then say a little about the current legislation and what I think could be done to help sufferers a lot more. The hon. Gentleman discussed some of the symptoms. The widespread pain is one of the worst things. I am talking about waking up in the morning and being bent over with pain. You feel like you are 80 because every muscle in your body is in pain, and that continues throughout the day. I have found that the medication provided really zonks me out. It causes me to have even more memory lapses, which in our profession is not good. You do not want to be feeling sleepy all the time.
It is a good job that I have kept my sense of humour about this. I remember one occasion back in 2015, when I was newly elected and a guest on one of the political programmes. Even to this day—three years on from being elected—I get very nervous when I know that I have to speak in a debate or do a media appearance, because I never know when the fibro-fog is going to come on. I remember that during that political programme, I could not think of a word as basic as “economy”, and what other word is there for economy? I do not know whether anybody else can think of one. So I was there, with the cameras on me, and I just wanted the ground to open up and swallow me, but I just laughed it off and dealt with it.
On another occasion, I was at a supermarket, unloading everything at the till—I had a whole week’s worth of shopping and baby stuff—and I completely forgot my PIN. The way I have dealt with that problem since is that, just as in “Who Wants to be a Millionaire?” you can phone a friend, I phone my mum, when I have that memory lapse, to remind me of my PINs.
Joking aside, the lack of sleep is an issue as well. Last night I had three hours’ sleep, and that is a regular occurrence. But I feel very lucky. My sister has multiple sclerosis. She is only 10 years older than me and is blind in one eye and losing the sight in her other eye, but she is a real trooper and runs her own business. I do think that the way we approach things in life can help. I am very lucky, in that I do not suffer with the depression side of fibromyalgia, and I think that is a real crux of it, so I would like to ask for more support for the depression elements of it. What I find is that each day is a struggle. I just keep focused and keep busy; I am probably living off adrenaline. When you get home in the evening, you collapse into bed and then, when you stop blocking it out, you realise what pain you were in. Then there is that vicious circle of lack of sleep and the cycle begins again. The fibro-fog, extreme tiredness, extreme pain and trouble remembering things are the big things for me.
Trauma can bring the condition on. I think that when I lost my dad, that made the situation worse. As the hon. Member for Chesterfield rightly said, stress can make things much worse. I had a constituent who lost two young babies to cancer. That is how her condition was brought on, and she has struggled since.
I shall wrap up by saying this. There is provision under the Equality Act 2010, but it is on a case-by-basis. I think that is right, because everybody is different, but we need to ensure that fibromyalgia is more recognised and that there is greater support, better medication, which does not zone people out, and better support for depression. Also, the physical treatment is not just about physiotherapy; deep tissue massage is brilliant, but people cannot get that on the NHS. Could my hon. Friend the Minister look at such things, please?
Order. I will now impose a three-minute time limit.
This condition, as we all agree, is not widely known about or understood. Often those living with it feel that they are drowning in despair and their loved ones are at a loss as to how best to support them. It is believed that up to 2 million people in the UK live with the condition. The true causes of it have not been established, but it is thought to be related to abnormal levels of certain chemicals in the brain and changes in the way the central nervous system processes pain messages carried around the body. It is also thought that there may be a genetic predisposition. In many cases the condition appears to be triggered by a physically or emotionally stressful event. There is no cure, although there are some treatments that can ease the effects.
I pay tribute at this juncture to the very important self-help groups in my constituency that help sufferers with this condition. There is no denying that it is a complex condition and there is a genuine lack of societal recognition of it. It is a truly disabling condition and must be treated and recognised as such for those seeking support from our welfare system.
Consultations undertaken by the Scottish Government show that current PIP assessments are simply not fit for purpose for those with fluctuating conditions such as fibromyalgia. Where conditions involve symptoms that fluctuate and vary, an effective assessment of illness must be flexible to take account of that. The problem is that disability assessments in the current UK welfare system are tick-box exercises, so the answers need to be yes or no even when complex, fluctuating and distressing conditions are being assessed. How can the assessment of such a condition truly be conducted in that way and still be meaningful? Clearly, simply ticking boxes cannot capture the distress, trauma and debilitation of such a complex condition. However, those living with this disease must subject themselves to that process in order to access essential support.
We need a welfare system that fully understands what those with this condition endure every single day as they struggle with everyday tasks that the rest of us take for granted. We need to ensure that the lives that they are living are reflected in the support they receive. That is the right thing to do, so I urge the Minister to put those laudable aims in motion without any further delay. Any further delay will mean greater suffering for those affected and their families, which ought to shame us all.
It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my hon. Friend the Member for Chesterfield (Toby Perkins) on securing this debate.
I have an interest to declare: my wife is a fibromyalgia sufferer. I want to talk primarily about her experience of the condition. Perhaps the hardest symptoms to understand are the ones that we cannot see. The fatigue literally wipes her out for days at a time. There is also the pain: to the outside world she looks okay, but underneath she is suffering. In her own words, she said:
“I do experience various aches and pains. These can differ from aching muscles to painful joints, especially knees and ankles; tenderness all over my skin like I’m covered in a thousand small but painful bruises; and sometimes it feels as if every bone in my body is burning.”
Of course, I just want to give her a hug, but doing that makes her wince. It is so frustrating knowing that I cannot help.
My wife considers the cognitive challenges—the “brain fog”, as she calls it—the most irritating symptom. She also said:
“Sleeping does not come easily. It is very difficult to get to sleep and when I fall asleep, I wake up within minutes.”
There is not enough time to go through all the symptoms, but we have heard about many of them today. The biggest thing I would like the Government to take away from today is the experience we had in getting diagnosis and treatment. My wife said:
“When I was first diagnosed with fibromyalgia, three years ago, I was actually quite relieved…I knew things were getting worse. Despite numerous tests, there seemed to be nothing wrong with me.
I recall multiple visits to my doctors where I would tell them how exhausted I felt and they told me that I was probably depressed—that being a working mum with three kids was tiring and difficult.”
Hearing that just made her despair.
On that point, my constituent James wrote to me saying that a lot of medical professionals look at him as if the condition does not exist, and that the worst part is that nobody understands it and it is not recognised. He got zero support. He suffers from physical depression. The antidepressants do not work and he cannot get the support or the treatment that he needs from the NHS.
That is exactly the experience that we have had and so many other hon. Members’ constituents have had. Speaking about how she felt before she got her diagnosis, my wife said:
“Sometimes, just having a bath would wear me out. I spent most weekends in bed or on the sofa…I just had no energy to move. I couldn’t do stuff with my children or even cook dinner. And I couldn’t understand why I felt like this. I knew other people got tired, but they still managed to live their lives. And so I thought I must just be lazy or completely lacking in any self-control…So when I was finally given my diagnosis, I was pleased that it wasn’t just me making it all up. It was not all in my head or character flaws leading to laziness and ill-discipline. I was and am actually ill. This is something beyond my control. And although it might be unfortunate, at least I now knew what it was.”
I was relieved as well. I knew that something was wrong, but I did not know what. On reflection, I think we both realised that she probably had the condition for years and all the time it was getting worse. We knew something was wrong, but we felt that nobody was listening.
The most shocking thing about fibromyalgia is that it mostly affects women—seven women to one man. My constituent came to visit me on Sunday at a surgery and she has just emailed me now to say that after that five-minute meeting it has taken her until today to recover. Does my hon. Friend agree that we cannot continue to ignore this?
That is certainly something I recognise. My wife tries to live by pacing herself. That is the only way she can manage her condition. She knows it is a lot worse in winter than in summer and it will flare up if she over-exerts herself. She can save energy for specific occasions, for example a conference, work or an evening out, but no matter how much she plans, it can catch her out. She will be too exhausted or in too much pain to meet a deadline or go to a meeting. She ends up giving her apologies and feels that she is unreliable. She has practically given up trying to plan social things in advance. It is incredibly frustrating.
Unless more research can be done into this condition and more awareness raised among the medical profession and employers, fibromyalgia suffers will continue to be disadvantaged by more than just their symptoms. For us, this is not just about how fibromyalgia is classified under the Equality Act 2010, but, in common with many recurring and fluctuating conditions, about how people with these conditions are treated and supported. There needs to be much more research into the condition alongside consistent treatment pathways, with better training for medical professionals to recognise and then treat the symptoms.
Services should be in place to support fibromyalgia sufferers to enable them to live their lives as fully as possible. It has taken my wife two years, at her insistence, to be referred to a pain management clinic. A year on, she is still waiting to be seen. All the time she is suffering and her condition is deteriorating. I hate what this condition has done to my wife and our family. It is so frustrating not being able to help her make the pain go away, not being able to help her find a way for her to live her life as she should. It is so frustrating that there appears to be no hope on the horizon that things will get any better soon.
Diolch yn fawr, Mr Bailey. My wife is also a sufferer of fibromyalgia. I asked her if she wanted me to make a speech publicly declaring her condition and she was eager for me to do so, because one of the biggest feelings felt by fibromyalgia sufferers is helplessness.
My wife was recently diagnosed, but she has been suffering from the symptoms for five years. The trigger event was the birth of our second child—giving birth is of course a very physical, traumatic experience—and she has suffered since that day. It is a terrible, life-long condition, once it catches hold of an individual. Chronic pain is the main characteristic of the condition, as we heard from an actual sufferer, the hon. Member for Morley and Outwood (Andrea Jenkyns). The pain is constant, but the condition flares. The flares can last for weeks. The symptoms then are extremely severe—there is no reprieve.
Chronic pain is always associated with chronic fatigue, because sufferers cannot sleep and find themselves in a vicious cycle. The other main condition is hypervigilance, and sensitivity to noise and sound. My wife has gone from living a very active lifestyle to now living minute by minute, which has a huge impact on her social life and our ability to enjoy a family life. It is life-changing.
The medical pathway is extremely convoluted. There is a lack of awareness at not only primary care, but secondary care. My wife has been fortunate to be referred to the Royal National Hospital for Rheumatic Diseases in Bath, but she is at the start of a very long waiting list, five years after being diagnosed. There is a huge amount of work to do in Wales, where health is devolved, for us to improve pathways for people who suffer from this condition.
Before special care is provided, treatment is based on the painkiller continuum—different painkillers of different strengths—and then also different antidepressants, which have their own very serious side effects. The major symptoms are fatigue, widespread pain, joint aches, migraines, carpal tunnel, drug resistance, sweating hands and feet, slurred speech, light sensitivity, noise sensitivity, memory loss, food intolerances, irritable bowel syndrome, lower tolerance of physical activity, non-restorative sleep, confusion, anxiety, depression, hearing problems, menstrual issues and chemical sensitivity.
I wanted to say far more about the process of us helping these people, but there is insufficient time. These are very sick people. The health systems and the social security system that we have within the British state at the moment offers little support.
It is an honour to serve under your chairmanship, Mr Bailey. I congratulate the hon. Member for Chesterfield (Toby Perkins) on securing the debate.
I am here today because Julie Britten, my constituent from the Bath fibro group, came to see me a couple of weeks ago with her partner and very movingly described what fibromyalgia is. We have heard today from two hon. Members whose wives are suffering from the condition. We need to listen to the carers, too, because they feel as helpless, if not more, to see a loved one suffering. They also suffer from the fact that a lot of people, because they do not understand what fibromyalgia is, suggest that it is made up. Suddenly something has changed in their family member and they do not really understand why. That helplessness is one of the most painful things that the sufferers themselves and the carers who live with loved ones have to put up with.
We have already heard a number of points about the condition. As was mentioned, in Bath we have an excellent facility, the Royal National Hospital for Rheumatic Disease, previously known as the Royal Mineral Water Hospital. It is a very old hospital, locally known as “the Min”. Again, because it is not a rheumatic condition, but far more complicated, we need to find facilities where we can directly address fibromyalgia as a disease, rather than tiptoeing around what it is. The main difficulty is that the pain that people with fibromyalgia feel is not directly caused by damage or injury to the area that hurts. Instead, as I understand it, the problem lies in how the brain and the nervous system process pain from that area, so it is complicated.
Fibromyalgia is recognised in the Equality Act 2010 as a disability and an invisible illness, but again, because of the uncertainty, the most important thing that we in this place can do is push for more research and funding for research into the condition. That is at the heart of ending the uncertainty.
Hon. Members may know that I am working on eating disorders, and a similar picture has emerged on a couple of occasions. People do not understand fibromyalgia, which leads to stigma, and our rules and regulations do not fit with it. We need more funding to get to the bottom of what fibromyalgia really is and understand it, so we can end the suffering not just of the people who feel that incredibly debilitating pain, but of their loved ones who also live with it and are affected by it. I ask the Minister to make sure that there is more funding for understanding fibromyalgia.
In three minutes, I cannot possibly do justice to the many emails I received from constituents; suffice it to say that I thank Lorraine Deacons, Ellie Woodburn, Caroline McGarvey, Geraldine Kennedy and Marie Christie, who all live in Glasgow East and are affected by fibromyalgia. I deeply regret that such a pathetic time limit means that I cannot read out their testimony—I am actually quite upset about that.
I will touch on a number of issues that were raised by charities. On training and education, there is clearly inconsistency among GPs and they need to come into alignment. We cannot have what seems to be a postcode lottery for some of our constituents. If they have a sympathetic GP, that makes all the difference.
Will the hon. Gentleman give way?
No I will not, because of the time limit.
Work capability assessments are also a major issue. I understand that one charity worked up guidance with Maximus. I would be grateful if the Minister clarified whether that guidance has been cascaded through the Department for Work and Pensions for decision makers.
The issue of reasonable adjustments has been well covered, but there is a role for the Department for Business, Energy and Industrial Strategy to play. I hope the Minister can have conversations with her colleagues about that.
On alternative medicines, we all accept that patients know their bodies best, so it is important that we respect their wishes. That is a message to health practitioners.
Finally—because I want to show courtesy to the hon. Member for Strangford (Jim Shannon)—a major concern that was raised with me was that social media platforms are hosting groups where misinformation is being perpetuated and where people are talking about suicide. Social media platforms have a real responsibility to get a grip on that.
As I say, I am conscious that many hon. Members want to speak in the debate and had the courtesy to put their names down. On that basis, I will stop talking and allow other hon. Members, who were here at the beginning of the debate, to contribute.
I thank my hon. Friend the Member for Chesterfield (Toby Perkins) who has become a real hero for many people with fibromyalgia, because he has given them a voice. Ahead of the debate, I posted on Facebook to ask people to share their feelings and experiences with the people of Plymouth, because there are many fibromyalgia sufferers there. The number of people who have got in touch is extraordinary. Among those people, the common view is that they want to be believed and supported. My hon. Friend’s work has done much towards that. The suggestion of the hon. Member for Southend West (Sir David Amess) about a fibromyalgia champion is a good one that has cross-party support.
It is important to say, and to say clearly, that fibromyalgia is real, that the pain is real, and that the people who suffer from it should be believed. That should not be controversial, but I am afraid it still is. The campaign to have it recognised as a disability is good and important. It would make such a difference to many people’s lives to have that recognition.
Sarah wrote to me to say that,
“the pain is chronic and never goes away…Physically it started with the horrendous pain, constant viral infections, walking along and suddenly my legs would give way and I would end up lying in the road, being unable to change the gears in my car suddenly as I didn’t have any feeling and being unable to function due to feeling so fatigued and having zero energy.”
Among the people who got in touch, it was common to talk about how fibromyalgia rips away the ability to do things that many of us take for granted and how, in many cases, they did not understand why that happened and could not explain it clearly to people. The delays in diagnosis contribute to that suffering.
Fibromyalgia should be classified as a disability. That is a necessary step to dealing with the horrendous stigma around the disease and to directing the attention that people with fibromyalgia need to get the support they deserve.
The real-life stories I have heard from people in Plymouth were about not just their diagnosis and the health system, but how the DWP treated them, especially in their healthcare assessments. Our assessment system does not adequately understand the real-life experiences of many people with hidden illnesses, in particular fibromyalgia and ME, but also many more besides. It really needs to, because they are precisely the people who need support from our welfare system, but are not getting it.
One thing that all hon. Members can do is tackle the stigma around fibromyalgia, as we have done for ME and many other hidden illnesses. To do that, we need to talk about it, give a platform to those people who suffer from it, and recognise that we will not receive mass lobbies in Parliament about it, simply because coming to London—especially from Plymouth and further away—takes a lot of energy and knocks people out for weeks afterwards. We need to recognise that it is real and do something about it.
I congratulate the hon. Member for Chesterfield (Toby Perkins) on securing the debate and other hon. Members who have made contributions in a restricted time. Without a doubt, the subject is worthy of a three-hour debate, as the number of hon. Members present indicates.
My introduction to fibromyalgia has come through my constituents in my position as a local representative, a councillor, a Member of the Northern Ireland Assembly and now a Member of Parliament. My constituents have told me about the sensation of being in pain and feeling ill. One lady said that her day-to-day life was having her sight affected and having no energy.
Clearly, my heart went out to that constituent, not simply because she has a difficult life, with days where she cannot get out of bed, eat or even really drink, or simply because she is young, but because I want her to get so much more out of life than a daily battle to do the things that most of us can do, such as showering and basic hygiene care, but that she cannot. The diagnosis of fibromyalgia will not automatically entitle her to the help that she needs, which is why the debate is so important. She will have to fight another battle to have her illness and needs recognised and accepted. We all know what the issues are.
The specific treatment for fibromyalgia syndrome is a multidisciplinary approach that includes physical rehabilitation, access to hydrotherapy, psychological support, behavioural therapy and education sessions. Alongside that, the European League Against Rheumatism’s guidelines on the condition say that treatment should incorporate collaboration with a range of professionals, including pain specialists, psychologists, physiotherapists and occupational therapists. All that tells me how complex fibromyalgia is, with a lot of different departments managing a lot of different facets. It is little wonder, with respect to the Department and the Minister, of whom I am very fond, as she knows, that some people feel abandoned and alone in the middle of all of those people and departments. It is for them that we stand here today.
We want research and legislation. We need protection under the Disability Discrimination Act 1995. I conclude with a comment from a lady, who says:
“I know a lady who is an absolute whirlwind when she is well. She could be in my office cheering everyone up with a winning smile and charming personality and literally an hour later, she is wiped out and can’t move for days at a time. To expect this lady to be able to attend job centres weekly for hour-long job interviews without understanding that she physically cannot do this is absolutely absurd and yet she is not automatically entitled to ESA and other helps. To believe that she will”—
by some miracle—
“be able to attend her PIP assessment on a certain day is a nonsense and yet she faces losing PIP if she doesn’t present herself to be assessed.”
It is because of people like her, and all those people who live a life of darkness and pain, who battle to live, to eat and to turn their lights on, that this debate is important.
It is a pleasure to serve under your chairship, Mr Bailey. I congratulate the hon. Member for Chesterfield (Toby Perkins) on securing the debate and on his efforts to ensure greater recognition, research and understanding of fibromyalgia through the mechanisms of the House. I am only sorry that the debate is in Westminster Hall, where the amount of time is so compressed, and that, because of the structures of this place, most hon. Members have had less than three minutes to say what they wanted.
I will try my best to say as much as I can in the limited time I have, but many constituents who have written to me will not be given a fair hearing, which is unfortunate. I know Brexit is going on today and that is important in its own right, but this is equally important to my constituents and it impacts on their lives. I do not think that we are doing them any justice with the limited platform that we have.
As we have heard, fibromyalgia is a chronic condition with symptoms that can be constant or intermittent for years, or even a lifetime. Hon. Members of all parties have said that fibromyalgia can be difficult to diagnose, because the nature of the conditions fluctuates and symptoms often vary. As various Members have said, it has a huge impact on loved ones. The personal contributions of the hon. Members for Carmarthen East and Dinefwr (Jonathan Edwards) and for Ellesmere Port and Neston (Justin Madders), and the personal experience of the hon. Member for Morley and Outwood (Andrea Jenkyns)—who called for the Government to recognise and support people, especially those experiencing depression—are really important.
My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) rightly called on the Government to recognise the condition as a disability and to look at the way that the Department for Work and Pensions system assesses it. The tick-box exercise is not flexible and does not recognise the impact of the condition. I share the frustration of my hon. Friend the Member for Glasgow East (David Linden) that this platform does not do justice to the subject at all. It is unfortunate that limited speaking times have taken over the debate and a lot of people have not been able to say as much as they would have liked.
Many of those suffering from the condition continue to work. Many constituents who have contacted me are not solely reliant on the social security and welfare system of this Government. They continue to work and want to contribute. There is nothing more soul destroying than having a debilitating condition when all they want to do is go out and provide for their families.
When people are unable to work because of fibromyalgia, it is right that the social security system should help them. For many people, additional support from personal independence payments and other forms of support allows them to reduce their hours and manage their condition. Yet many people find, when it comes to reassessing and reapplying for support, that being seen to be self-managing or trying to manage their condition goes against them. The current process goes completely against trying to manage a condition and continue working. That is exactly what anyone would want to do, and hopefully any self-respecting member of this Government appreciates that these people are trying their best to hold jobs as well as manage their condition. The DWP system should not hold that against them.
I will take the limited time I have to give voice to my constituents. Vivian says:
“The problem is, I look okay on the outside. I can string sentences together. I also make eye contact in social situations, but the process itself is so degrading. Stress makes my fibromyalgia worse, meaning more pain for me and I can hardly move. I take as many painkillers and diazepam as I can to lower my pain to a point where I can move without looking sore. What makes me mad is the appeal board know how fibro affects people, yet still have these processes in place. Surely our system of benefits must shake-up if this is how people with genuine illnesses are treated?”
I hope that the Minister will take that on board.
The reality is that for someone to sit there with a form and tick boxes, and fit people into a condition that says they can make eye contact, do their make-up, walk a distance, is a degrading process. I do not think that is something that we would want to go through ourselves, so why would we administer a process that puts other people through that, especially when we have the ability to change it? I do not think it is that hard to devise a process that fits the condition. Alter it slightly, vary it, create flexibility, but for God’s sake do not have a system that degrades people further when many are already at their lowest point.
I do not believe that the Government are doing enough to support people who wish to return to work or self-manage their condition. Another constituent, Donna from Carluke, recently decided to return to work on a part-time basis. She has had to adapt to her illness and, after two years of treatment, agreed to return to work. She works only mornings because she needs the afternoons to sleep, in order to manage her condition and look after her children in the evenings. She was claiming personal independence payment to allow her to work part-time and to supplement her earnings. However, Donna is currently in the process of challenging a refusal to be granted personal independence payment; the process assessor thought she did not need that additional support, because the tick-box exercise does not recognise her condition. The cut in the support that she receives from the disability element of the working tax credit and a council tax reduction means that her household budget is cut by £750 per month, which is more than she earns for working part-time. She still wants to continue to work. She feels she would be better off not working, but she continues to maintain her part-time job and to manage her condition because she has two young boys and she wants to set them an example. That is nothing short of admirable. This woman has gone through years and years of trying to get a diagnosis and a lot of personal stress and trauma in her life, yet she continues to work and give a prime example to her sons. I do not think anyone should be penalised for that.
William from Netherburn was forced to give up work because of the dramatic changes to his lifestyle. He has many other conditions on top of fibromyalgia. He is in constant pain, goes numb and has acute memory problems, yet he was awarded the lowest rate of care when moving from disability living allowance to personal independence payment. This is a flaw in part of the process of transitioning people from their legacy benefits. It is something that could have been altered. There have been countless debates about that in the House. Obviously, it is easy for the Opposition to criticise the Government, but we have given ample opportunity and made many suggestions about how to review, change and adapt the system. It cannot be that hard to adapt a system, even slightly, to recognise that it is not user-friendly for anyone with a condition.
A close friend, Emma Richmond, who I have known since I was 17, was one of the most lively, vivacious, bubbly people I have ever met, but in the last two years I have seen a huge change in her because of this condition. I want to use her words, not mine. She said:
“At the age of 30 I’m using a cane and find I’m losing my social life to pain. Every day I’m in pain and it has never let up. There are days when I can’t get off the sofa due to the pain and fatigue. It’s a debilitating condition. It’s a humiliating condition. I get to the stage where I don’t see why I’m here anymore. I fight to be normal every day. It’s not like me to feel like giving up.”
Emma, like others I have spoken about today, has a full-time job. She works for Her Majesty’s Revenue and Customs, of all Departments. They have been an understanding employer, which prompts the question that if a person who works for a Government Department can have that level of understanding and flexibility, why cannot an individual in society, who engages with other services and other Departments, have exactly the same flexibility and understanding? It seems highly hypocritical, but it shows it can be done—I believe it can be. The Government only have to make minor modifications and changes to the system to deliver the best services they can. With respect to the Minister, I know she always wants to do that.
I ask the Minister to discuss this with her colleagues in the Department and look at the many ways in which the initial assessments can be made fair for people with fibromyalgia and mental health issues to avoid them needing to go through the taxing and arduous appeals process. An appeals process that consistently overturns decisions is clearly flawed. I ask her to get to the root cause, and make the process fairer and more flexible, for my constituents and for my friend. I want to be able to ensure that they enjoy their lives as much as we all can.
It is a pleasure to serve under your chairmanship, Mr Bailey. I am afraid that my stop clock has just died, so do help me with the time and bear with me as I will not be able to see a clock.
I congratulate my hon. Friend the Member for Chesterfield (Toby Perkins) on securing the debate. I think that all of us across the Chamber would agree that he has done an excellent a job of raising the matter on behalf of his constituents and fibromyalgia sufferers across the UK. He made some powerful points. He talked about the desperate need for more research, stressing the point that although this debate is about the work of the Department for Work and Pensions, the subject crosses over into the work of the Department of Health and Social Care. I am sure that the Minister will take that forward and work with her colleagues in that Department on the issue.
My hon. Friend spoke about the impact that fibromyalgia has on sufferers, and how it affects all aspects of their everyday lives. We are focusing on social security matters, but there are also issues with work, as many colleagues have expressed today. Obviously, the huge challenges with access to social security should not go unnoticed. Many Members have made that point today, and I am sure that the Minister will address it when she responds.
Many hon. Members—some are no longer in the Chamber—made some really valid contributions and interventions. My hon. Friend the Member for Sheffield Central (Paul Blomfield) intervened to highlight the lack of understanding of the effect of fibromyalgia on day-to-day living and, in particular, on accessing social security. Members highlighted the challenges that fibromyalgia presents and the problems it brings, including in being assessed and qualifying for personal independence payment . My hon. Friend spoke about fibromyalgia being a fluctuating condition, which it is.
I agree with the hon. Member for Southend West (Sir David Amess) that my hon. Friend the Member for Chesterfield is a champion for people with fibromyalgia; he has certainly brought it to my attention. My hon. Friend the Member for Heywood and Middleton (Liz McInnes) shared her experience of cases of fibromyalgia and recognised the impact that the condition can have in the area of work.
I thank the hon. Member for Morley and Outwood (Andrea Jenkyns) for sharing her personal experiences, particularly in relation to memory and fibro-fog, as well as the fatigue that fibromyalgia causes. I commend her for being so open about the condition and for the way she is just getting on with life, as many people with a long-term disability do, including me.
I congratulate Adrienne, the constituent of my hon. Friend the Member for Chesterfield, as well as Fibromyalgia Action UK and Versus Arthritis, on all the work they are doing to raise awareness of the condition. Fibromyalgia was first recognised by the World Health Organisation back in the 1970s, and we know that in the UK up to 2 million people are affected by it and that as many as one in 20 people suffer from it. Yet it remains a condition that is still often unrecognised, under-diagnosed and, in many cases, totally invisible.
As we have heard, the symptoms associated with fibromyalgia include widespread pain across the entire body. In the words of one sufferer, it is a
“generalised pain that can be anything from a shooting pain in my arms, hands, fingers, legs, feet, toes, back and shoulders.”
It can also cause headaches. Another sufferer has said:
“Sometimes it feels like I’m hitting a brick wall... I get irritated easily and am quick to get frustrated and angry”.
The symptoms include an increased sensitivity to pain, fatigue and difficulties in sleeping. There are often also problems with memory and concentration, which is sometimes known as fibro-fog. Many Members mentioned those problems today.
For those who suffer from fibromyalgia, the symptoms are life-altering and the pain they experience is very real, but to the rest of the world—including the general population—the condition can sometimes seem invisible. We also know that many healthcare professionals find it extremely difficult to diagnose fibromyalgia, which helps explain why it is only on a case-by-case basis that the condition is recognised under the Equality Act. Many people face constantly having to go back to get diagnosed, making visit after visit to their GP practice, and the fact that the condition has many different symptoms relating to different areas of the body makes it even more challenging for sufferers.
There is no specific diagnostic test for fibromyalgia. Instead, there have been many accounts of sufferers facing years of referrals, MRI scans and so forth. Even if people are diagnosed with the condition, they are forced to wait for months, if not years, to receive treatment. Many hon. Members spoke about the urgent need for more research. One hon. Member—I am not sure whether they are still here—mentioned the research taking place in Sweden and the US, and called on the Minister to look again at how we can commit to more research into fibromyalgia, because we know that the condition affects so many people.
We know that there are many difficulties in diagnosing fibromyalgia. In response to the petition that my hon. Friend the Member for Chesterfield presented last April, the Government pointed towards the National Institute for Health Research. However, we know that fibromyalgia affects all aspects of life, so I will now turn to the impact it can have on employment. Fibromyalgia sufferers face difficulties in being able to stay in work and in getting the right support while they are in work. We know that the disability employment gap has remained at 30% over the last year. However, one of the best employment support programmes is the Access to Work programme. It ensures that those who suffer from fibromyalgia are actually aware of the programme, but it also raises awareness of its work among employers, because it can be a valuable resource for employers making reasonable adjustments for employees and for sufferers. Many people sufferers want to stay in work and can stay in work. I will continue to press the Minister to ensure that the Access to Work programme is adequately funded, so that more funding is available for those suffering from fibromyalgia.
We have heard many accounts from many Members today that show that it is not only employment but social security that is a huge problem for people suffering from fibromyalgia. We know that 3% of PIP claimants have fibromyalgia, of whom the vast majority are women. Assessments for PIP are carried out by private companies, and in some cases they have insufficient knowledge of fibromyalgia and the impact it has on daily life, because it is one of the “invisible” conditions. That is really important.
We know that the framework for the current assessment process, not only for PIP but for employment and support allowance, is flawed. Fibromyalgia, because it is a fluctuating condition, is not being picked up in PIP assessments, and we know that the assessment framework is failing far too many people. That presents challenges for sufferers when it comes to accessing that essential additional payment, which contributes towards meeting the extra costs of living with fibromyalgia. I say to the Minister again that we must listen to all the testimonies about how PIP affects people and we must recognise that the assessment framework is not fit for purpose. She must commit to reviewing it.
Finally, I will talk briefly about the Equality Act. Because of my own disability, I come under it, and there is no reason why fibromyalgia cannot also be seen as a disability under it. We know that fibromyalgia is assessed on a case-by-case basis, but in the future it is fundamental that the Act begins to recognise the impact that fibromyalgia has on people’s daily lives.
It is a pleasure to serve under your chairmanship today, Mr Bailey. I begin by paying tribute to Adrienne, who I believe is with us today in the Public Gallery. It is through her persistence and determination to use the mechanism of petitioning Parliament that we are here in Westminster Hall today. It is a really good example of how people all around our country can ensure that their voices are heard in this place, so I congratulate her on that.
I also pay tribute to the hon. Member for Chesterfield (Toby Perkins), because he picked up on that opportunity and worked with his constituent. I am very pleased to say, as my hon. Friend the Member for Southend West (Sir David Amess) and everybody else has done, that the hon. Member for Chesterfield is a champion. It is great that he has championed this cause, raised awareness of the issue and made sure that all of our public services are doing everything they can to help people with fibromyalgia, because we have heard today how absolutely debilitating the condition can be and how many people it affects.
Today has been a really good opportunity to build on the work that has been done with the petition and have this debate. I share the frustration that so many people have mentioned that we do not have time to address all the issues that have been raised and hear from the many people who have written to Members across the House because they want their individual voice to be heard.
Before this debate, I extended an invitation to the hon. Member for Chesterfield to bring his constituent into the Department. What we are discussing is a cross-Government issue; it affects the Equalities Office, which is the custodian of the Equality Act 2010. There has been much discussion about what more we can do about health services and research, so I will ensure that, along with me as Minister responsible for the main disability benefits, we have Ministers from the relevant Departments at a roundtable and summit, so that we can properly work with the information that has been provided today and with the great organisations that are undertaking research and standing up for those with fibromyalgia.
I pay tribute to my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns), and to the wonderful husbands who have spoken about wives who are suffering. It is brave of Members of Parliament to stand up and talk so personally about situations that have such a detrimental impact on them. It is difficult for MPs to admit to any sort of weakness; we live in fear of our constituents thinking less of us for expressing that we have a condition or disability that might be perceived as a weakness. However, it is vital that people with disabilities and health conditions are in this place, because they have an important role to play in society. I am absolutely determined to ensure that we have a society in which we focus on what people can do rather than on what they cannot, and in which they are supported to reach their full potential.
I will now draw on some of the points I have been asked to raise. On the support in the health service, we have heard that it is clearly too intermittent. I know that there are good examples; colleagues in the Department of Health and Social Care have told me that there are bespoke services for people with fibromyalgia, but we have heard from colleagues today that it is too much of a postcode lottery and that the services are not consistent. That stems from the fact, which has been recognised today, that it is a difficult condition to diagnose. Because the way in which fibromyalgia manifests is unique to each person, general practitioners want to ensure that they rule out the possibility of other conditions. We have heard so powerfully today that no two people are the same, so GPs, in the absence of a diagnostic tool, need to explore many different avenues before they can get to a diagnosis of fibromyalgia.
It is not just about the postcode lottery. Many GPs do not really know about the condition, and we need to get more understanding out there. My wife saw a number of doctors before she got a diagnosis. Also, her experience of gaining specialist help to access the pain clinic, which hopefully she will do later this year, was that she had to be referred to a rheumatologist to get a diagnosis and then was referred back to the GP, to refer her on to the clinic. That is a pretty inefficient way of doing things.
The hon. Gentleman makes a very important point, but I understand that to help GPs the Royal College of General Practitioners and Arthritis Research UK have developed an e-learning course on musculoskeletal care, which includes fibromyalgia and is free to all healthcare professionals. It aims to improve core skills in diagnosing and managing any musculoskeletal condition. A medical guide on diagnosis and treatment has also been developed by the Fibromyalgia Association UK, and a mandatory core component of all GPs’ training is an applied knowledge test. This AKT is a summative assessment of the knowledge base that underpins independent general practice in the UK, within the context of the NHS. The content guide for the Royal College of General Practitioners, which serves to prepare trainees for the test, includes specific reference to a required knowledge of fibromyalgia. Clearly, therefore, there is now a consistent attempt to ensure that GPs going through training and coming into general practice have a much better understanding of how to diagnose and treat fibromyalgia than we have seen hitherto.
Fibromyalgia affects one in 20 women, so it seems bizarre that so many GPs still do not know about it. Training for incoming GPs is clearly effective, and needs to be so, but an awful lot of GPs still possibly need retraining. Fibromyalgia is not the only such condition. An awful lot of GPs have never heard of endometriosis, for instance, which affects one in 10 women. Ought we not to have a system in which GPs are regularly trained in these additional diseases and conditions that affect so many?
The hon. Gentleman is right. There are so many conditions that we are beginning to understand, as more research and information comes forward, and continuous education for GPs is vital. I understand from the Department of Health and Social Care that such education is ongoing and that there is free learning material for GPs on fibromyalgia.
Will the Minister give way?
I am really tempted to give way to lots of colleagues, but the more I do the less time I have to address the issues that have already been raised. I have taken a number of interventions, but as the clock is against me I will now press on and try to address as many of those issues as possible, bearing in mind that there will be a follow-up meeting and, as always, I will write to those Members whose particular concerns I do not address in my few remaining minutes.
My hon. Friend the Member for Southend West invited me to invest. We clearly have long-term investment in the NHS, and plans for significant extra investment over the next 10 years have recently been communicated, with a disproportionate amount going into primary care and community services. Since each person is affected in such different ways, the pathway and range of care that people need will largely be co-ordinated in the community, with GPs. The new investment gives us hope, but alongside it we need to ensure that there is both education and training, and improved pathways. The one message I have heard clearly today—I know this from cases in my own constituency, of working with women affected by fibromyalgia—is that people are ping-ponged around the system, between physical and mental health services, with no joined-up care pathway. With so many other chronic conditions, the NHS has got so much better at having evidence-based pathways, so that once people have their diagnosis they understand the pathway they are on, and those who are able to support them know what support is available.
We need to take away and work on so much more from this debate. As many Members have said, it is about getting the ball rolling, ensuring that voices are heard loud and clear, and that we work across Government and the House to improve the quality of life of people with fibromyalgia.
On the benefit system, I want to assure people that fibromyalgia is recognised as a disability under the 2010 Act. It is really important for people to understand that. We have heard today that no two people are affected in the same way, so it is important that we have a person-centred approach to providing support, whether that is encouraging employers to be more aware of fibromyalgia and of the reasonable adjustments they need to make to enable people to stay in work, or looking at how the benefit system supports people.
The benefit system uses a person-centred approach, and I can absolutely reassure Members that the healthcare professionals who undertake the work capability assessments for the employment and support allowance, which is the income replacement benefit for people who cannot work, and the assessment providers for the personal independence payment, or PIP, which is a non-means-tested benefit for people both in work and out of work, have had training in fibromyalgia. A lot of that has been done in the past year, in association with voluntary sector organisations that have provided support. Members will know, because we are often in debates about improving PIP, that I am absolutely determined to ensure that we make the improvements to which we have already committed, so that everyone has access to the support they deserve.
When Members secure a debate, they always worry about whether they will fill the time, so it is great that this has been one of those debates that could have filled twice as much time. It is hard to pick out any particular contributions, but what the hon. Member for Morley and Outwood (Andrea Jenkyns) said was particularly compelling and, as the Minister said, the contributions from my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) about the impact on families were also powerful. We will take the Minister up on her generous offer. Thank you.
Question put and agreed to.
That this House has considered the recognition of fibromyalgia as a disability.
Pubs: Business Rates
I beg to move,
That this House has considered the effect of business rates on pubs.
It is a pleasure to serve under your chairmanship, Mr Bailey, and I am happy to have secured this important debate. Pubs, particularly our historic, independent pubs, add vibrancy and attractiveness to our high streets. They support tourism, help to encourage footfall and add hugely to our local economy. They are the lifeblood of my constituency and, I am sure, of many others. Pubs in St Albans generate over £40 million a year for our local economy; the industry employs 1,600 local people and pays around £20 million a year in wages. In St Albans and Herefordshire, we are net contributors to the Chancellor’s coffers. My constituents, particularly businesses in my constituency, are the Chancellor’s golden goose, and he therefore needs to listen carefully to ensure that that golden goose thrives.
I have been contacted by many local pub owners since this debate was announced, who have all shared with me their frustrations and concerns about the impact that business rates have had on their businesses. They are under huge pressure. The Government were absolutely right to target business rates as a way of helping small businesses, pubs and the high street as a whole, and the cut of 33% in rates for businesses with a rateable value of under £51,000 is a major step in the right direction. However, in some areas such as St Albans, that rate reform is not having the positive impact that the Chancellor was aiming for. Many landlords expressed the view that the new business rate formula, designed to help pubs, has had a perverse result, with a hike in business rates for their pubs. That hike could mean that they have to cut staff numbers, or even worse, close their businesses altogether.
I fully understand the point that my hon. Friend is making about business rates. I wonder whether she has calculated how much of the problem that pubs have is due to a change in drinking habits and why we go to pubs, and how much of it is actually due to business rates.
I have not calculated that, but if my hon. Friend waits for the rest of my speech, he will hear how the huge hikes in business rates mean that pubs would have to sell so many extra drinks that they cannot possibly make up for those hikes. The fact that some people are declining to go to our pubs is one issue, but I am talking about successful, thriving pubs.
I congratulate the hon. Lady on bringing this issue to Westminster Hall for consideration, and I support her entirely. With some small pubs experiencing a rate increase of some 80%, does she agree that we are at risk of losing the independent retailer—the one who takes the keys off the customer and will ring somebody to come and get them, and says when enough is enough? Does she further agree that this is something that is not provided by the off-licence or the supermarket chain, and that society will lose out if we lose the restraining hand of those small local pubs?
The hon. Gentleman makes an excellent point. Indeed yesterday, I took some representatives of pubs to meet the Minister with specific responsibility for this issue, and interestingly they were all from small independent pubs. The big pub chains can cross-subsidise in other areas if they are hit in this way; it is the small independent pubs, often run by one or two people who have put their lifeblood into those pubs, that are suffering. Those people are the ones whose voices need to be heard today. This cannot be the message that we are sending out as a Government. We must ensure that we are supporting small businesses, such as our smaller pubs, which drive our economy and play an important role in communities.
In high-value property areas such as St Albans, there is not a standard Government model that fits. The average house price stands at over £600,000: if a struggling business closes, it will quickly be snapped up by a property developer who sees it as a lucrative brownfield site ripe for housing, and often turned into an individual house or a pair of houses. That practice of turning commercial space into residential space is affecting businesses across St Albans with, for example, a staggering loss of office space over the past few years since the planning laws were changed. That is a double whammy for pubs. Businesses, particularly pubs, are struggling under the current system, and the new rate simply provides a cliff edge that penalises successful businesses in areas plagued by high property values. We must devise a system that helps all small businesses and pubs to thrive, not just the ones with low retail value.
The 2017 business rate formula for pubs uses a methodology for setting the rateable value based on a fair maintainable trade, which is a difficult phrase to interpret. The rateable value is driven mainly by the pub’s turnover. The calculation also takes into account property valuations in the area, which means that even small pubs, such as many of the pubs in St Albans that have been hit the hardest, can have a high rateable value because the area they are in has high property values. Sadly, the current formula does not take into account the many models of pub ownership that are often used by landlords and owners. That formula effectively penalises small business operators through an arbitrary taxation system that significantly reduces any profits a pub landlord can make while trying to pay staff wages and other costs.
I thank the hon. Lady for bringing this important debate before the House. We are at risk of losing our Glassford Inn, the only pub in its village, because of the issue that she has spoken about: the high rateable value of property in the area. It is the last business in the area, yet the rateable amount cannot be varied. Does the hon. Lady agree that this situation has to be changed to sustain these businesses over the long term?
I absolutely agree with the hon. Lady, because I do not believe that what she has described was the Government’s intention. As I have said, the formula does not take into account the current models: some of these pubs are leasehold, and some are owned; there can be no bigger incentive to sell a pub than knowing it could be worth a heck of a lot more as a house than as a pub.
Does my hon. Friend agree that there should be some business rate relief when a pub has been bought under the asset of community value scheme?
Actually, we have tried to save pubs under the asset of community value scheme, and we have not been successful in St Albans, because the developer wins every time. I can see the point that my hon. Friend is making, but I am not going to take a diversion down too many tracks about the price of beer and community assets. Pubs and businesses in my constituency want a fair system that does not, as the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) has said, discriminate against a business because it is located in a high-value area.
I completely agree with my hon. Friend regarding high-value areas. The Old Griffin Head pub in Gildersome in my constituency has business rates of over £21,000—that is in a little village. Does my hon. Friend agree that that is an extortionate amount of money, and that it is no wonder that 21 pubs are closing every week in the UK?
I absolutely agree with my hon. Friend, and that is why I think the Government need to hear why their best intentions have not hit the mark. As I was saying, and as the hon. Member for East Kilbride, Strathaven and Lesmahagow has described, pubs want a system that does not discriminate against businesses because they are in high-value areas. That is especially the case when they see a neighbouring, lacklustre pub—and by “neighbouring”, I mean literally three doors down in my constituency—that seems to have either had poor management or low investment, but perversely has benefited from a rate cut. How is that for a trading market? Hard-working landlords of successful pubs are penalised for their strong personal investment; they are enduring eye-watering rate hikes for their trouble.
The hon. Member for East Kilbride, Strathaven and Lesmahagow mentioned high rates in her area; I suspect that anyone who comes to St Albans will take a deep gulp. This is not what they expect from a Conservative Government, or any Government, especially one that has recognised the pressures our pubs are under and tried to help. I accept that, as I was told yesterday, the formula potentially has helped up to 90% of pubs nationwide, but it only benefits 60% of pubs in St Albans, and for some of them, the benefit is only marginal. That leaves many of the small, independent pubs that the hon. Member for Strangford (Jim Shannon) referred to facing massive hikes. The formula must be revised. The current methodology for pubs and the high tax-rate multiplier are barriers to new investment in small businesses and pubs, and we have to tackle that issue and find a fairer formula.
In November, I visited several pubs in St Albans—I think it was 10; that is how easy it is to walk around the pubs in St Albans—that are being hit the hardest by these rate increases. The campaign group, Save St Albans Pubs, took me on a tour of the pubs that face huge increases because of the system.
One of the pubs I visited recently, The Boot, is a tiny heritage pub that, as has been pointed out, will have to sell an additional 22,000 pints to cover the additional £51,000 in business rates that it now has to pay. That is a 280% rate increase, which is unsustainable and unfair.
Mr Christo Tofalli of Ye Olde Fighting Cocks told me that unless we have proper reform and relevant taxes, licensing laws and duty costs, his pub is finished. He speaks from experience because he has already come in and pulled the Fighting Cocks back from being closed under a former owner and not trading. He has invested considerable money and effort in the pub since then and has turned a closed, failed business that was an eyesore in St Albans into a successful pub that is an asset. However, under the new model, his taxes and rates have gone up to such an extent that he is now personally funding his pub to keep it open. Who would run a business like that?
Ye Olde Fighting Cocks has seen an increase in its rates of 66%, or £33,000. I hope the Minister will appreciate that that is an enormous increase for any pub owner to cope with and it does not show the level of support that the Government said was needed for small businesses.
The Six Bells, another great pub in my constituency that I visited on my tour, had an increase of 87% in its business rates: £31,000 a year. It has 1,000 square feet of operational space, which is smaller than many people’s homes. It exists in a neighbourhood where the average residential property is valued at more than £1 million. It is vulnerable to property developers wanting to move in, as they did recently with The Blue Anchor, which was located in a similar area and has now turned into a house. As Alan Oliver of The Six Bells said in his letter to me, he simply wants a level playing field for his business. It could take up to three years for Mr Oliver to appeal the unfair rate revaluation system. Meanwhile, he faces enormous penalties. He told me:
“If we put our prices up our customers will go to the pub next door which has the same size and offering but which has not had a rate increase.”
How unfair is that in the trading environment that we tried to achieve? No wonder he feels hung out to dry.
The landlord of the White Hart Tap also wrote to me and said that he risked losing customers if he put his prices up. He, too, has invested significantly in his business, a small heritage pub. When all costs are taken into account, his annual pre-tax profits are £24,000, which results in £12,000 each for him and his partner. They take no other salary. Many pubs operate with a business model that pays about £12,000 to £15,000. It is not sustainable. Those are just two examples. I have all their details and will send them to the Minister.
In fact, 30 of the 50 pubs in St Albans have seen a rate increase. Astonishingly, they need to sell around 180,000 more pints per year to cover those increases. The Blacksmiths Arms has had an 82% increase and The Beech House a 59% increase, meaning they pay £74,000. I invite the Minister to come and see those pubs, which are less than half the size of this room. Pubs in St Albans saw an average increase in rateable value of more than £27,000. That is a 56% increase in rateable value since the business rate reform. So far, 10% of pubs in St Albans have closed because of such pressures. Sadly, further closures are expected. I know the Minister talks to representatives from the industry, but I am concerned, as has been indicated, that he is not hearing the voice of small independent pubs such as The Boot.
CAMRA, which is based in my constituency, recently provided a comprehensive submission to the Chancellor ahead of the Budget in September. It has called for a full review of the business rate system with regard to pubs. It maintains that the current system is not fit for purpose and a review is needed to tackle the unfair penalisation of property-based businesses like pubs, especially given the vastly reduced levels of taxation paid by online retailers. I hope CAMRA will engage with all the pubs I have mentioned today to ensure that everyone is singing from the same hymn sheet and that their voices are heard.
The British Beer and Pub Association has rightly pointed out that pubs pay 2.8% of the total rates bill, yet contribute only 0.5% of rate-paying business turnover. That is an overpayment potentially of £500 million. Not only are pubs hit hard by business rates, but many other shops on our high streets face similar rate hikes. Save St Albans Pubs, the campaigning group in my constituency, is calling for the 33% cut to apply to all pubs for the first £51,000 to prevent the cliff edge that I talked about. If there is an ambition to help all pubs—the Government believe 90% have been helped—why not help the other 10%? I seem to have a lot of them in my constituency and they are also in the constituency of the hon. Member for East Kilbride, Strathaven and Lesmahagow. Why not ensure that all pubs get the help that they need for a favourable trading environment?
I welcome the freeze on beer duty that was announced by the Chancellor. It will help pubs across the country, and it will certainly help many pubs where the margin is narrow, but it does not help to make up for the major hit on business rates that pubs in St Albans have to endure. As I have said, small pubs, particularly ones with 1,000 square feet of space, cannot possibly have enough people coming through their doors when they are already busy and trading to make up for the huge hike in rates. In the long term, Save St Albans Pubs is calling for a fundamental review of the business rates formula for small businesses, particularly pubs. It rightly points out that pubs are complex with various business models. It is not a one-size-fits-all tax. There are many examples, particularly in high-value areas, where property values drive up the rates, meaning pubs risk being closed.
The Government have rightly identified business rate cuts as a method to support our high streets and pubs. Now we must alter the system to make sure it works for all of them. I hope the Minister will take that on board. Time is running out for pubs. Three years to challenge a business rate is far too long. The whole idea of demonstrating a sustainable trading market is obviously not working. I hope the Minister will come to St Albans. I invite him—in fact, I demand he comes to do the same pub crawl that I did. Pub owners in my constituency would be delighted to welcome the Minister to their pubs so that they could show him their premises and tell him why the model has got to be altered in line with a fairer system that respects the heritage pubs that are the lifeblood of constituencies such as mine.
It is a pleasure to serve under your chairmanship, Mr Bailey. I thank my hon. Friend the Member for St Albans (Mrs Main) for securing the debate, and I do so for two reasons. First, this is an important matter; pubs lie at the heart of our local communities and the Government’s view is that we should do whatever we can to assist and support them. Although, as my hon. Friend the Member for Henley (John Howell) pointed out, there are issues other than rates at play when one looks at the pressures that pubs are under. Secondly, I know that my hon. Friend is a strong campaigner on these matters, and this debate is yet another reflection upon the assiduous approach she takes to her duties as a Member of Parliament.
Undoubtedly there are great pressures on pubs, as we have heard. At the same time we should recognise that there are some rays of light in the overall story. The Office for National Statistics has published data showing that the number of larger pubs—those that employ 10 or more—has grown since 2011. In fact, we now have the largest number since 2011. If we look at the pub and bar sector in total, we see that employment has grown by some 6% since 2008, to 450,000 employees. That does not mean that pubs are not under pressure, as my hon. Friend set out at length and in detail, so the Government have taken action, and she has recognised the things that we have done.
For example, in the Budget last year we introduced a discount of one third to the business rates for retailers, including pubs and bars that have a rateable value below £51,000. I know that my hon. Friend’s constituency is in a relatively high value property area and that the discount will not have had the same impact as it has had on the estimated 90% of all pubs and bars across the country. The figure for her constituency is 63%, so it is certainly the case that the majority of the pubs in her constituency are at least entitled to the discount of one third that we announced.
I encourage the Minister to come and see my pubs. Many of them are in historic listed buildings within a conservation area. They have small square footage and it is difficult to grow a business beyond the growth it has already seen. They are in areas where the house prices drive up their rates to an unsustainable level. I appreciate that some of the bigger ones—not the independent ones—have been helped, but I want to help all the pubs, and particularly the ones I have referred to.
As I said, 63% of pubs and bars in my hon. Friend’s constituency—typically those with lower rateable values, which probably correlates to the kind of pub she describes—will benefit from the one-third reduction that we announced in the Budget. That reduction will be worth about £900 million to the sector over the next two years. She also rightly referred to what we have done in freezing beer duty and spirit duty. In 2013 we withdrew the beer duty escalator, so the price of a pint is now some 14p less than it would have been otherwise, and we froze beer duty yet again in the last Budget. Across the country, around half of the income of pubs is driven by beer sales alone, so those are important measures. The further reliefs that we have been introducing come on the back of a great deal of activity, particularly since 2016. We have introduced a total of about £13 billion-worth of reliefs across the business rates terrain. That includes making 100% small business rates relief permanent, and doubling the threshold for small business rates relief in 2017.
My hon. Friend asked what we are doing for all the pubs in her constituency. That is a valid point. We have changed the uprating from the retail prices index to the consumer prices index. We initially announced that that would come in from 2020, but in the recent Budget it was brought forward by two years. That will lower the level of business rates right across the pub sector, irrespective of the size of the particular establishment. That is worth about £5 billion in additional relief over the next five years. We have doubled the level of rural rate relief to 100% from 2017.
My hon. Friend referred to specific examples of where there have been very large increases in rateable value—I think she quoted a figure in excess of 60% in one case. In 2017, at the time of the revaluation, we introduced the transitional relief scheme, which was worth some £3.6 billion of relief, to ensure that we smoothed out some of those increases. I would be happy to meet her at some point to look in detail at one or two of the examples she raised, which might be useful for us both. An increase in one year of more than 60%, given the transitional relief that would be available, would be on the high side, but I would be very interested to look at that with her in detail.
I thank the Minister for all the work that he is doing for the sector, which needs as much support as possible. Does he agree that it cannot be right that the rateable value of our Glassford Inn, for instance, is so high that even if it sold beer every night of the week to every single person in the village, it still could not pay the rates that have been set? Will he agree to look at that issue for me?
I thank the hon. Lady for her intervention. Of course, I am not familiar with that particular establishment—although I would probably like to be—or with its current trading conditions. My point is that a pub, or any business for that matter, will be under pressure for a variety of reasons—my hon. Friend the Member for Henley raised, for example, the change in drinking habits as one factor. Importantly, the Government have a responsibility on the tax front to ensure that we ease those pressures to the greatest extent that we can, while taking a balanced and responsible approach to the economy.
I want to raise the plight of some of the Gower pubs. Owing to the rural nature on the peninsula, many are closing and have great challenges ahead. As the Minister mentioned, those challenges are for a range of reasons, but several members of the community and I have set up a working party to address that. I look forward to informing the Minister of the good work that we will do.
I thank the hon. Lady for that intervention. I would be very interested in hearing from her and her working group when she is ready.
It is important to say that pubs are typically central to high streets. It is an issue not only of providing whatever support we can in terms of reliefs, many of which I have outlined, but of assisting high streets, and pubs as part of high streets, to evolve and transition. The high street is under a huge amount of pressure, not least through the online retail marketplace, which takes around 18% of all retail sales. A decade ago, it would have been a fraction of that.
The high street, and pubs at the heart of it, will therefore have to transition. That is why we made an important announcement in the Budget about the future high streets fund—£675 million to assist local areas to develop plans to ensure that they transition their high streets into a format that works more effectively. That includes the review being conducted at the moment into the change-of-use regime, and how it operates to allow certain businesses to change to different businesses, or to retail premises.
May I ask the Minister in the few minutes that are left specifically to discuss anomalies such as fair maintainable trade—where the rates of one pub are hugely increased and those of another, which is not making so much investment and effort in the community, are cut? It cannot be right that businesses that are trying their best are penalised. Fair maintainable trade is an undeliverable anomaly, as is the fact that it takes three years to challenge the rates.
My hon. Friend has astutely pre-empted my very next set of remarks, which relate to the fair maintainable trade approach to valuations. The British Beer and Pub Association has looked at that approach with us and is broadly comfortable with it. We recognised the importance of revaluations in the Budget. We have talked about bringing forward the next revaluation, and having more frequent revaluations so that we have fewer changes of a more dramatic nature.
On the way in which the system works, I think it is broadly a fair approach, because it does not take into account the actual value of the property; it recognises, however, the turnover that a pub can achieve if run appropriately. If a pub is extremely well run and is a very successful business, the Valuation Office Agency is not out to penalise the owners or tenants of that particular establishment in its valuations. There is an established check challenge appeal process through the VOA that can ultimately lead to an independent assessment of the VOA’s decision.
I would like to discuss the three-year point that my hon. Friend raised with her after the debate. If there are cases where it is the fault of the VOA that we are not responding across that period of time—of course, there are many reasons for delays that may come from either party—that would be of concern to me. With the VOA, we are in a position where the backlog of valuations, from when we had speculative valuations, before we changed the process, should all be cleared by September this year—and 1 million had to be gone through.
I thank the Minister for making various offers to talk outside the debate. Of course, the debate is being watched hotly by people in my constituency and outside it. I ask that the Minister commits to coming to St Albans, because those conversations need to take place with the people who are running the businesses. They are beginning to think that whatever they say is not listened to. I would like him to come and put to them the same arguments that he might put to me. I am not that closely involved, and would be unable to reply in the way that they could, so please will he come to St Albans?
The commitment that I will give my hon. Friend is that I would certainly be very happy to meet with publicans from her constituency, if she would like to arrange such a meeting. I have some very fond memories from many years ago of having many a very satisfying pint in Ye Olde Fighting Cocks. Perhaps we could discuss it afterwards. Whether I go on a pub crawl with her in her constituency is another matter, but I am certainly happy to meet her and the constituents to whom she refers.
Once again, I thank my hon. Friend for introducing this extremely important debate. She has once again ensured that it is very much at the forefront of the Government’s agenda. I hope that she will accept that we have done a great deal in this area to do what we can. Of course, we keep all taxes under constant review, and I will certainly bear in mind her representations at future fiscal events.
Motion lapsed (Standing Order No. 10(6)).
Local Government Funding
[Mr Charles Walker in the Chair]
Colleagues, I am extremely sorry for disrespecting your very precious time. You can admonish me afterwards, one after the other—it is unforgivable. I hope that you accept my apology, but I will understand if you cannot.
I beg to move,
That this House has considered local government funding.
It is a pleasure to serve under your chairmanship, Mr Walker. I declare an interest as a vice-president of the Local Government Association, a superb organisation that fights for the interests of local government on many levels, delivering services, empowering communities and investing in our future.
The Government’s obsession with austerity has targeted many areas of people’s lives in the UK, but the largest proportion of cuts has fallen on local government. I applied for this debate in order to ask the Government to recognise the folly of that approach and truly end austerity. As a councillor and council cabinet member, I have experienced the cuts at first hand. I have taken part in extremely difficult budget discussions and decisions in the face of increasing demand, which itself has been brought about by other Government policies that have made life harder for my constituents. I have also worked with local communities to try to offset and alleviate the most damaging impacts of Government policies.
To achieve real co-operative change in transport, housing and economic growth, however, councils and local communities need to be given sufficient resources and power. Under this Government, the opposite has happened: local authorities have had to cut staff levels, scale back many non-statutory services and try to save money in other ways. After nine years of cuts, first from the coalition Government and then from the Conservative Government, I am glad to see that the Government have now managed to find more money: an extra £1.6 billion has been found for 2019-20 in comparison with the initial funding plans set in 2016.
I congratulate my hon. Friend on securing this debate. Does she agree that on a day on which the House is debating Brexit, it is particularly galling that £4 billion is going into some sort of no-deal black hole while our children’s centres, libraries and important council services are all desperately at risk?
My hon. Friend is absolutely right. The Government can do it when they try—instead of wasting that money, which is the kind of money that local government absolutely needs right now.
I am sure the Minister will tell us that the extra £1.6 billion is a great success that shows that the Government are listening, but can he tell us why has it taken them so long to acknowledge the failure of their own funding plans? Before he says that everything is going to be okay, let us look at some of the facts: 361 of Birmingham’s 364 schools are facing cuts, almost a quarter of West Midlands police funding has been cut and, as a result of scything cuts since 2010, Birmingham City Council has lost £642 million from its annual budget and is expected to be forced to make further savings of £123 million per annum.
I thank my hon. Friend for securing this debate. Lewisham Council has had to make cuts of £165 million since 2010. Despite its best efforts, it now has to make difficult decisions about things like grants to the voluntary sector, libraries, street sweeping and lollipop people. Does she agree that central Government need to fund our councils properly so that they can serve the community properly?
My hon. Friend rightly describes the plight of her council, and it is the same for many councils up and down the country. I hope that the Minister will really take stock of hon. Members’ contributions today; it is great to see so many Members present to debate local government finance, which is such an important topic.
I thank my hon. Friend for securing this significant debate. As my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) rightly says, Lewisham Council has experienced significant cuts since 2010. Those cuts have had an effect on our Lewisham population; social workers’ caseloads have increased and we are seeing difficulties in securing beds for people with mental health problems. Does my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) agree that the Government need to stop making these silly cuts and start investing in local government?
My hon. Friend is absolutely right. I hope that the Government really listen to what Members say today about the devastating impact of cuts to councils in their constituencies.
Does my hon. Friend agree that the problem is not just the direct cuts to councils, but the extra services that councils are expected to take on? In my area, the NHS has stopped funding the low vision clinic, so Labour-led Brighton and Hove City Council has had to pick it up—whereas my other local council, Conservative-led East Sussex County Council, is refusing to do so, leaving partially sighted people with nowhere to go for the vital adaptations that they need.
My hon. Friend’s important intervention tells us about the plight of councils as a result of non-statutory services not getting the investment that they need. We will end up with councils delivering only statutory services, which will by no means meet the needs of our diverse communities.
In the context of Birmingham’s projected population growth of 121,000 by 2031, the cuts will mean even less money in real terms per person. Nor is the situation unique to Birmingham, as we have heard from many hon. Members across the country. The Institute for Fiscal Studies reports that
“funding from government grants, business rates and council tax is still set to be 1.4% (£0.6 billion) lower in real-terms than in 2015–16, which is equivalent to 4.2% per person after accounting for forecast population growth.”
Whatever the Minister and the Secretary of State may say, that means that councils will have less money to deliver services. This is not about the need to find minor efficiencies following a period of high spending; it follows a period of dramatic and coalition Government-enforced reduction of 22% per person, in real terms, in council spending on services between 2009-10 and 2015-16.
My hon. Friend is making a very strong case about the damage that is being done to local services by cuts in the Government grant. Does she agree that there is no resilience in local government’s tax base, which is strangling local democracy, and that there needs to be a reversal of the changes that were made in the late 80s and early 90s to councils’ abilities to raise their own money?
My hon. Friend raises an important point, which I will touch on later.
Not only was that devastatingly large amount taken across the country, but the spending cuts hit more deprived areas far harder than other areas, a point which I will come back to later. The Government often mock Members asking for more money for a particular cause, but that misses the point. These cuts are not just about money; they are about what the money allows local government to do, or not to do—it is about the services and support that local government can provide to empower communities and support individuals to fulfil their potential.
New research by Unison shows that 66% of local councillors do not think that local residents are receiving the help and support they need at the right time. Does the Minister understand that that is not because councillors and council workers are not working hard enough? Does he agree that the reductions of £16 billion to core Government funding between 2010 and 2020 have led to that situation? Will he make public all the data and analysis his Department have put together on the scale and variation of local responses to cuts, as well as on the impact of almost a decade of austerity on local government, and the inequalities it has reinforced and perpetuated?
What does the Minister say to Lord Porter, the Conservative chair of the Local Government Association? In the most recent copy of First, the magazine for local government—I have a copy that I am happy to share with the Minister—he said:
“Next year will continue to be hugely challenging for all councils, which still face an overall funding gap of £3.1 billion in 2019/20.”
That figure is not what is needed to make progress or to invest further in the future of our families and communities—that is just to stand still. Does the Minister agree with Lord Porter?
I know that universal credit is not the Minister’s brief, but I hope he will take the opportunity to discuss his understanding of the problems that universal credit is causing for citizens and therefore for local government. What analysis has the Department done of the impact on local government of rent arrears from council tenants on universal credit? Residential Landlords Association research reveals that the number of private landlords with tenants receiving universal credit and going into rent arrears rocketed from 27% in 2016 to 61% in 2018, with the average amount owed in rent arrears by the universal credit tenant rising 49% between 2017 and 2018. If there are similar findings for council tenants—there is no reason to think universal credit impacts differently on council tenants from those in private accommodation—local authorities will be put under further pressure by a failed Government initiative.
This is not party political. This is not about Labour councils wasting money, or Conservative councils being frivolous. Lord Porter said:
“Councils can no longer be expected to run our local services on a shoestring.”
Does the Minister think that those Conservative councils that have gone bust or reduced services to the legal minimum have received enough funding? Will they receive enough funding through the latest funding settlement? If so, does he think that they went bust because of their own failures—and will he outline those failures?
When the Prime Minister took office, she promised that the mission of her Government would be to tackle injustices. Since 2015-16, the most deprived councils have seen a cut of 2.8%, while the least deprived have seen a small real-terms increase of 0.3%. That is not tackling an injustice—that is embedding and reinforcing one.
My hon. Friend is making a fantastic speech. In Central ward in Hull, more than 47% of children live in poverty. That is one of the highest rates of poverty in this whole country. More people in Hull claim jobseeker’s allowance than the national average. At the same time, there have been £120 million of cuts. Does my hon. Friend agree that that could never be justified by any Government that are serious about giving every child equality of opportunity?
My hon. Friend makes a really important intervention. The figures are harrowing. I hope the Minister is listening carefully and will respond to Members’ interventions at the end of the debate.
Local government is not homogenous. The service needs of their populations, ability to raise revenue locally and reliance on central grants all differ substantially. Proposed and existing policies such as business rates retention and council tax limits will mean different councils can raise significant amounts, which may not match the spending pressures those councils face.
As academics from Cambridge pointed out in October 2018, the Government’s austerity politics have led to
“a shrinking capacity of the local state to address inequality...increasing inequality between local governments themselves and...intensifying issues of territorial injustice.”
Local authorities vary in the needs of their population for services, their reliance on central grants and their ability to raise local revenue. With the Department planning to introduce 75% business rates retention for all local authorities, and access to public services for citizens increasingly reliant on the local tax base—whereby poorer areas are not as able to provide as many public services or the same quality of infrastructure as areas with healthier, more wealthy tax bases—without a strong redistributive element, the under-investment, or even lack of investment, in communities and the people who live there will see them unable to prosper.
Will the Minister ensure that no council has its funding reduced as a result of a new distribution system? What actions will he take to that end? The National Audit Office has highlighted the dangers of bringing in a business rates retention model that has not been fully tested. Will the Minister commit to making public a full and thorough evaluation of the pilot schemes before committing to any further roll-out?
I could raise any number of areas where Government cuts to local government are causing immeasurable immediate and long-term damage—from homelessness to fire safety, from crime prevention to children’s services and public health. Reductions in any of those areas are not impact-neutral, as they influence and prohibit the capacity to prevent and support. As I was cabinet member for public health at Sandwell Council, I will focus on public health, and I hope my colleagues will pick up on other areas.
Councils’ public health budgets are being cut by £531 million between 2015-16 and 2019-20. The Government are taking with one hand, while, at the same time, putting more money into the NHS. Preventing illness and catching problems early so they do not develop further down the line will save the NHS and social care money, so the short-sightedness of cutting public health funding must be due either to ignorance, or to a political choice to undermine councils’ abilities to improve the health of the public. Which is it?
My hon. Friend is making an excellent speech. The underfunding of social care is a travesty in itself, but it also has consequences for our hospitals, including avoidable hospital admissions and delayed transfers of care. Does my hon. Friend share my concern that the cuts to local government funding are far-reaching and could have a profound impact on our NHS?
My hon. Friend raises an important point. The NHS spends only about 5% of its funding on preventive measures. That just cannot be right. As she rightly says, social care costs will soar, and that makes no sense at all.
The Government have announced that they will phase out the public health grant after 2020-21. Instead, they expect business rates retention to entirely fund public health spending. Health inequalities will increase. While they have proposed some kind of top-up system, as with many areas concerning local government, it is unclear how that would work and to what extent that top-up would support the local authorities that need it.
Does my hon. Friend agree that one area of particular concern is sexual health services, which are being particularly hard hit?
My hon. Friend makes a really important point. We need to invest more money in public health and not siphon it away from councils, for issues such as sexual health, drug and alcohol strategies, mental health—there are a number of issues, and I could go on.
Does the Minister agree that preventive services and approaches are the most efficient and effective way to improve outcomes for our residents and tackle many of the issues that they face? If so, does he agree that local government needs appropriate and sufficient funding to achieve that goal by providing frontline services and working with civil society to develop and sustain multi-organisation and agency approaches? If he agrees on those two points, does he believe that, as things stand, our local authorities have the resources necessary to deliver those services and approaches now and in the future?
I thank all Members who have attended this debate and who are waiting to contribute. The turnout reveals the depth and strength of feeling about this important issue. We all work with our local councils and know the vital services they provide and the work they put into care for our multitude of residents and citizens, particularly support for families, protection of children and care for older and disabled people. We all know that the Government’s current attitude and approach are not sustainable, and we need this Administration to wake up to that fact and address it properly.
I have waited until now to mention Brexit, which we must discuss and examine, if only briefly. The Government have committed billions to many Departments in preparing for Brexit. With the Treasury giving the Department only £35 million for preparations, will the Minister allay the fears of councils around the country by promising that any additional financial commitments and burdens that are placed on councils as a result of Brexit are fully funded by central Government? We need fully funded local government to drive many of the things that make Britain a great country in which to live and work. With councils already facing a funding gap of £7.8 billion by 2025, the Government must take the opportunity of the final settlement and the 2019 spending review to deliver truly sustainable funding to local government. Are they up to the challenge?
I apologise again to colleagues for my unforgiveable lateness. We will start winding up at 3.40 pm, so everybody should keep their speeches quite short, because there are about 13 speakers.
It is a pleasure to speak in the debate and to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this debate, and I thank her for her remarks. It is fair to say that she has covered a full gamut of aspects of local government. Like her, I pay tribute to the many thousands of councillors up and down the country who work tirelessly in their community as public servants, delivering some very difficult portfolios and in some very challenging parts of the country. At this time of year, councils across the country are in the process of finalising their budgets for the next financial year, which is why the hon. Lady’s debate is so timely.
My constituency covers three lower-tier authorities—Braintree District Council, Colchester Borough Council and Maldon District Council—as well as an upper-tier authority, which is Essex County Council. I pay tribute to all my colleagues at all the authorities, particularly Essex County Council, who are faced with a number of pressures, including growing demand on services—it is a theme that no doubt we will hear throughout the debate—and the overall impact of the Government’s financial settlements on them and on councils across the country. My colleagues at Essex County Council work very well with the Local Government Association, which has campaigned clearly and robustly on areas where more needs to be done. There is always scope for innovation, efficiency and transformation. Naturally, these local councils look to central Government to provide more certainty on the future of their finances and the level of support they receive from the Government.
Does the hon. Lady accept that one way central Government give certainty is by letting authorities that had the benefit of the retention of business rates know what the Government’s plans for the future are? At the moment, it is very uncertain.
I will touch on business rates later. The hon. Gentleman is absolutely right, and councils need to be getting on with their own plans.
With the comprehensive spending review taking place later this year, rate reform and the fair funding review—I know the Minister is well aware of this—the Government have the opportunity to consider carefully the various submissions and representations from local authorities. Compared with other local areas, we are underfunded in Essex not just through local government, but through our police and health services. I very much hope that the Minister and the Government will be sympathetic and understanding, and that they will use this as an opportunity to rebalance resources towards our county, particularly our county council, which has the responsibility for adults and children. Essex County Council is experiencing considerable budgetary pressures, which the Government will know about from the various representations that my colleagues across the county and I have constantly made to the Department.
Essex faces significant financial challenges in adult social care, which accounted for 45% of the council’s total spend from a budget of £646 million in 2017-18. The council is collecting over £82 million in fees and charges from residents, but budgets are being squeezed and it already faces demographic pressures and challenges. The number of people aged over 80 is set to grow over the next decade by 61%, and those over 90 by 100%. The council is facing rising costs as it seeks to provide support to around 4,000 residents with learning disabilities, including cases that are very complex to resolve. Its objective is to provide those residents and all citizens with a good quality of life.
On top of those pressures, provider costs for care packages are increasing while the supply of beds and residential accommodation by providers is falling. Some 362 beds were lost to the market in 2018 as seven care homes closed, and contracts from domiciliary providers have been handed back. These are continuous pressures on funding social care. We know that money has been put aside for social care, which is of course welcome, but it is not meeting the growing pressures and demands in Essex and around the country, too.
I hope to work with the Government and my councils to look at how we can constructively address these pressures and constraints. The council faces pressures on education and special needs in addition to social care. I appreciate that this issue rests primarily with the Department for Education, but resources are being squeezed and I have many concerns. I have a vast number of constituents coming to me, and it is pretty clear that their needs, challenges and concerns are not being met in the way that we as a Government would like. The council has been proactive in its own representations to Ministers, and I very much look forward to the Government working with it.
The hon. Member for Birmingham, Edgbaston made a strong and important point on public health. Across the country—I see this in Essex—we are seeing pressures on public health. We can do much more to prevent many of the pressures on A&E, our hospitals and GP surgeries. One of the greatest challenges that we face, which relates directly to planning, is that the population of my constituency, and the number of houses, is growing. We have to meet those challenges by ensuring that the right kind of support goes into public health and infrastructure provision, so that we can get a new health centre for primary care in Witham and invest in our roads and in other aspects of local amenities and public services, too.
I come back to the point on education. When the provisional settlement was announced last month, Essex County Council was very keen to ensure that it was part of the pilot round for local business rates. It was pretty disappointed not to be, and I make a plea to the Minister for some kind of reconsideration or to ensure that Essex features in future schemes.
Essex is a county that constantly innovates. We want to strive for excellence while delivering value for money and meeting our service requirements to deliver to the public. There are endless pressures. Across the county of Essex, there are some big challenges that we want to work on with central Government to look for innovative solutions and ideas about how we can address many of those concerns.
It is a great pleasure to serve under your chairmanship, Mr Walker. I pay tribute to my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this important debate. It is a pleasure to follow the right hon. Member for Witham (Priti Patel).
We have heard many worrying examples today of how eight years of Government-imposed austerity and cuts to local government funding have damaged communities up and down our country. Sadly, and not surprisingly, that is also the case for our community in Enfield. Since 2010, Enfield Council’s central Government funding has been slashed by £178 million—a cut of £800 per household in the borough. If we had known that in 2010, we would have dismissed it as completely unsustainable.
Enfield’s adult social care budget has been gutted by £30 million since 2010, and there was a loss of £3.2 million from Enfield’s youth services budget between 2011 and 2016—a reduction of more than 57%. Almost every school in Enfield faces further cuts to their already stretched budgets. By 2020 they will have lost £12.5 million due to central Government cuts—a reduction of £273 per pupil. The Government’s willingness to cut those services is denying a generation of young people the best opportunities in life, and making it much harder for them to realise their potential and achieve their aspirations.
On top of that, Enfield Council is being forced to find another £18 million of savings next year. To put that in context, £18 million is more than the council’s current combined net spend on housing services, parks and open spaces, leisure, culture and library facilities. Our Labour Council is doing all it can to protect our local public services, and squeezing every penny to make ends meet, while having to cope with increasing need and the demands of a growing and ageing population. Some 34,000 young people in Enfield are now living below the poverty line, food bank usage has rocketed by 13% in the past three years, and the borough now has the highest eviction rate in London. That is the background to the cuts.
When the Government make cuts to Enfield Council’s budget, they are making a clear choice: they do not see the needs of local people as a priority. That is also reflected in their position on community safety. The cuts have had no greater impact than on our police service and the safety of our communities. Whenever I talk to people on the doorstep about crime in Enfield, as I did this Saturday morning—nobody in north London is unaware of the situation—many residents tell me how concerned they are about rising crime in Enfield. They have good reason to be concerned, as violent crime has soared by more than 90% since 2010—the figures sound unreal. In the year to November 2018, there was a 20% spike in knife crime offences in Enfield, compared with a 1.1% rise across London. We are at the top of that league table, where nobody wants to be. In the same period, our borough saw the highest serious youth violence rate in London—up almost 9%, in contrast to a decrease of 5.2% across the capital. I think we can make a special case for Enfield, alongside the case for London and the rest of the country.
Neighbourhood policing should be at the heart of our communities, but the Government have cut the Metropolitan police’s budget by £850 million since 2010, resulting in the loss of 3,000 police officers and 3,000 police community support officers across London. The Met is expected to make a further £263 million cut by 2022-23. That has led to the loss of 241 uniformed officers from Enfield’s streets over the past eight years.
Enfield’s Labour council has funded 16 police officers from its own budget to ameliorate that loss and tackle crime and antisocial behaviour. By working with the Mayor of London, Sadiq Khan, the council has secured a second dedicated police officer patrolling the streets in every ward of Enfield. We cannot blame the people of Enfield for thinking that Ministers are reducing the priority they place on keeping our young people and our communities safe, given the Government’s staggering cuts to the police budget.
To tackle the rise in violent crime, we need a fully-funded, multi-agency approach. That means properly and adequately funding the police and local government, which has an important role to play. As I have set out, those agencies and our public services are being put under severe financial pressure. The Government should be ashamed. The effects of eight years of austerity have been laid bare. They must end the cuts to Enfield’s public services and invest in our communities and in our children’s futures. Until that happens, I fear that the safety and aspirations of people in Enfield will continue to be put at risk. We will continue to see rising crime, youth violence, knife attacks, loss of life, serious injury, robberies and muggings.
No matter what Enfield Council and the Mayor of London do to address the situation, the ultimate responsibility and solution rests with the Government. Only they have the resources to provide our communities and our public services with the financial support they desperately require. I hope that the Minister will address those issues, and that the Government will prioritise properly funding our councils and public services.
There are still plenty of Members who want to speak, and the winding-up speeches will start in 35 minutes. I will let the debate run for an extra two minutes—I will not deprive Members of two minutes—but we need to manage time a bit better.
It is a pleasure to serve under your chairmanship, Mr Walker, and to speak in this debate. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing it. She made some excellent points, particularly about the challenges that local government faces in prioritising public health spending. In respect of any contributions relating to health, I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests: I am a practising NHS doctor and a member of the Royal College of Psychiatrists.
It is undoubtedly the case that when austerity began almost a decade ago there was a need, in view of the economic situation that the country faced, for some belt-tightening and efficiency savings in local government and elsewhere in the public sector. We all have to accept that that was inevitable at the time, but nobody envisaged that the period of belt-tightening would last almost a decade. During that period we have seen an unprecedented squeeze on NHS and local government finances.
The Government talk about devolving powers to local authorities, but it is very difficult to give local authorities the responsibility to deliver more services without adequately funding those services and those that local authorities are already delivering. There is talk of improved integration between health and social care, and between the NHS and local authorities, but in fact we have seen a retrenchment of the delivery of services by many local authorities. As their budgets are squeezed, they have not had the money available to better join up and integrate services with the NHS. Patients have suffered as a result, particularly those with long-term conditions and disabilities, at both ends of the age spectrum.
I will talk briefly about some issues that are important to all Members, including the challenges that local authorities face in delivering improved care for people who are homeless or street homeless, which is a growing problem throughout the country, including in Suffolk and Ipswich; the challenges faced by addiction services; and the challenges faced by social care. The Government are rightly talking a good game on homelessness—they want to do more—but street homelessness is continuing to rise. The failure to tackle it is a result of both a lack of joined-up thinking and a lack of funding in the right places.
In particular, funding for addiction services has been squeezed. Many people who are street homeless have challenges with drug and alcohol dependence, but the funding to help them address those problems is simply not there. In addiction services, access to and funding for certain medications is being severely squeezed. Housing pressures, particularly in urban areas, mean that long-term solutions to tackle street homelessness are not there. The welcome changes that the Government put into place have failed to manifest in any meaningful change, and street homelessness continues to rise.
At the same time we see addiction services cut off completely from NHS care and working in a silo. There is a complete failure of joined-up thinking. I know that the Minister is scrolling through his iPad, but he would do well to listen to this point, because there is a failure and a lack of integration between what is happening in the NHS and mental healthcare and addiction services. There is a silo mentality in commissioning; local authorities commission addiction services and mental healthcare is commissioned by the NHS. That was a failure of the Health and Social Care Act 2012, and I urge the Minister to look at that if he wants to meaningfully improve care for people with addiction problems and begin to tackle the problems that a lot of street homeless people face.
Finally, on the issue of social care, we have an ageing population with multiple medical comorbidities—some 3 million people in England now have three or more medical comorbidities. That is a huge financial challenge not only for the NHS, but for social care. In spite of that growing challenge, at the other end of the age spectrum, thanks to improvements in modern healthcare, children with what would have been considered terminal illnesses often now live into their teenage years and sometimes into adulthood. Because of those twin challenges, the social care system faces unprecedented financial demands in delivering better care, yet funding for social care has been reduced by billions of pounds over the past few years.
Without that funding, the integration that the Government speak about will simply not happen. There will not be integration of health and social care. Money will continue to be diverted into acute services. One-off spending on winter pressures is all very well, but it does very little to address the chronic financial and human challenge that this country faces in improving and joining up better care for people with long-term conditions.
Welcome soundbites from the Government are all very well, but we need to see delivery on the ground. We need legislative levers to help drive better integration and we need the funding to back it up. Without the money, local government will be unable to deliver improved care, let alone continue to deliver the care that it does at the moment. I urge the Minister to look at the local government funding settlement, at the legislative levers and at what more can be done to support local authorities to raise additional money at a local level to help fund important local services.
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this important debate. Local government services are integral to building the vibrant, inclusive communities that our constituents deserve. They are also vital for safeguarding the most vulnerable in our communities and ensuring that no one is left behind. It is for precisely those reasons that I am sure many Members will share my frustration at seeing their communities’ potential sapped by wave after wave of Tory austerity. As a former councillor in my constituency, I know only too well the scandal of local government underfunding. Warrington Borough Council has faced budget cuts of £122 million since 2010, and by 2020 it will have to save at least another £38 million.
In Scotland the situation is exactly the same with Tory austerity cuts, and the Scottish National party simply follows the Tory line in Scotland. I hear exactly the same stories all over Britain. It is time to give the councils money and get poverty off the streets.
I agree totally with my hon. Friend.
Warrington is one of the lowest funded of the 91 unitary and metropolitan authorities outside London, and it is the second lowest funded in the north-west. Cuts have been imposed on the local authority while pressure on services is growing. People are living longer and the borough’s population continues to rise. I commend Labour councillors from my constituency who, despite having to make difficult decisions in such challenging circumstances, have always tried to put fairness and the need to protect vulnerable people ahead of politics. Sadly, that is not enough to stem the tide of disastrous Tory cuts. Critical services such as adult social care and children’s services are coming under severe strain. Preventive measures that seek to reduce the long-term overall cost to the council have to be cut. The Government must surely recognise that that is not the way to provide services to an ageing population with increasingly long-term needs.
The Government have also tried to offload blame for their cuts on to local councils by shifting the burden on to the taxpayer. My constituents face council tax rises of 6% to mitigate the impact of the cuts. However, in order for services to run effectively, the council would still require an additional £30 million because of cuts in central Government funding. Warrington taxpayers are paying more and getting less because of the Government’s austerity agenda. In October last year the Prime Minister declared that austerity was over, but I cannot see that it is over. How does the Minister justify that statement to my constituents, who face yet another round of spending cuts and tax increases in the new year?
While the Prime Minister was announcing the end of austerity last October, more than 5,000 councillors signed the Breaking Point petition, calling on the Government to cancel their planned cuts for the new year and immediately invest £2 billion in children’s services and £2 billion in adult social care to stop those vital services collapsing. The Government must heed the advice of local representatives from all over the country by investing properly in our communities.
At the general election, Labour pledged £8 billion extra to fund social care, alongside an additional £500 million a year for Sure Start and early intervention services. If the Government are serious about ending austerity, that is the kind of investment that local government requires to rejuvenate our communities after eight years of crippling austerity.
We have an east of England flavour on the Government side of the Chamber. It is a great pleasure to be the second Essex woman to speak in the debate and a great pleasure to be an Essex MP. I am constantly impressed by the exceptionally good work in my parish councils, and in Chelmsford City Council and Essex County Council. The county council has been ranked in the top 10 of the most productive councils in the country and is celebrating a huge achievement in getting an outstanding rating for children’s services. The Ofsted report for children’s services talks about the inspiration provided by senior leaders and the importance of the political support given to them. It discussed their tenacious ambition for our children and how social workers are passionate about improving outcomes for them. Such tireless work is absolutely vital to focus on the most vulnerable. The outstanding ranking is for preventive services and the focus on getting early help to those who need it. In Essex, we know that top-class services are not just about pouring more money into the system. It is also about being really focused on the outcomes.
I agree with the hon. Lady that the issue is not just about pouring money into services, although I wish we had the money to do that. It is also about having the funding to employ and skill up a workforce. Does she agree that we face not only the loss of frontline services, but the skills and knowledge of local government officers, many of whom have been made redundant in many of our local authorities, such as Colne Valley, my authority? The skills and knowledge are not there to advise local communities because all the local knowledge has been lost.
I agree about the importance of local services, but the lesson from the restructuring of children’s services in Essex was that they became an outstanding service through a focus on the most vulnerable, who most needed support. When they were focused more broadly, and were not necessarily so targeted on the vulnerable, they did not achieve the same outcomes for the young people who really needed them.
I shall not say that there is not a challenge in Essex County Council. Indeed there is. There is huge pressure from population growth, inflation growth and increasing demand for services. The county council is announcing today that it will increase council tax by just under 4%. It would dearly have liked to be in the pilot scheme for business rate retentions, and is disappointed not to be. There has been some more money from the Government, which is welcome, for winter pressures, social care and highways, but those have been short-term amounts. They are not for the long-term planning that is needed.
As my colleague and neighbour, my right hon. Friend the Member for Witham (Priti Patel) pointed out, the impact on adult social services is severe. About 45% of the county council’s budget is spent on adult social services. We are expecting a nearly two-thirds increase in the number of over-80s in the next decade, and a doubling in the number of over-90s. Seven care homes have been closed and while the county council has tried to minimise the impact of that, and to support those who are affected, the impact on residents is necessarily huge. We need a longer-term solution for the funding of adult social services. The council is making quite sensible, radical changes in its thinking on insurance schemes, lifetime individual savings accounts, possibly more of a local sales tax, and other ways to take the business rate retention scheme to the next level. We need to focus on that.
We are a rapidly growing part of the country. In Chelmsford, it is planned to build about 18,000 homes. We need those new homes. People want to come and live in the county, and we need to help young people on to the housing ladder, but we need the infrastructure to go with it. The county council is spending about a quarter of a billion pounds this year on roads, and primary and secondary school places, but there are some long-term projects, such as our second railway station and the north-east bypass. Those are infrastructure projects for which people have waited decades, and they are vital to go with the housing. I wanted to pick up on the point about homelessness raised by my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter).
Order. Will the hon. Lady begin to wind up, just to be generous to other Members?
Yes, I will, Mr Walker; thank you.
There are huge pressures in tackling homelessness. Local charities work hard, but they need more support from Chelmsford City Council. It is the only city that has not had extra support for homelessness. We have projects to secure more social lettings and supported housing, and more help for those at risk of becoming homeless. I hope that the Minister will see that those funding bids are granted.
We have seven speakers in 16 minutes, so I shall let colleagues divide that among themselves.
It is a pleasure to serve under your chairmanship, Mr Walker. I declare an interest as I am a vice-president of the Local Government Association. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing the debate. I have the enormous pleasure of co-chairing the Labour friends of local government group with my hon. Friend. I hope that the group will use opportunities such as this debate to shed light on the funding realities that councils face.
As a former councillor, I know at first hand the enormous pressures that councils face. I became a councillor in 2012, just as the austerity measures were about to be implemented. In 2014, I was appointed to the cabinet with the children and young people portfolio. It was not an easy time. Owing to the cuts, some difficult decisions had to be made. One included Sure Start. I was adamant that we were not going to lose our much-valued Labour policy, but I knew that changes were needed to ensure its survival. Those difficult decisions are made every day by councils, but they do not often receive the same publicity and attention as the decisions we make here, despite the enormous consequences for our constituents’ lives.
The coalition Government of 2010 knew that. They knew that if they heaped responsibility on to local authorities without the funding to deliver, councils would take the blame for cuts. There have been budget cuts of £160 million to the budget of our local council alone. That means that every year, £160 million has been taken. It would have provided services that we rely on. The £160 million has been found from libraries, roads, bin collections, social care and children’s services. Those are the stark decisions that councils are forced to make, and they all have far-reaching consequences. To put the challenge into perspective, by the end of the year, local authorities will have lost 60p in every pound from the funding that Government used to provide.
There is no light at the end of the tunnel. The Government want councils to be more and more self-sufficient, which means there will be less in grants from Government. Under the Tory proposals, areas less able to raise council revenue will have less to spend. Areas with the highest demands and council pressures will not have the budgets to cope. It is likely that in areas with the least pressures there will be council tax reductions. The Government tell us to trust them on the funding formula that we have yet to see, but with their record how can we possibly trust them?
Such pressing challenges are the reason why my hon. Friend the Member for Birmingham, Edgbaston and I established the Labour friends of local government group last year. It brings together councillors, MPs and stakeholders to call out the Government for their recklessness, and so that we can support one another and share ideas on how hard-working Labour councils can continue to deliver quality services despite Tory austerity. Most of all, we came together with one united message: hard-working Labour councils are not to blame for austerity and we have a duty as Labour MPs to make that crystal clear.
Councils are critical to our constituents’ social mobility, and to boosting young people’s life chances, but the Government’s contempt for local government, which is shown in their underfunding and under-resourcing, is restricting the economic and social transformation that town economies such as Leigh desperately need. I welcome the debate as an opportunity to highlight the damage caused from Westminster by Tory handling of local government, and the enormous challenges that the next few years will present to councils. We desperately need a fair funding settlement for councils that will not just give them the bare essentials to cope, but will utilise our incredible councils to get the best out of their areas.
Will everyone do three minutes each? The Opposition Front Bench has given me back six. Clive Lewis, three minutes—please.
I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this debate on an issue that affects communities and constituencies across the country. The latest stark example of what we are talking about is the plan by Conservative-led Norfolk County Council to close 38 out of 53 children’s centres, including three out of five in my constituency. At the same time, without a hint of irony, the Government have designated Norwich an opportunity area, to increase social mobility. I politely advise the Minister that trying to improve social mobility while targeting early years provision for such cuts is a bit like trying to fill a bath without a plug—an impossible, Sisyphean task.
There is no doubt that the proposals will hurt some of the most vulnerable people in the city. At a Norwich children’s centre I heard from a mum how, following a difficult and traumatic birth, support from the centre protected her mental health. Another parent who had fled domestic violence told me that her centre was a safe place to go when she needed it most. No one judged her and she was able to get specialist help safely and quickly to protect her children. I also spoke with a mother who had a learning disability and epilepsy. She told me how the outreach provided by her centre before her child’s birth gave her the skills and confidence to join the ante-natal class. She said, “It made me feel normal, like the other mums, like I fitted in. I made friends”. Where are they expected to go if their local centres close? What is the future for their children if the centres are shut?
A long, complex path has led to where we are today. Between 2011 and 2019 Norfolk County Council made £364 million of cuts. Over the same period, the council had to absorb additional costs of £386 million. Despite facing huge cuts under the previous coalition Government, between 2013 and 2016 the Labour-led administration at County Hall managed to keep every children’s centre open and protect the budget of £10 million a year. Tories at Norfolk County Council now want to halve the budget for children’s centres to £5 million a year.
Local Conservatives are trying to con us by stating that they can make such a cut and close most of our children’s centres but still provide a good service, and they justify the closures by saying that replacement services will get to the people who need them via outreach. Given that those centres already provide outreach, as well as helping people who come into the centre, how can we expect them to provide the same level of support when funding has been decimated?
It is well known that for every £1 invested in early intervention and in places such as children’s centres, the state saves £13 further down the line. Children’s centres plug the gaps left by other services that have already been cut. People in my city do not want their children’s centres to be shut. It is beyond doubt that closing so many centres will cause great harm to parents and children in Norfolk, and there was a bitter irony in Tory county councillors citing cuts by their own Government as the reason for those closures. They may try to pass the buck, but the blame rests with them both.
Let us consider the challenges that this country and our children will face in the coming century, such as climate change, the loss of biodiversity, rampant inequality, threats to our democracy, and undreamed of technological changes. Surely it is nothing less than criminal to pursue policies that will cut the social and educational tools that people will need to navigate their way through those coming challenges.
Fantastic. There are five speakers left, which means about two minutes and 25 seconds each. Let’s go.
Thank you for chairing this debate, Mr Walker. Although £44 million has already been wiped from York’s budget, another £4.1 million will go this year—hardly austerity coming to an end. Local authorities are the game changer for introducing early intervention and prevention into a system. Thanks to a perverse decision by my local authority, the budget to tackle substance misuse was slashed by 25%—a £2 million budget lost £500,000—even though we have the highest level of deaths due to substance misuse in the country. We see the consequences of such cuts across York, and I can give many such examples.
York also has the worst funded education in the country. Schools are on tight budgets, and that is matched with the highest level of attainment inequality in the country. Such a diminution in funding has consequences that are harming my community, and I implore the Minister to put his money where his mouth is and end austerity by ensuring that local authorities have the resources they need to transform our communities.
Labour councillors across York are ready to transform our city, with incredible ideas about early intervention and prevention. Without those resources, however, they will be constrained, and if we are to see a game changer in the way our society works, we must make the right choices. In particular, I reflect on housing investment in our city. Hardly any social housing has been built in York since 2015, and that has had serious consequences for many other factors. We need only turn to the work of Michael Marmot to know the impact of such policies on public health. We need not only resources but the right leadership to make real changes in our community. This debate is just a start, and it is important to follow it up. I would welcome a meeting with the Minister to talk about the difficult issues and challenges our city faces, because the funding formula is not working across the board.
Finally, the business rates system has failed our community. It is driving people away from the high street, which has a perverse effect on the income received by local authorities. We urgently need the review that was promised two years ago, and I implore the Minister to speak to Treasury colleagues so that that comes to fruition.
Last year’s bankruptcy of Northamptonshire County Council was the first of many, and although the Government’s answer to it may have been well meaning, it involved a totally pointless reorganisation that was a little like shuffling the deckchairs on the Titanic. A crisis in local government is also coming to my local authority. East Sussex County Council, which covers just over a third of my constituency, is following a similar path. It has declared that it can make only a core offer to meet its basic statutory duties to the very vulnerable, thereby undermining the principle of universality and its social contract with residents. The most vulnerable people will still be affected by cuts in East Sussex, with cuts to meals on wheels, which have gone in many places, the end to the locally supported bus service, and the closure of libraries and many residential centres—we have about heard that in other areas as well.
It is shocking and shameful that the most vulnerable and lonely in our society are being forced into further isolation, and it has been reported that the cash shortfall at East Sussex will leave the county bankrupt in under three years. We will see the human consequences of that dire situation for many years to come. Recent cuts to services for disabled children have led to the charity Embrace East Sussex being forced to pick up the pieces, and parents now have to crowdfund for clubs and support for their children. Local parish councils have to provide the medical support for disabled children that would otherwise have been provided by the local authority. How have we arrived at a situation where our communities rely on voluntary groups and crowdfunding donations to support our children?
East Sussex County Council has planned to cut £854,000 from safeguarding services such as training programmes, and numbers of social workers are to be slashed, leaving families vulnerable. We are literally putting our children in harm’s way. The council acknowledges that more children will now be subject to child protection plans and stay longer in care because of those cuts, which in the end will cost both us and our children’s future more.
Both in Westminster Hall and the main Chamber I have spoken regularly about the £1 billion cuts to youth services nationally, which is a real problem. In Brighton and Hove the local authority spends all its council tax budget on adult social care. We need a new funding formula. Funding for adult social care needs to come directly from the Government or the NHS. We must transform the way it is funded.
Since 2013, Nottingham City Council’s main Government funding has been cut by three quarters, from £127 million to £25 million. Even worse, at the same time as the Government have been handing out extra cash to some Tory shires, cities such as Nottingham that cope with high levels of deprivation have been disproportionately hit. For example, in 10 years Surrey gained £19 per household while Nottingham lost £529.
The cuts come at a time when the council faces rising demand for its services, especially adult social care and child protection, and that inevitably means cuts to vital frontline services. Last year the city was forced to cut public health programmes to help people lose weight or stop smoking. It cut youth and play services, and there have been new restrictions on bus passes for disabled people. Fares on supportive buses have increased, and there are higher fees for leisure centres and other services. It is all short-term and self-defeating in the long run, as it will place extra burdens on our NHS, police, and other local services.
One of the most visible changes is the increase in rough sleeping. In 2010, when Labour left government, Nottingham city had an estimated three rough sleepers per night. This year that number has risen to 43. Despite the fantastic work done by the council, it faces an incredible challenge. That is just the most visible element and affects only 5% of the total number of people who need help with housing. In Nottingham, 15 families a week present as homeless. Is that any wonder, when the local government’s housing allowance cap has been frozen since 2016 and will not rise until at least 2020?
The Government say that properties can be found for £42 or £54 per week, but recent research by Advice Nottingham found that the cheapest house was £63 a week—£20 more than the Government claim. For a family of four who need a two-bedroom house, Advice Nottingham found only two homes in the entire city that fell within local housing association rates. Social housing is an ever-rising demand to add to that list.
The cuts keep coming. Nottingham City Council is currently undertaking its budget consultation for this year—I wonder whether the Minister can advise us which vital services he would cut next. I hope that he is listening and will consider the damage that cuts to local government funding have already done and will continue to do to my constituents and my city. It is time for that to change. It cannot go on.
I call Jamie Stone, who has three minutes, before Emma Hardy, who will also have three minutes.
Thank you, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on what was a very eloquent speech indeed. Much of what I am about to say has been summed up in a characteristically pithy intervention from the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney). As a Scottish Member, the question for me is: “Where are the Scottish Government in this debate?” It perhaps speaks volumes that we do not have any Scottish National party Members with us today—enough said.
It would not be normal if I did not talk about the remote far north of Scotland, so I will do so again. We face enormous problems in the Highland Council, of which I was a member until I was elected to Parliament: we have a sparse population, huge distances, inclement weather; and the sheer cost of services and goods. Those elements militate against running the council cheaply. Over the last four years that I was a councillor, I found the cycle of going through budget cuts year after year a sickening process, because we felt that we were cutting right into the flesh, blood and bone of what we were trying to do for the good of constituents.
Of course, I take heed of that fact that it is a devolved matter, but I want to make two points arising from it. First, the settlement that the Scottish Government give councils such as the Highland Council is questionable, but they are not here to answer that point. Does the settlement from the Treasury to the Scottish Government accurately reflect the needs of Scottish local government? Would the Minister consider an audit of the money that goes to the Scottish Government and how much is actually delivered to councils to become council services?
As I want to leave some time, my second and final point is simply this: I recognise that local government is the foundation stone and building block of proper democracy. If the public’s faith in local government is damaged, we damage something that is so important to the way the country works: our democracy. Even on tempestuous days such as today, that democracy is hugely important and, I believe, an example to the world.
Thank you. Last but not least, I call Emma Hardy.
Thank you very much, Mr Walker. I stand here to represent an incredibly proud city. I hope that the Minister bears that in mind, because I am asking not for the Government’s pity about the poverty faced by people in my city, but for fairness and justice, and for the Government to acknowledge that not everybody lives in the leafy shires. I am sorry, but the suggestion that one solution could be greater investment in ISAs is so breathtakingly out of touch that it shocked me.
In my city of Hull we have the lowest average weekly wage in the country, at only £376 a week. The cuts to local government are devastating my city and creating a huge problem for the children living there. The Government talk a lot about the importance of social mobility, but those are meaningless words if people are not given equality of opportunity. My point about fairness is that there is deeply entrenched regional inequality, which is shameful to the country.
In an earlier intervention I mentioned that in one of my wards—Central ward—over 47% of people live in poverty. In my constituency there is an average life expectancy difference of nearly 10 years—the number of years that someone is expected to live a healthy life is lower in Hull than in other areas of the country. That should shame the Government into action.
Another problem is that we have £1,300 less per pupil spending on schools than in the rest of the country. We cannot rely on increasing local council tax to plug that gap. Hull City Council is 81% reliant on Government funding grants, and when that money is taken away it has a greater impact in Hull than it does in other areas of the country. Some 86% of people in Hull live in a band B or band A property, so a 1% rise in council tax would bring in only £2.90 per person in Hull, compared with £7.08 in the City of London, or £6.33 in the wonderful South Hampshire. For a city such as Hull, with highly significant deprivation, a very low tax base and limited ability to generate its own income, it is essential that the Government’s future financial settlement calculations recognise and make allowances for that. I ask the Minister not for his pity, but to give Hull its fair share of money and the money it needs. I ask him to reverse the cuts.
We heard today that Marks and Spencer is leaving the city of Hull. Our high streets are being decimated, so will the Government take action quickly and do something about business rates as well? To pull the funding from Hull—and from under the feet of the people of Hull—without making proper and necessary investment was always going to be a disaster. The Minister has the opportunity to own the Government’s past mistakes, recognise the failings of his predecessors, and do something about them.
Order. I call the shadow Minister, whom I thank for his generosity with his time.
Thank you, Mr Walker; it is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this absolutely critical debate at such a critical time, as local authorities enter their budget-setting cycle. The council meetings will take place over the coming months, and councils will be forced again, for another year, to make absolutely devastating cuts to their local communities.
That is what this is about. When we talk about council cuts, it does not gain a lot of interest, but when we talk about people and communities, the impact on the future life chances of our young people and the way older people are cared for, it absolutely matters and is crucial to our communities. In truth, the fabric our communities—the very foundation on which the Government are trying to rest future English devolution—is fragile and near breaking point.
There has been passion in the room today: 16 speakers on the Opposition Benches and four speakers on the Government Benches, including the Minister, who will speak shortly. That shows the real interest in the issue. None of us comes to Parliament to make our communities worse off. We have heard the desperate pleas from hon. Members who really care about the impact of the cuts on their communities, not for political advantage or to try to embarrass the Government, but because we live in our communities and see the impact on our neighbourhoods: the lack of funding in our schools, the effect on all those who cannot get the social care that they need, and the young people who have been denied the best possible start in life because children’s centres are taking cuts or being closed entirely.
One of the Minister’s colleagues has said that the way to revive our high streets is to open libraries on them, when hundreds of libraries are closing every year because the money is just not in the system. We need radical change and radical reform, because quite frankly, we have seen tinkering around the edges far too often, and that does not get to the crux of the issue. The crux of the issue is this: council tax and business rates have a role to pay—they are important property taxes—but both have limitations and will be pushed to breaking point if the Government do not do something.
Council tax is a hugely regressive tax. It takes 7% of low-income families’ incomes, compared with just over 1% of higher-income families’ incomes. The more pressure that is applied to council tax, the greater the pressure that is applied to low-income families. Time and again, the Government duck their responsibilities to provide central Government funding to support local communities, and the burden falls on council tax payers. Council tax will again be increased this year to the maximum level of 6%. On top of that, more money is required to go to the police, and in the case of combined authorities or mayors, even more money is applied to that precept as well, because the Government are walking away, saying, “Well, it’s not our problem,” when it is a problem absolutely of the Government’s making. Those are political choices.
It was absolutely right that austerity meant that every Department had to take its fair share of cuts, but the evidence says that local government has lost 800,000 members of its workforce—it is at its lowest level since comparable records began—while the central Government workforce figure is at its highest level since comparable records began. That is not a fair distribution of cuts or austerity. Local government continues to take the pain and the burden.
Many important points have been made today and I would love to go through the list of hon. Members who spoke. One thing that inspires me about Parliament is just how rooted in community our parliamentarians are—particularly Labour parliamentarians. I congratulate my hon. Friends on giving their communities a voice. The Minister, who is respected in local government—I am not trying to make a ding-dong match out of this, some real questions need real answers—has an opportunity to set out his stall, to say what he stands for and what he believes in, and to stand up for the pressures that local governments face. Any Minister at the Ministry of Housing, Communities and Local Government who presided over a local government family that can barely afford to make ends meet would not be fulfilling their responsibilities.
Thank you. I will call Ms Gill to make her final remarks at fifteen seconds past four. I call the Minister.
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this incredibly important debate. The range of topics covered by Members’ speeches illustrates the breadth and importance of what local government does, and I thank all Members for their very valuable contributions. I pay tribute to the work of local government and local councillors up and down the country.
I join the shadow Minister, the hon. Member for Oldham West and Royton (Jim McMahon) in paying tribute to parliamentarians’ faith in their communities and their interaction with local government. I gently chide him and say that not just Labour parliamentarians have pride in their communities; Conservative Members have considerable pride. Conservative councillors up and down the country represent communities with great passion and dedication, as we have seen in every local election in recent times.
My vision is for local government and a set of councils that drive economic growth, help the most vulnerable in our society and build strong communities. If Members allow, I will take those areas in turn, and deal with as many of the points raised as possible. I apologise in advance if I cannot cover every single question, but I will be more than happy to follow up in person or by letter to anyone whose point was not answered.
We heard a lot about cuts and funding. I agree with the hon. Member for Birmingham, Edgbaston that local government has faced a challenging set of circumstances over the past few years. We do not need to replay all the arguments for why, but the task that this Government faced in bringing public finances back under control was considerable. Local government played a very large part in doing that. It has done a commendable job in those circumstances and I pay tribute to the work of local government, parties and councillors of all stripes in delivering high-quality public services in a difficult financial climate.
As we turn to the future, I believe things are looking up. In the settlement just published for local government for the next financial year, core spending power—the overall metric that looks at all the different income streams and grants available to local government—is forecast to increase almost 3% in cash terms. That represents a real-terms increase for local government and the highest year-on-year cash increase in some time. I know that is welcomed as a step in the right direction.
Beyond cash, local governments play a key role, as we heard, in supporting local economic growth. In the long term, that is the only way to ensure the vibrancy of our local communities and to raise the vital funds we need to fund our public services. The hon. Member for Blackley and Broughton (Graham Stringer) said that local government should have the ability to raise its own funds; business rates retention is one such opportunity.
I am delighted that Birmingham in particular is in the fortunate position of keeping 100% of business rates growth that it generates; many local councils up and down the country want that. The hon. Lady asked whether we would and should pilot new forms of business rates retention; I am pleased to say that is exactly what this Government are doing. In the next year, 15 pilot areas covering 122 local authorities will benefit from being a 75% business rate retention area, generating in aggregate for the country £2.5 billion in incremental funds for local councils, to reward their effort to drive growth.
The hon. Member for Stroud (Dr Drew) asked about the future of the system. I am pleased to say that the whole country should enjoy 75% business rates retention for 2021. That system is being designed—not in secret, as seemed to be alleged, but transparently with the sector—through a system design working group. The consultation is out and I urge anyone with an interest to contribute to the design of that new system.
One of the most undeniably crucial roles that local government continues to play is helping the most vulnerable in our society. Local authorities support the elderly, the disabled and our children in need. We owe councils an enormous debt of gratitude for the incredible work they do in this area. We heard many passionate speeches about their role. This Government are backing local authorities to carry out those vital duties. As we heard last year, the Budget provided an additional £2 billion for social care and committed a further £1 billion of extra funding for local services.
The integration between social care and the NHS was raised by the hon. Member for Crewe and Nantwich (Laura Smith) and my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter). They are absolutely right to do that. I am pleased to say that we are taking very positive steps in that direction. The better care fund, which pulls together funds from the NHS, local government and social care, is working. Ninety three per cent. of local areas believe that the better care fund has improved integrated working between the NHS and social care. We are seeing that in the numbers: social care has freed up more than 1,000 beds a day since the February 2017—a 43% reduction in social care-related delayed transfers of care. I hope hon. Members agree that we are making progress in this vital area.
We heard about the changing demographics in places such as Essex from my right hon. Friend the Member for Witham (Priti Patel) and my hon. Friend the Member for Chelmsford (Vicky Ford). It is absolutely right that in the long term, as we look to a new funding mechanism for local government, capturing those kinds of rapidly changing demographics is something we must get right. We heard from many Members about the pressures on social care. I am determined to work with the sector to find a formula that reflects accurately and transparently what local councils face on the ground, so that all local councils of all stripes can ensure they are funded fairly.
On children’s social care, I want particularly to point out the incredible work that Essex has done. My hon. Friend the Member for Chelmsford put it excellently: we should focus on outcomes, not just the amount of money we pour in. Her council is a shining example of one that does that in children’s social care, displaying innovation, as we heard from my right hon. Friend the Member for Witham. I am pleased to have spent time with Essex County Council. Many councils can and do learn a lot from how Essex has brought down the number of children in need, through a focus on early intervention and prevention.
The hon. Members for Birmingham, Edgbaston, for York Central (Rachael Maskell), for Leigh (Jo Platt), for Brighton, Kemptown (Lloyd Russell-Moyle) and others talked about the importance of prevention. I could not agree more with that sentiment. I am a passionate believer that councils can play a valuable role in ensuring that children do not end up in care, and that we can get to problems before they happen. My focus since getting this job has been on the troubled families programme. I am pleased to tell hon. Members that we have been working very hard to robustly understand the value that that programme brings and delivers on the ground in Members’ communities. We will shortly make more announcements about that, and I want to work with all colleagues across the House.
On delayed discharges from care, the Minister is right to say that progress has been made, but the challenge is that many local authorities can no longer co-operate with the NHS in the way they could before, by having embedded social workers in NHS organisations to prevent hospital admissions in the first place. That is a very big challenge, and it is driving up hospital admissions. Although the money may go to the acute sector, it will not prevent people from getting there in the first place. The Minister needs to look at that.
Obviously, I defer to my hon. Friend’s knowledge of the NHS, but I thank him for raising the point and I will make sure we discuss that with colleagues in the Department of Health and Social Care as we design the iterations of the better care fund and related joint working practices.
Prevention is incredibly important. The troubled families programme is back with almost £1 billion of money over this cycle; it works with families facing very difficult circumstances, doing all the work we heard about from hon. Members. I hope they will join me in Parliament to make a strong case for investment in this type of programme for this type of service as we approach the spending review, to demonstrate to everybody what a valuable role those kinds of services and local government can play.
Local authorities build strong communities by being cohesive. They have been backed with a £100 million fund to ease local pressures resulting from migration. They do that by being connected, and they are being backed with a £420 million fund to ensure that the roads that our constituents use will transport them safely and quickly to where they need to go. They also need houses for all their constituents, as we have heard. That is why we have lifted the housing revenue account borrowing cap and are investing almost £1 billion in tackling rough sleeping.
It a pleasure to champion local government here in Westminster. It is a role that I relish, and I look forward to working with all hon. Members as we approach the spending review, to make a compelling case for why local government deserves funding to making such valuable change on the ground, whether that is driving local growth, caring for the most vulnerable in our society or building strong communities. Local authorities up and down the country do an amazing job and they deserve our support.
I thank the Minister for his response and for paying tribute to councils up and down the country. I also thank him for acknowledging the real challenges local government faces. Although I welcome the £1 billion for the troubled families programme, there is still so much more to be done.
I thank my hon. Friend the Member for Oldham West and Royton (Jim McMahon), who reminded us about the people and communities these cuts impact, and I thank all other hon. Members for their contributions. The right hon. Member for Witham (Priti Patel) touched on social care and the funding settlement. My right hon. Friend the Member for Enfield North (Joan Ryan) spoke about knife crime and youth violence in her constituency, and the decimation of neighbourhood policing up and down the country.
I thank the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), my hon. Friend the Member for Warrington South (Faisal Rashid) and the hon. Member for Chelmsford (Vicky Ford), who talked about the outstanding social work practice in Essex despite the pressures on social workers on the frontline. As an ex-social work manager, I know those pressures only too well, but I commend Essex for its work in that respect.
My hon. Friend the Member for Leigh (Jo Platt) co-chairs Labour Friends of Local Government, ensuring that the voice of local government is heard loud and clear in the House. My hon. Friend the Member for Norwich South (Clive Lewis) mentioned the plight of some of his constituents and funding cuts to early years services. My hon. Friend the Member for York Central (Rachael Maskell) made the excellent point that local authorities are the game changers, and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) talked about his council facing bankruptcy within three years, which is shocking.
My hon. Friend the Member for Nottingham South (Lilian Greenwood) made the point that cuts to preventive services mean paying more in the long term. We also heard from the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), who made a passionate speech about fairness. I thank all hon. Members and I thank you, Mr Walker.
Motion lapsed (Standing order No. 10(6)).
Coventry City Football Club
I beg to move,
That this House has considered Coventry City football club and football stadium ownership.
I think this is the first time I have introduced a Westminster Hall debate with you in the Chair, Mr Walker. I may be wrong—if I am, you have my apologies. I thank Mr Speaker for granting the debate, which is very important to the people of Coventry, and to the people of Warwickshire in general. This is the fourth debate in recent years about the future of Coventry City football club. The previous debate took place last February, and the threat to the club’s future has only worsened since. Its immediate future is now at risk, and urgent action must be taken.
I thank the Sky Blue Trust, which has worked tirelessly for the sake of the club and the city, and all the other Coventry City supporters both in the city and outside it. I also thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for the hard work she put in to help our club when she was Sports Minister. I am very sorry that she had to resign because of Brexit, but that is another matter. That is no reflection on the new Minister, who will be judged on her record.
The background to this issue is the club’s 12-year ownership by Sisu, during which time it has faced many difficulties. Under Sisu’s stewardship, the club has fallen from the championship to league two, faced administration and received repeated points deductions. Despite its promotion to league one last season, instability off the pitch overshadows any success. The worst moment in the club’s recent history was its year-long exile in Northampton in 2013-14. Although an agreement was eventually struck by the English Football League, the club’s issues have only deepened since.
Since moving back to the Ricoh arena, the club has become a tenant of Wasps rugby football club. Wasps’ decision to buy the Ricoh arena from Coventry City Council was a success for it, and it has become a welcome and growing part of sporting life in the city. However, relations between Wasps and Coventry City have become increasingly sour. Sisu’s decision to challenge the sale of the Ricoh arena led to years of legal disputes, which culminated in the rejection of its case by the Court of Appeal last October. However, we must now wait to see whether the Supreme Court will hear a fresh appeal.
I thank my hon. Friend for securing a debate about this proud club, which, as he says, is important not just for the people of Coventry but for many people in and around Warwickshire. Although I agree with him and welcome the work of Wasps in the city, does he agree, in looking at all this and at the court case, that there is also a role for the Football League and the Football Association? This is not just about Coventry City, because other clubs face similar situations.
My hon. Friend the Member for Coventry North East (Colleen Fletcher) and I have both written to the Football League to ask for a meeting, and that is pending. Obviously this matter is sub judice, so I do not want to go too far into the court case. Suffice it to say that, in the interest of progress, Sisu perhaps should set aside its application to go to the courts until we have tried to resolve the issue in another way. That would show a lot of good will on both sides.
The hon. Gentleman is right to highlight the role that Sisu has played over the past five years. The hon. Member for Coventry North East (Colleen Fletcher) and I actually voted for the financial restructuring that stopped it bankrupting the company that then operated the stadium. Does the hon. Gentleman agree that the blame for where the club is must fall four-square with Sisu, and that continuing to mess around in the courts is not going to move the club forward in any way, shape or form?
I agree with the hon. Gentleman, who has contributed to our debates on this issue since coming to the House—I might disagree with him on other matters, but I give credit where credit is due. Sisu should sit back and reflect. It certainly has to get away from trying to distance itself from the club and saying that the club is a separate entity. We all know that it is not, and that must be made clear. I am certainly doing so in this debate.
While Sisu has spent huge sums on legal action, the real consequences have been felt by the club. There are huge doubts about Coventry City’s future at the Ricoh arena. Wasps is refusing to keep the tenancy going, while Sisu continues its legal action. Regardless of the validity of Sisu’s claim, it has again left the fans suffering as a result. As I said, the club’s short-term future must be the priority. Coventry City must stay at the Ricoh arena next season. No other option is acceptable. To achieve that, all parties need to get back around the negotiating table.
There are currently too many red lines preventing talks. I understand the concerns of Wasps, but I ask it to reconsider for the sake of the city. For its part, Sisu must consider what it might gain from continued legal action. All fans agree that no judicial win would outweigh the risks the club faces. At some point the legal battle will end, either in the Supreme Court or before that stage, but that could still take many months—time the club simply does not have.
I have long argued that a mediator from outside football should adjudicate the dispute. Mediation has been attempted, with an apparent lack of success, but if the parties will not get back around the table, a mediator must bring them back. I want to talk to the Secretary of State about exactly how we take that forward, but that is another matter. I hope that the Minister will indicate whether the Secretary of State will meet us, along with the other local Members, to discuss the matter.
Too many football clubs have faced similar problems. In the Football League, those include Charlton, Portsmouth, Blackpool, Bolton and many others. In Scotland, of course, the famous Glasgow Rangers suffered a massive fall from grace due to liquidation. All those clubs have faced slightly different issues, but the common factor is poor stewardship by owners. Football club owners own something far more important than just a business. They owe it to the local community to run the club carefully and responsibly.
The fit and proper persons test is failing. It simply allows too many football clubs to fall into the hands of inappropriate people. I back Labour’s pledge to empower fans. A perfect fit and proper persons test is impossible, so we must limit the damage that owners can cause. We could learn from the protection that football stadiums receive through the Localism Act 2011. If grounds can be protected as assets of community value, then clubs should be as well. Owners who mistreat their community clubs cannot be allowed to get away with it. The Government must consider ways to definitely give power back to the fans. Along with other MPs, I will now look to meet the Government and the English Football League as soon as possible. I have already indicated that and the Minister is aware.
Coventry City has enjoyed some notable successes on the pitch in recent seasons. However, with huge questions over the future of the club, the city has been left in the lurch. It is a terrible irony that this is happening in the year in which Coventry is the European City of Sport. A continuation of the tenancy at the Ricoh must now be agreed immediately. Discussions over the club’s long-term ownership are needed, but the focus at the moment must be on the club’s survival.
There is a strong sense of déjà vu surrounding these proceedings. Around this time last year we stood in this Chamber and debated exactly the same subject: Coventry City football club’s long-term future in its home city. At that time, the club’s deal to play its home games at the Ricoh arena had been due to expire at the end of the 2017-18 season. Negotiations to extend the deal had long since stalled, due to Sisu’s “batter them in the courts” approach, but ultimately an agreement to extend the deal until May 2019 was reached between the club, its owners and the landlords, Wasps.
That extension ensured that the club remained in its home city for another season. However, as I warned during last year’s debate, the club was still likely to face the prospect of homelessness after May 2019, unless Sisu changed the way it did business. Wasps issued a similar warning to Sisu, stating that its pursuit of protracted litigation was a barrier to extending the deal further. With those warnings ringing in its ears, Sisu should have used the next 12 months to rebuild relationships, demonstrate a clear commitment to the club and its supporters, and overcome the barriers that could prevent the team playing at the Ricoh during the 2019-20 season and beyond. Instead, its actions over that period were just as divisive and toxic as they had been throughout the rest of its time in charge of the club. For Sisu, it was business as usual.
Consequently, here we are again, a year on, and the club is once more on the countdown to homelessness. That has left many fans again fearful that the club may leave Coventry or, worse still, cease to exist. Both scenarios would be disastrous for our city and for the club’s loyal supporters; neither must be allowed to happen under any circumstances. Time and again, Sisu’s actions have called into question its suitability, capability and fitness to own and run a football club. It has repeatedly acted contrary to the best interests of the club and has shown, at best, indifference and, at worst, distain for the loyal fans, the wider local community and the city of Coventry as a whole.
Our football club has a proud history and fantastic supporters, and we deserve—no, we demand—better. We want long-term stability, a permanent home in Coventry and owners we can trust. Sisu seems incapable of delivering this, and on that basis it should sell up and go. In the meantime, I would encourage all parties to get around the negotiating table and thrash out a deal that will see Coventry City football club playing in Coventry next season. Achieving such a deal is in everyone’s best interests.
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing the debate. It is disappointing, to say the least, that we are here yet again. I say that because thousands and thousands of loyal fans, including myself, are now starting to think the unthinkable, which is that in just a few months, at the end of this season, a football club with 136 years of proud history could cease to exist, if it cannot extend its deal with Wasps at the Ricoh arena.
There are alternatives, but that would require the English Football League. I do not advocate the alternatives. Coventry City should be playing in Coventry. I certainly do not support the rumours I have heard that Coventry City might try to play at the Nuneaton Borough ground. Nuneaton is clearly not Coventry. Coventry City is a big club and Nuneaton does not have the infrastructure to support it, in terms of the roads or the policing, because Warwickshire Police is not set up to deal with such large crowds. We are not set up for it.
I will ask a few simple questions today. The Minister will be able to respond to some of them and other organisations can answer the others. We need clarity on what the English Football League is willing or unwilling to accept, and what pressure it can put on Coventry City. We need the owners to look at their moral obligations to a city, a community and fans who have supported this proud club, with its 136 year history, for decades; they have not done that, as Members have said. We also need to ask questions of Wasps. I do not blame Wasps for its view—I would possibly take the same view myself—but we need to ask if it is willing to allow what has been the biggest sporting club in Coventry to be in a situation where it might cease to exist.
We need to look at the roles of my right hon. and learned Friend the Secretary of State for Digital, Culture, Media and Sport and my hon. Friend the Minister. We need to be realistic, because they, like organisations such as the Football League, do not have any direct levers in the dispute, but they can play a valuable part in bringing all parties together around a table, to discuss what can be brokered between them. I do not think it will be a utopian situation, where my right hon. and learned Friend will be able to direct anybody, but I think it will focus minds. It will be an opportunity for us, as Members of Parliament representing Coventry and Warwickshire, and for my right hon. and learned Friend, as the Secretary of State responsible for sport in this country, to make it clear to these organisations that Coventry City must stay in Coventry and must stay playing at the Ricoh arena.
I am grateful to the hon. Member for Coventry South (Mr Cunningham) for securing the debate and for the important, insightful and passionate contributions from Members from Coventry and Warwickshire. I commend the hon. Member for Coventry North East (Colleen Fletcher) for her passionate speech, in which she implored that communication and negotiation on behalf of the fans should be at the heart of the discussion. I am afraid that we are in an ongoing Catch-22 situation and time is running out. It seems to be appropriate on this Brexit negotiation day that nothing seems to be changing and there is something of an impasse.
It is hugely satisfying to hear why football clubs up and down the country rightly mean so much to local communities. I could not agree more with the impassioned pleas about the care that should be taken with our local football clubs by stakeholders and owners, and that that should be focused on their long-term futures. Football clubs do not belong to anybody. They are not pawns to be used in property disputes, across the boardroom table or in legal disputes. Football clubs should be fuelled and supported by their local communities, achieving a special place in towns and cities. Their existence and continual purpose is to bring fans together to support the game that they love, which is vital in good and bad times.
I am afraid that in this situation, we are in a bad time. The sorry saga of Coventry City and the Ricoh arena is familiar to us all, but it remains disappointing that, just as my predecessors have done, I find myself debating this very subject as we see the clock running down. We must look at who is responsible for the club and has the best interests of the community and fans at heart. I am afraid it feels as if nobody can currently put that to the fore.
The hon. Member for Warwick and Leamington (Matt Western), who is no longer in his place, rightly asked about football authorities and the need to look at the broader issue of leadership and the protection of clubs. We await a review finding, but it is fundamentally right that the FA look at this. It is vital that we provide clarity for fans and local communities. The processes must be in place to protect our local clubs and see them as community assets and, as I said, not pawns in a broader scheme.
I am not taking sides in any dispute, but it is a monumental shame that we continue to find ourselves in this situation, especially with a club of this size that means so much across Warwickshire and the city of Coventry. We heard from my hon. Friend the Member for Nuneaton (Mr Jones) about the proud history of the club, so it is right that we focus on the fact that in nine months’ time an important football club could be homeless and sadly might end up out of the league altogether. That is the reality of the situation.
In terms of immediate action for Coventry City, I will work with the Secretary of State to convene an urgent meeting with the various parties to see if a solution can be found to ensure that the club has a stadium to call home for next season. That is an imperative for loyal fans, who want answers. As my hon. Friend said, I can give no guarantees, but I hope that that meeting can bring about a meeting of minds, press together those interested parties beyond the courtroom, and emphasise the importance that Coventry as a whole places on its football club. No club should be forced to leave its historical home and local fan base. We have seen that in the past in football, and it is wrong that that might be the case.
We heard from my hon. Friend the Member for Torbay (Kevin Foster), who has a history of fighting for the city of Coventry in his previous incumbency, that we need to stand ready to act as the clock ticks down. I will try not to do any more Brexit notes here, but the long-term plans must be put to the fore. I would be delighted for all hon. Members in this room to come and meet me to ensure that the football club, its future and what should be happening are put forward.
There must be a demonstration that people are ready to set aside their differences and act to ensure that the ongoing legal arguments can be pushed away, so that the football club can get a clear direction for what will happen in the future. I reiterate that it is not the Government’s direct responsibility to be the custodians of one particular football club, but it is our responsibility to hold to account those club owners who sign up to be custodians of a club but do not show that to be in their hearts.
It is right that we work with the FA and local community; while there has been no better time to be involved in football club ownership, we must do it right. The administration of the game and what is around it matter. As broadcasters continue to be interested in our wonderful game, there are side issues that we must look at. Attendances throughout the English game are at their highest, but people must not go on losing their local connections. Those revenues are vital and we must keep the link between fans and revenues.
I welcome the fact that the Minister and the Secretary of State are going to get together not only the MPs, but all interested parties. We would not expect the Secretary of State, or the Minister for that matter, to resolve this, but they can act as a catalyst to remind the parties of their responsibilities to the broader community in Coventry as well as to the fans.
I absolutely agree; it is a chance to remind the parties of the broader responsibilities that our owners have in football, and to hold them to account. It is also a broader lesson for football as a whole. As we heard from my hon. Friend the Member for Nuneaton, there are particular questions from across the realm here, but it is valuable to have a meeting of minds and show that, as I say, football clubs are not pawns to be bought and used while neglecting local links and forgetting where the fan base, the revenue and the local pride and heart come from.
My Department has a responsibility, which the Secretary of State in particular sees absolutely clearly, to ensure the sustainability of our clubs. We must ensure that our club owners who come in bring the positives and leave the clubs in a better state than they found them, rather than decimating them and disconnecting them from local communities. As I have already said, responsibility also lies with the football authorities. They govern the sport and set the rules and regulations that club owners should comply with. It is vital that those who are fans of their local club feel that that process is in place and that people cannot ride roughshod over it.
Our football authorities simply must look again at ways to protect their clubs in the long term. It is vital to ensure that owners go beyond merely abiding by the rules and that there are long-term business plans and proper assurances about the protection of the club and, for this football club in particular, a permanent home where it plays its matches. We must provide clarity to the fans and ensure that lessons are learned from the situation we are in. If football’s current rules are not good enough, new rules may need to be brought in. If that is not sufficient, we need to look at the case for Government to help football and remind it of this situation. I stand ready to act.
I will meet the Football Association next week to discuss the many challenges in football at present, and I will continue to work closely with it and the professional leagues to drive through changes that are needed in the sport. I will remind them of the crucial responsibility they have to supporters, to the fortunes of football and to their clubs. It is imperative that those clubs continue to engage openly with and listen to their fans on all the important issues. Without question, in Coventry City’s case, that should include prioritising an open dialogue and making plans for its future home stadium.
To sum up, it is my belief that the Government should not involve themselves directly in the fortunes of any individual club, but more and more we are being dragged into these types of disputes. This cannot become the norm. It suggests that perhaps football is not able to govern itself—something we need to be ready to tackle. I believe in this case we can take steps to disprove that suggestion, but we are on a precipice in terms of timescales. The Government are prepared to champion the game, but the authorities that govern it must ensure that we all get the outcomes that fans, above all, want and expect. In the case of Coventry, I remain hopeful that interventions locally by Members of Parliament and the Government, with local assistance, can help to find a suitable future for the club. It rests in the hands of the club and the stadium owner, but if I, this Department or the Secretary of State can help them to realise that sooner, all the better. We stand ready.
Question put and agreed to.
Long-term Capital for Business
I beg to move,
That this House has considered provision of long-term capital for business.
It is a pleasure to serve under your chairmanship, Mr Walker, and it is truly a privilege once again to lead a debate in Westminster Hall. Long-term capital for business is critical to the future of our economic wellbeing. Business knows business best, and in many ways the industry panel patient capital review was the genesis of the debate. That review, published in October 2017, was written by experienced and successful business leaders, and I commend it to hon. Members.
I recognise that the debate is somewhat overshadowed by what is happening in the main Chamber and what will transpire later this evening. That said, I cannot think of a better time to hold a debate on this subject. These are critical days for the future of our country, and we will be making critical decisions. It is incumbent on us to put the long-term interests of our country at the heart of the decisions we make. Our country, its people and those who come after us will not thank us if we make decisions based solely on narrow, short-term or selfish interests.
What is true for our country in our current predicament is also true when it pertains to the fortunes of business. Although there are undoubtedly risks in making strategic decisions for the long term, there are greater perils in considering the tactical only here and now, in looking for immediate returns and being unprepared to consider the bigger picture in a way that a long-term view necessitates. I am afraid that one life lesson that we must sadly keep learning is connected to what is often described as the law of the harvest: we can reap only what we are prepared to sow in the first place. The harvest comes in due season, but we must be prepared to be patient. I want us to reflect on the pitfalls of short-termism, and the missed opportunities and failures of a lack of a long-term vision.
As every colleague who ever worked with me in my previous business career would attest to, I am no accountant. However, it is insightful that, in accountancy terminology, a long-term investment is defined as an investment that is to be held for more than a single year, which hardly seems long term to me.
We have quite rightly heard a great deal about the UK productivity gap. Productivity is defined by the Office for National Statistics as the output per worker, output per job and output per hour, and it is ordinarily calculated by dividing the annualised GDP per capita by the average annual hours worked per employee. Countries with a track record of rising productivity tend to benefit from higher rates of growth and low inflation. It is the golden fleece of national economics, if I may describe it as such.
Productivity in the UK over the past few years has not been our best feature, and we rank poorly compared with other developed economies. We are currently at No. 17 in the world rankings, with our average hourly productivity across the economy being £17.37, compared with the Germans, who produce £23.30 per hour, the Americans, who produce £25.74 per hour, and the Danes, who produce £28.87 per hour.
Imagine for a moment that we were as productive as the most productive of the developed economies. It would transform our fortunes. We could pay ourselves more, and as a result of paying more in taxation we could invest many billions more in our NHS and other public services. The increased profitability in the private sector would also yield increased dividends, which in turn would be good news for our pension funds.
Has my hon. Friend looked at how many countries have a means of producing long-term capital, and at what sort of competitive advantage our having one would give us as a result?
I am grateful to my hon. Friend for that timely intervention. That is the very point I will come on to. Let us examine the critical reason for our lack of national productivity, again comparing investment in our economy with that of the world’s leading economies. A good indicator is the level of gross fixed capital formation as percentage of GDP, which is the value of the acquisitions of new or existing fixed assets in the economy less the disposal of fixed assets. It is just a single measure.
In 2017—the most up-to-date World Bank figures are for 2017—we invested 16.8p for every £1 of GDP. The Chinese invested 41.8p for every £1 of their wealth. We also lag significantly behind developed western economies. For every £1 of GDP, Italy invests 17.5p, Poland 18p, Germany 20.3p, Denmark 20.4p, Spain 20.5p, France 22.5p, Finland 22.6p, Canada 23p, and Belgium 23.3p. That is but one measurement of investment, but it says something about future business activity and also about our confidence in the future. It is my firm belief that much of our productivity gap in this country is due to that indicative investment gap. We are simply not investing enough, and I contend that that is because there is an insufficiency of quality patient capital in our economy.
It is a much-worn anecdote that, while we come up with great ideas, breakthrough technologies and transformative product concepts, all of that good stuff ends up being commercialised somewhere else by someone else. As a young Scot, my pride in being a Scot was spurred by the great stories of our inventors, scientists and engineers. I believe it is a valid contention—one I am prepared to stand by—that the modern world was largely designed by the Scots. The litany of great Scottish contributors include James Watt, Alexander Graham Bell, John Logie Baird, James Chalmers and John Dunlop. I am delighted to give way at this point to the hon. Member for Strangford (Jim Shannon).
The world may have been designed by the Scots, but it was built by the Irish, especially the Ulstermen.
A timely intervention, as ever, from the hon. Gentleman. These British Isles are a crucible for invention. The genius of the people of these islands, their creative free thinking and their imagining of the unimaginable has created whole new branches of sciences and technology and whole new categories of product. That native, creative, entrepreneurial spirit is alive and kicking.
Entrepreneurs are among us in abundance. The number of start-ups in this country is at an all-time high. Entrepreneurs are launching themselves and their ideas on to the high seas of enterprise in greater numbers than at any time in our past. Our universities and other research institutes are brimming with exceptional people having very bright ideas. Some of those ideas, if carefully nurtured through the commercialisation process, will not only continue to change the modern world for the better but will be the source of the wealth of this nation for generations to come. However, they must be nurtured, and that nurturing relies, in substantial part, on the availability of long-term patient capital.
All too often at present these small to medium-sized businesses fall prey to predators, who invest in them for the short term and then sell on without having made the necessary long-term commitment to bring the businesses to their full potential. I am not arguing against the importance of short-term investment or venture capitalism, but I argue that it is wrong to surrender our whole economy to that model of capital. Some 650,000 new companies were formed in Britain last year, but the number that scale up is relatively small. Some of those are lifestyle businesses that suit the people running them, but many business owners are driven by a sense of purpose—to build a growing, successful business—and they very often come up against the obstacle of the limited availability of patient capital.
My hon. Friend is being very generous with his time. He may be about to come on to the digital industry. It is a major industry and such a fundamental part of our economy, and it needs investment, as I know from my own costs when I ran a company involved in that area.
Anyone would think that my hon. Friend and I were working in some form of symbiosis, because the very next thing I wanted to say was that the need for investment is never more pertinent than in the technology sector, in which large American corporations invest speculatively and then buy companies when they reach a sufficient level of development. One reason that so many British businesses go that way is that they reach a stage where their access to affordable long-term capital dries up. This is not just about start-ups but about how a business accesses capital to be able to invest in new assets or capabilities.
My hon. Friend makes a valid point about access to capital for companies going into their mid-stage development. He makes the point about size, but is it not also about geography? Many companies that are further away from the capital bases in London and Edinburgh, especially across Scotland and in northern England, do not get that same access to capital. It is incumbent on us to make sure that our companies can be connected with capital, so that they can grow in the way we should all want them to.
I am grateful to my hon. Friend and constituency neighbour for that very valuable intervention. I will return to that idea shortly.
As I said, this is not just about start-ups; it is about how businesses access capital to be able to invest in new assets or capabilities. There is an abundance of evidence to suggest that our capital investment system is addicted to short-termism and is risk-averse. Risk is built into the capitalist system. Investment, by definition, includes a calculation of exposure to risk. The more risk-averse we become, the less inclined we are to invest in new ideas or ventures, because they might fail; the returns might not materialise. It is implicit in—I would argue essential to—the free enterprise economic system that there is acceptance of the inherent risk of failure. However, anecdotally, we have become less willing to accept that risk.
The banks obviously were badly burnt because of their recklessness in respect of risk. They then set about recapitalising their businesses, at the expense of small and medium-sized businesses. That led to some of the gross abuses and alleged criminality that is still the subject of ongoing inquiry. That is an outstanding injustice; it has still to be remedied. I do not want to spend too long on the past misdemeanours of the banks—we have had many debates on that subject in Westminster Hall and the main Chamber, and I am sure that we will have plenty more—but restoring confidence to the small and medium-sized businesses of this country necessitates that something be done about the scandals of the past decade. Banks will not take a long-term view, and if we entrust our productivity to them we will have no long-term economic future.
That said, I certainly do not want to be guilty of using this debate as a platform to spread doom and gloom—that is not in my nature—because there are very many good examples of private sector long-term investment. CityFibre is a good example. It is investing £10 million in Stirling. That will make fibre-to-the-premises ultrafast broadband available to every household and business in the city. Stirling will soon become one of the top digital cities in the United Kingdom—something that I am proud of. When we look at the bigger picture, we see that CityFibre is investing £2.5 billion across the UK. The investment will take many years to recoup, but the investors have faith in the product and are willing to be patient while the company makes the money back. Their planning horizon is measured in decades. Now, that is something akin to my definition of long-term investment.
Around the world, many countries, although they do not have this particular set of problems and although they have not cracked things entirely, have a different system of capital deployment. I would like to pause on the German example—I have used this before in Westminster Hall. I have already explained the successful indicators of productivity and capital investment in the German economy. KfW is the German national development bank. It came about as a result of the Marshall plan; it was set up for the purposes of post-war reconstruction. It supports infrastructure investment, lending some €47 billion, it acts as a lender to local authorities and, most importantly, it supports small and medium-sized enterprises. In 2017 it lent some €8.2 billion to small and medium-sized enterprises for start-ups and scale-ups. It lends money, provides equity funding and provides mezzanine financing to cover all aspects of capital investment. Some 90% of the bank’s funding is from the private sector, in the form of debt that is backed by bonds. It is owned in partnership between the federal Government and the individual states. It does not appear on the national balance sheet of the Federal Republic of Germany.
As the United Kingdom leaves the European Union, we will no longer have access to the European Investment Bank. That bank invested more than £2.5 billion in the UK in 2018. That was our money that was invested—it was gleaned from borrowing on the back of the British taxpayer—but we will need to find a way to replace that level of financing, because there will be a hole in the capital provision landscape. We need to look at the investment bank model in detail. It would fulfil the need for a patient capital investment vehicle, as outlined in the industry panel review. The case for a major intervention in this way is, in my opinion, justified. The lagging productivity in our economy is a major risk to our economic prosperity, and we need action now. This cannot wait any longer. It especially cannot wait until after we have resolved the issue of Brexit. Our thinking in this area is a vital part of our preparations for our economic wellbeing after we have left the European Union.
We have the British Business Bank, which has some of the functionality of a national investment bank, so there is tacit acceptance by Government of the problem that I have been attempting to describe. The big issue with the British Business Bank, as I understand it, is that it does not seem to have equal coverage across all parts of the United Kingdom.
As my hon. Friend is talking about the British Business Bank, will he join me in welcoming the expansion of the bank announced in the Budget, which places people on the ground in Scotland? He and I have been asking for that since we came to this place.
Yes. I am grateful for that very important point of information. It is important that the British Business Bank has representation in all parts of the United Kingdom, but currently it is still limited in its mission because of its limited scope of operation and it does not really behave like a bank, even though that word is in the title. Its model of supplying finance via existing investment funds means that its base of operations is quite limited and seems to favour, if you will forgive me, Mr Walker, the south-east. I am happy to be corrected, but the British Business Bank does not seem to have the kind of extensive operation on the ground that it needs in Scotland, even with the announcement in the Budget.
I would like to see the British Business Bank operating across the breadth of the United Kingdom, interacting with the economy on the basis of a clearly defined mission, including small and medium-sized businesses, operating at arm’s length from the UK Government, and raising its own capital rather than simply being a channel through which public funds are disbursed.
I am not being critical of the British Business Bank as it stands, because I am a fan, but I am advocating that it evolve into something more. That something more is what the industry panel patient capital review advocated—namely, an investment vehicle to support the scaling up of British businesses and capital-intensive start-ups. By investing in equity directly through such a vehicle, we can harness the wealth of our nation to deliver on the promise of the industrial strategy and to make our economy fit for the future.
The UK economy is dominated by the service sector, and there is nothing amiss about services, but we need to rebalance our economy and we need the availability of long-term capital in order to become the best country in the world in which to build a business. In the post-war era, too few British businesses have grown to become multibillion-pound global corporations.
There is more that we can do. We should look at other ways of releasing under-productive cash for equity funding. We need to take a healthier approach to our risk appetite as a country. Changing the culture is essential. We need to harness our savings and pensions. With some innovative mechanisms, we can unlock that money and put it to use in our economy. Using the tax system and the savings guarantee system in innovative ways, we could revolutionise the way companies get finance and the ultimate source of that finance. Helping people to acquire equity stakes through shareholder co-operatives, saving schemes and direct micro investment could all work towards a new culture of investment.
To that end, we need the Treasury to be as innovative as the entrepreneurs who fuel our economy. We need to see ideas being tried and tested and the apparatus of Government swinging behind the idea of long-term investment and rewarding those who make such investments. A starting point would be to increase the thresholds for the tax on dividends and seek to band it to allow smaller-scale investors to pay no tax whatsoever on dividends, especially if they can be incentivised to maintain their investment over a longer period.
The industry panel review on patient capital made a number of recommendations that need to be addressed. It identified the need to provide patient capital to help entrepreneurs to be successful; I have already mentioned its idea for a patient capital investment vehicle. It also proposes a licensed scheme to allow patient capital investment companies to be founded that would be venture capital funds licensed to raise money from the markets, guaranteed by Government. Although I agree with that recommendation, it needs to be a truly national venture, with specific guidance about the development of capital funds outside London and the south-east.
The review also proposes a change in the way taxation hits investors when they seek to invest in developing a company past its start-up phase. Ensuring that tax incentives for equity and venture capital funding are there when companies are seeking capital to expand, rather than simply during the start-up phase, will allow investment to flow more freely into medium-size companies.
I have a few straightforward asks of the Government. First, I would like to see a formal response to the industry panel review, alongside an action plan for the implementation of its recommendations. If I have missed it, I am happy to be corrected. Secondly, we need a full analysis of the possibility of a national investment bank or development bank, as I outlined earlier. Thirdly, we need a statement about the replacement vehicle for the investments made by the European investment bank, which we will no longer have access to.
Finally, I would like some reassurance from the Minister that the Treasury is ready to innovate to improve the availability and quality of long-term capital. We need to encourage a positive investment culture and we need a creative response from the Treasury to unlock and harness the wealth of this nation in the delivery of a modern industrial economy that is fit for the future.
My hope, in bringing this debate to Westminster Hall, was to focus the House on the substance of how we can improve the environment for entrepreneurial success and wealth creation. It is perfectly understandable that we have become distracted by the politics of Brexit. One day soon, I hope and pray, we will turn the page on Brexit, and this House will fully turn its attention to the vitally important agenda of ensuring the long-term productivity of our economy. It is timely, because it is about our future.
We have 18 minutes before the wind-ups. I call Jim Shannon. Jim, please do not be more than six minutes.
Thank you, Mr Walker, for calling me. I congratulate the hon. Member for Stirling (Stephen Kerr) on securing the debate. In the short time in which he has been a Member of Parliament, he has made a name for himself on the issues that he brings to this Chamber. Well done to him. It is also good to see him back to health after the illness he had just before Christmas.
This issue is very important to me. The banking and financial conduct industry is increasingly interesting to me. Many of the debates today reflect that. What began with constituents highlighting cases that concern the individual have, after many hours, left me increasingly concerned about the entire sector. I believe it is entirely right and proper that we bring this to the Minister’s attention, so that he can act. I look forward to the Minister’s response at the end of the debate.
I read the “Patient Capital Review: Industry Response”. I completely agree that there is an urgent need for a mechanism to realise three aims: first, unlocking institutional and retail investors’ capital; secondly, increasing the number of venture capital funds that can deploy patient capital at scale; and, thirdly, increasing returns to scale up investments.
I wholeheartedly agree that the United Kingdom is, in many respects, a great place to start and grow a business. In recent years, successful Government policy interventions such as the enterprise investment scheme and the venture capital trusts have helped to develop a thriving start-up community. Northern Ireland has become the world capital for cyber-security, due to investment in skill provision and adjustments for businesses to invest in the Province. We welcome that, and we are pleased and proud to say that.
Only in December, US cyber-security firm Imperva announced that it would create 220 jobs within its new Belfast base—job improvements and opportunities are coming all the time—which is expected to bring the total number of cyber-security jobs to over 1,500 for the first time. That is a 15-fold increase in the past 10 years, so it is really good news, which I am pleased to report to the House.
That investment is due to the concerted effort to find space in the market and to provide all that is needed. We have businesses that seek to make the most of that, but are prevented from doing so by the lack of affordable capital investment. I believe Government must invest in the long game and make provision. We all know the phrase, “speculate to accumulate”—how real and true that is.
Mr Walker, I am no man’s fool, as you and other hon. Members know. I well understand that funding capital should ideally come through the private sector, but to build in a post-Brexit age, it is imperative that we put our money where our mouths are and invest in ourselves, in order to establish and encourage international confidence in the United Kingdom outside Europe.
I support the panel’s suggestions for addressing those issues, such as the creation of the patient capital investment vehicle, to enable the aggregation and deployment of both retail and institutional capital for investment in UK scale-up businesses and capital-intensive research and development-based businesses. We have to invest, so that those sectors do better. The vehicle would invest £1 billion annually, primarily in UK venture capital funds and other investors in high-growth businesses, and catalyse an additional £2 billion of private investment by providing up to only 30% of the equity capital. Perhaps that is a bit tactical. None the less, it explains how the system works.
The vehicle would be a new entity, independent of the UK Government, but with a Government-defined mandate, including some Government investment to signal strategic intent to build this. I ask the Minister, what are the Government’s intentions on that? If they can help—I think if they can, they will—it will be a step in the right direction. We will all benefit across the United Kingdom of Great Britain and Northern Ireland. In order to attract institutional capital, investments in the PCIV might receive favourable capital treatment, similar to the Prudential Regulation Authority’s treatment of bank investments in the Business Growth Fund—the BGF. The phrase “go big or go home” seems to be in operation here, but the gains are as necessary as oxygen. The message is clear: this nation believes in its worth and ability, and this nation backs itself as a global leader.
I use the phrase again: we must speculate to accumulate. Businesses are ready and waiting. We have proved in Belfast and Northern Ireland that if we plan ahead and fill the skills pool, investment, jobs and a boost to the economy will most certainly follow. I believe in this wonderful United Kingdom of Great Britain and Northern Ireland. We are better together. That is a fact. I ask the Minister, do the Government believe that, too? If they do, show it and sow it, so we can all reap the harvest.
I am going to call Luke Graham, who will speak for five and a half minutes, because he is a really good guy.
It is a pleasure to serve under your chairmanship, Mr Walker. I will try to be even briefer than that, if possible. I want to make some quick points on, first, the regional nature and importance of capital spreading out around the United Kingdom, and, secondly, innovation. Finally, I will ask the Minister always to think about the British interest and not to let devolution become a barrier to investment across the United Kingdom.
My hon. Friend the Member for Stirling (Stephen Kerr) made some fantastic points about the importance of long-term patient capital across the United Kingdom. We always talk about the regions of England and Scotland as a whole, but it is the regions of Scotland, and beyond that, the counties and towns in Scotland, that we should consider.
My constituency is particularly rural, and my county of Clackmannanshire is post-industrial. We have been starved of investment for a very long time. It is important that both public and private investment is connected, and funnelled here as easily and simply as it is to many of the incubators in London, and around the universities of Edinburgh, Oxford and Cambridge. There are some great models out there—we just need to expand them to other parts of our countries.
Innovation is really important. We have a fantastic opportunity ahead of us to capitalise on the financial centres we have in Edinburgh, Belfast and London, and to look at innovative solutions, not only in company models or ways and types of financing, but in the infrastructure that can be used across the country. I have written about reintroducing regional stock exchanges as a way to try to raise more local capital. That was used a lot in the 19th century to help pay for some of the railways that now connect our country and it could be used again to help fund infrastructure, from broadband to additional road infrastructure and company infrastructure. Especially when trying to encourage more rural investment, it could help some of the communities raise funds locally as well.
It is important that the Government play a full part in creating a real ecosystem. They are not there to make every decision. It is not for our constituents and companies to live on the Government’s shilling. The Government should put their money into infrastructure, to ensure that they are developing the framework that enables private enterprise to flourish, and ensuring that any public investment is there to stimulate research and innovation, and to back the entrepreneurs who do so much for our country and individual communities. As I say, the Government can be more innovative. Brexit need not apply. They can look at things such as regional stock exchanges, rural enterprise zones and expanding the powers of the British Business Bank, as my hon. Friend said, to make it a true investment bank.
To reiterate my point and the frustration that I have felt since I have been in this place, sometimes—I know it does not come from my hon. Friend the Minister—it appears that the Treasury is not so much a British Treasury but an English Treasury, which becomes incredibly frustrating for people trying to fight for projects in Scottish constituencies. That holds for hon. Members in other parts of England and in Wales too, although Northern Irish Members seem to make quite a good job of it. I encourage the Minister to remember that we are still one country and that we need British investment decisions from British Ministers.
Even where areas are devolved, there is no law—we have checked in the Library—to stop Westminster investing in devolved areas. That artificial barrier has been set up through a cultural shift in the civil service, and it has not been helped by the current Administration in Edinburgh, but it does not need to be there.
In future, we as British parliamentarians should not see devolution as a barrier, but should work across every level of Government to make sure that investment comes from the centre and reaches our frontline communities, so when we increase the block grant to Scotland, as the Minister has, that money will go to our local council services, which it does not at the moment. That will also make sure that when we as individual MPs lobby for projects in our constituencies, the money will come to our constituencies directly from Westminster.
Infrastructure needs more, and our governmental frameworks need more. The Government have it within their power to create an ecosystem that takes all the innovation and energy of the United Kingdom and really increases the prosperity of all our constituents. I hope the Minister will outline some of his vision for that today.
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Stirling (Stephen Kerr) on securing this important debate. I was not aware that he was unwell over Christmas, but I am delighted to see him in the pink of health.
It is a rare treat to be in a debate with two Tories and a Democratic Unionist party Member where I have to pick my differences in their speeches; they made many points that I agree with. In particular, the hon. Member for Stirling discussed productivity. It has long been an issue that I have talked about. It has been holding back business and people for far too long, and I agree with his sentiment. As a result of paying more in taxation, we can invest more in our services—that is the consequence of getting that kind of result in productivity.
I also agree about the lack of focus across the nations of the UK. It does feel like an English Treasury; we make that point regularly. It is also a fact that the south-east gains far more traction than any other part of the UK, including the regions of England, Northern Ireland and Wales. There was a lot to agree with in that regard as well.
It is particularly poignant to have this debate today, as the biggest threat to business access to finance comes from Brexit. Government Members, particularly those in favour of Brexit, would like that to be ignored in this debate, but I do not think it can be. Brexit is already reducing the number of customers, the size of workforces, and the level of confidence. Instead of building our economy, investors are voting with their wallets by pulling nearly £20.6 billion from UK equity funds since the vote in 2016, according to EPFR.
The hon. Gentleman makes a point about Brexit being a threat. Does he agree with a developer in Alloa in my constituency that the biggest threat to raising finances is not Brexit but the threat of a second independence referendum?
It will come as no surprise to the hon. Gentleman that I do not agree with that. He has gone from making a sterling point about the English Treasury to saying that independence is somehow a threat. I do not think so; I think it is a marvellous opportunity. As he has raised the issue, I will say that it has been brought into sharp focus in this place over recent months.
As Marian Bell of Alpha Economics pointed out, businesses that were told to prepare for a no-deal Brexit have relocated their operations and those decisions may not be reversed, even in the event of the best possible economic outcome—even if that is remaining in the EU. As Brexit inches closer, the UK services sector has recorded the slowest sales growth in two years, according to the British Chambers of Commerce, whose survey of 6,000 British firms shows that labour shortages and price pressures persist.
Scotland is a world leader in patient long-term capital, but Brexit risks lenders following the example of a well-known hon. Member, the hon. Member for North East Somerset (Mr Rees-Mogg), in moving business to Dublin or the continent. We are being Mogged over Brexit.
In the face of austerity, we have to make different decisions to support business. The Scottish Government are introducing the Scottish national investment bank, which will provide patient long-term capital to support Scotland’s firms. In contrast, as we have heard, the UK Green Investment Bank, which was privatised by the Government, is now bereft of its UK focus.
The aim is for the Scottish national investment bank to invest in businesses and communities by 2020, subject to regulatory approval. It is backed by our commitment of at least £2 billion of investment in the first 10 years, which paves the way for a step change in innovative and inclusive growth.
We also welcome the plan for a Scottish stock exchange in the second quarter of 2019, with a focus firmly on social and environmental companies that are worth between £50 million and £100 million. The plan has now secured a partnership agreement with the major European stock market operator Euronext, meaning that the first Scottish stock exchange will operate since the closure of the trading floor in Glasgow in 1973.
That is all being done in the shadow of Brexit, which was a vehicle aroused solely to calm Tory infighting. As chaos reigns on the Conservative Benches, there is as much chance of success for business as for the economy of our people, who will ultimately pay the price in the long term.
I call Marion Fellows to speak for the Scottish National party for up to five minutes.
It is a pleasure to serve under your chairmanship yet again, Mr Walker. I congratulate the hon. Member for Stirling (Stephen Kerr) on securing this important, and sometimes quite consensual, debate. The hon. Gentleman spoke fully and passionately, and with a great deal of knowledge and expertise, about how we can best provide businesses across the UK with ongoing patient long-term funding. When I learned accountancy, however, long-term funding was generally for between seven and 10 years, and even longer, rather than just over a year—that is a blast from the past; it is many years since I did accountancy.
I was interested to hear the hon. Gentleman talk about productivity and refer to Denmark, which is a small, independent nation leading the charge on productivity. Long may Scotland follow. He also talked briefly about the reasons for national productivity being linked to levels of investment and how, especially in Scotland, companies have been innovative but they start to slow down and fail because they cannot get the correct long-term investment. That is a real ongoing issue.
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) talked about the Scottish national investment bank, which we hope to see become fully functional in the early 2020s. That will be a huge boost to small industries in Scotland.
The hon. Member for Stirling also talked about the lack of money that will now come from Europe, and he looked quite favourably on small German companies. For many years, this country has looked enviously at Germany and we need to take on board what it does to help businesses. He also called for tax incentives and talked about needing a full analysis of a national development bank to look at what it could do post Brexit.
The hon. Member for Strangford (Jim Shannon) gave us his usual full and frank views on where things are going in Northern Ireland. He talked about the cyber-security industry and how it is helping, and how the United Kingdom, of which he is a great proponent, should invest in itself post Brexit. He wants the Government to help with that. In fact, I think the Minister has a lot of explaining to do as to how he will move things forward.
The hon. Member for Ochil and South Perthshire (Luke Graham) said that devolution should not be a barrier to development, and I totally agree with that. On many occasions, colleagues of mine have stood in the main Chamber here and asked about city deals, whereas the Scottish Government have invested increasing amounts in various city deals without getting the same amount of money from the Treasury.
I have been in negotiations about two city deals that impact on my constituency. Does the hon. Lady recognise that the obstacles do not just come from central Government for the devolved Administrations, but from the devolved Administrations for the central Government as well? So if there is to be a little bit of give, does she appreciate that it has to come from both sides of the argument?
I agree that in any negotiations there has to be give on both sides but the Scottish Government are giving more in a practical sense, and that is really what the people involved in the city deals on Tayside, in Stirling and in other areas of Scotland are really concerned about.
It is also very important that, when we talk about innovation and moving small businesses forward, we consider regional stock exchanges, which the hon. Gentleman mentioned. I was very interested that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey talked about the Scottish stock exchange in Glasgow closing in 1973. The square that it was in has been renamed Nelson Mandela Square, but I remember it being Stock Exchange Square for many years.
We will all be very interested to hear how the Minister responds to this debate, because none of us in this place disagrees that there is a need for long-term and patient funding for businesses to thrive and grow, to increase prosperity for all our citizens, and to increase the economy in Scotland and the rest of the UK.
It is a delight to see you in the Chair, Mr Walker.
I congratulate the hon. Member for Stirling (Stephen Kerr), who I am glad to see is back in his rightful place after his illness before Christmas, on securing this debate, and I thank the hon. Members for Ochil and South Perthshire (Luke Graham), for Strangford (Jim Shannon), for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), which are all beautiful places, and for Motherwell and Wishaw (Marion Fellows), who has just spoken, for their contributions to the debate.
Patient capital must be set in the context of a wider economic perspective and not just seen on its own. The structure of our economy has fundamentally changed over the past four decades. In the early 1980s, 26% of UK jobs were in manufacturing compared with only 8.1% now; in 1948, 46% of GDP came from the service sector and now it is 80%. That is largely due to the decisions of successive Governments, which effectively said that as long as headline growth was strong and the welfare state redistributed resources sufficiently, it did not matter where growth came from.
However, the financial crash and its aftermath have clearly demonstrated that that theory was wrong, and that reliance on an unfettered and highly volatile financial sector has not worked for the vast majority of people and businesses. Headline growth may have recovered, but it is still pretty sluggish, and nothing exemplifies that better than the way that banks have actually shifted their activities away from lending to businesses.
The Institute for Public Policy Research’s Commission on Economic Justice said:
“Across a whole range of economic indicators, the UK economy exhibits serious underlying weaknesses. On investment, research and development, trade and productivity, we perform worse than most of our European neighbours – and have done so not merely over the last ten years, but for much of the last 40.”
As the hon. Member for Stirling has said, productivity and investment are stagnant. That seems to be the way of the economy at the moment and it has got to change. A 2017 report by the ScaleUp Institute highlighted significant capital barriers to the growth of business, beyond the start-up phase, in the UK. And of course there is Brexit, but I will leave that to other people to talk about; I will not do so now.
Other countries use state direction of innovation and investment to carve out vital areas of expertise in robotics, electronic cars, clean-tech and the smart city. Labour has a plan for a national transformation fund and £250 billion of lending by our new national investment bank and a network of regional development banks, which will enable us to transform our economy over the first two terms of a Labour Government. Reconnecting the financial sector to the economy of research and development and production will transform our financial system.
We will establish a strategic investment bank, which is the sort of bank that the hon. Member for Stirling thinks is good, and he is absolutely right in that regard. It will comprise people from various agencies and organisations, and of course Members of this House. We will use the power of Government to unlock the lending power of the private sector, and we will deliver lending to small and medium-sized enterprises across the UK through new regional development banks. Our investment strategy will no longer accept the disparities across the regions that have been identified here today. It is a crucial element of any Government policy to make sure there is equity right across our nations.
Labour wants to invest in people and show that businesses can access a highly skilled workforce, which is why we will set up our national education service, allowing everyone to upskill and retrain at any point in life. That comes back to the point that it is not just a case of having patient capital investment; the ecosystem and infrastructure around that investment also matter. We want patient capital investment and we hope that we will be able to set the scene and the environment for that to develop. We will ensure that all our regions, nations, cities and towns are able to get access to that patient capital investment over the next few decades.
I thank my hon. Friend the Member for Stirling (Stephen Kerr) for raising this important issue and for exhorting the United Kingdom Treasury to look to all parts of our Union. If my history of the Treasury serves me correctly, I think the last Treasurer of Scotland was in 1708; he was sent to the Tower and then to the House of Lords, as happened in those days. But since then, the Treasury has firmly been an institution of the whole of the United Kingdom and long may it continue to be.
My hon. Friend made some very important points this afternoon, encouraging us above all to look to the long term and to ensure that both Government and the private sector are constantly trying to ensure the free flow of long-term capital, which will grow the economy and drive the country forward.
Since we came to power in 2010, we have made it easier for people in this country to found a business and grow it, scaling up British businesses so that the UK is one of the best places in the world to be an entrepreneur. A new business is created in this country every 75 seconds and there are now 1.2 million more businesses in the UK than in 2010, creating jobs and prosperity.
However, we are not complacent. We understand the need to increase access to long-term capital, to address the structural challenges facing the British economy, including our productivity gap, and to make the UK more globally competitive. So I thank my hon. Friend for his comments today, particularly his thoughts on a national investment bank, to which I will return shortly.
It is important to remember that in the UK we already have a strong equity finance market. It is one of the engines of the economy, and a national and indeed international asset for the UK. We continue to be the top destination for venture capital investment in Europe, attracting around a third of total European VC investment in 2018.
There was the patient capital review of 2017, which my hon. Friend referenced and which we commissioned and reported back on in 2017, and the Budget in 2017. We updated it again in the most recent Budget with a one-year-on update. They provided the response that he has referred to, with the panel and the experts at the Treasury who we commissioned to investigate this issue. That review concluded that there is more for the UK to do to close the funding gap and help our most innovative firms to reach their true potential.
At the Budget in 2017, my right hon. Friend the Chancellor unveiled a plan to unlock over £20 billion of additional finance for those innovative firms over the next 10 years. Since then, we have launched British Patient Capital, the vehicle that my hon. Friend the Member for Stirling referred to, and seeded it with £2.5 billion of public money. We have expanded the investment limits for venture capital trusts and for the Enterprise Investment Scheme, doubling the amount of money that the UK’s most innovative businesses can raise. And we have announced the creation of a knowledge-intensive EIS fund structure, to help stimulate further investment in research and development-intensive firms, and to concentrate our incentives on those firms that we think will be of the greatest benefit to the British economy.
We have worked with representatives across the industry to unlock pensions investment in patient capital, through our pensions investment taskforce. With total assets under management in the UK expected to exceed £1 trillion by 2025, we know that defined contribution, DC, pension schemes are set to be one of our most important institutional investors, which is why, in this year’s Budget, the Chancellor announced a pensions investment package to enable DC pension providers to invest in long-term innovative UK companies, as part, of course, of a balanced portfolio. We do not believe that it is the Government’s role to instruct independent pension trustees on how to invest on behalf of the pension holder, but we do believe that encouraging them and breaking down barriers will ensure a greater flow of capital for venture capital and for long-term and somewhat higher-risk investments that will drive the economy forward.
We have done a number of things to take forward that agenda. First, we announced that the Financial Conduct Authority would carry out a consultation on small tweaks to its permitted links rules, which was published in December 2018. We also announced that the Department for Work and Pensions would consult this year on making the pension charge cap flexible enough to accommodate the performance fees that are often associated with patient capital investment. Finally, we announced that some of the largest DC pension providers in the UK would now work with the British Business Bank to develop a blueprint for pooled investment in patient capital. That will enable those who are perhaps too small, or do not yet have the appetite required, to take part in this important form of illiquid investment. We believe that those measures will have a great impact in the years ahead.
We are not limiting our efforts to equity funding, however. We are also committed to ensuring that businesses can seek the right finance for their growth needs, which is exactly why the British Business Bank, which we have heard about today, was launched some time ago. The bank is rolling out a UK network, including in Scotland, to resolve regional issues and increase its cut-through with businesspeople and entrepreneurs throughout the Union. It operates through partners, such as high street banks, business angels and venture capital, and it will be doing that, as it should, in all parts of the UK. To give hon. Members some of the most recent statistics, as of November 2018, in Scotland the bank had provided almost £900 million of finance to more than 9,000 small and medium-sized enterprises, in Northern Ireland the figure was £114 million to more than 2,200 SMEs, and in Wales almost £500 million was provided to more than 6,000 such businesses. We hope that that will continue and that the bank will take its responsibility to operate in all parts of the UK seriously. I encourage hon. Members to engage with the British Business Bank, if they have not done so already.
On infrastructure, which we have heard about today, as a Government we have made an important decision—one of the Chancellor’s first decisions on taking up his position two and a half years ago—to significantly increase public investment in our economic infrastructure. Over this Parliament, such investment, including in digital and transport, will reach levels not seen in this country since the early 1970s. We want to ensure that that feeds through into the private sector, and if we want to deliver on those plans—we now have a £600 billion pipeline of infrastructure investment—there will need to be a partnership with the private sector, financed and delivered privately. So a thriving private sector is extremely important, and we need to consider that when taking into account some of the comments we heard earlier about political risk in this country, due to both a break-up of the Union and also the Opposition’s policies of nationalising utilities.
The Government support investment using a range of tools, including stable, independent regulation, of which we have some of the best and most admired in the world—there are, of course, ways in which we can improve it. In the Budget, we commissioned the National Infrastructure Commission to consider how we can make our independent regulators more innovative, and improve the regulatory model without throwing it aside. We use contracts for difference in renewable energy, and the £40 billion Treasury UK guarantee scheme plays an important role. As we announced in the Budget, we are now reviewing our existing support for infrastructure finance, to ensure that as we leave the European Union we continue to guarantee that good projects in the UK receive the finance they deserve. We are also making a number of interventions to support new technologies, in which we believe the public and private sectors can work together, with the public investing to crowd in private sector investments. Two notable examples are a recent intervention on digital infrastructure, and also one on electric car charge points, in which the Government have invested £200 million. We believe that there is more scope for that in the future.
On the European Investment Bank, the EIB, it is important to remember that a significant funding gap has not emerged since the referendum. We have very mature markets in the UK for infrastructure investment, for privatised utilities for example, but the Chancellor has made it clear, and we noted this again in the political declaration, that we are actively exploring options for a future relationship with the EIB, just as the bank does with other third countries. One cannot be a member of the bank if one is not a member state. We are interested in the proposal to create a UK infrastructure investment bank, for which my hon. Friend the Member for Stirling laid out some of the arguments. We think that there are important arguments there, and we will consider the proposal as part of the review of infrastructure finance announced in the Budget, about which we will give more details shortly. We think that that can play an important role and, although I would not overstate the EIB’s impact on the British economy or our infrastructure finance, there are reasons to believe that it played an important role. We believe that we can find our own way forward as we leave the European Union.
On smaller businesses, helping them to scale up is extremely important, as we have heard. The UK has a good record of creating start-up businesses, but not as good a record as we would like of ensuring that they scale up and create jobs and prosperity for all parts of the UK. That is a challenge that we have set the British Business Bank, of working to support investment such as creating regional pools of capital, which we have done with the midlands engine and the northern powerhouse, and there may be further scope for doing that in the future. We are very engaged with such questions. We are engaged also with the question of the geographical spread of venture capital and business angels, as was mentioned by my hon. Friend the Member for Ochil and South Perthshire (Luke Graham), to ensure that individuals and entrepreneurs have access to capital wherever they choose to set up their business and do not feel the need to come to London or the south-east.
Finally, through the tax system, we continue to make the UK the most competitive environment we can for entrepreneurs and investors. We are doing that through entrepreneurs’ relief, the seed enterprise investment scheme, the enterprise investment scheme and venture capital trusts, which we are continually trying to improve, to ensure that in the UK we have the most competitive market we can, directly comparing ourselves, and renewing those comparisons, with the US, France and Germany.
I am grateful to my hon. Friend the Member for Stirling and to other Members who participated in the debate. I hope that they can recognise the Government’s commitment to the agenda, and the intense work we have done over the past two years, and will continue to do in the months and years ahead. We will continue to welcome thoughts and contributions to inform those future decisions.
It was perhaps a portent that throughout the Minister’s speech I could hear cheering. It was from outside, but it entered the Chamber, and I must confess that there were many points in the speech at which I would have joined in the cheering. I am greatly encouraged by what the Minister has said and by the positive and upbeat way in which he talked about the Government’s approach to the concept of spreading this change of culture in relation to long-term capital. I thank all Members for their thoughtful speeches, including those who would normally be political opponents and could not resist banging on, again, about independence. We will overlook that. I am grateful to the hon. Member for Strangford (Jim Shannon), who hits the right note when he talks about confidence in the future. I believe in our United Kingdom and in the genius of our people, and I believe that our future is bright and that we should have faith in it.
Question put and agreed to.
That this House has considered provision of long-term capital for business.