Wednesday 26 February 2020
[Mr Peter Bone in the Chair]
I beg to move,
That this House has considered school exclusions.
It is a pleasure to serve under your chairmanship, Mr Bone, and it is super to see the Minister and shadow Minister, and many other Members, here today. I want to thank the hundreds of members of the public who sent in responses for the debate, for their views and thoughts. I also pay tribute to the Select Committee on Education, the Children’s Commissioner for England and the many charities and organisations that have done so much in the relevant area. On the day after the Marmot review, it is timely that we should be looking at one element of inequality in society that is moving in the wrong direction, and that we need to try to shift: the increasing number of school exclusions.
Soon after I became an MP, a distraught mother came to my constituency surgery. Her son, who was on the way to being diagnosed as autistic—we all know how long the diagnosis can take—had been doing well at school, but when he had come back after half term lots of changes had been made to the classroom. He was unsettled by that and ended up demonstrating behavioural issues over a period of a week. He was permanently excluded from school as a result. He was five years old. I found it utterly extraordinary.
The boy’s mother had the wherewithal to come to her MP and find a charity to help support her. She managed to overturn the decision on appeal. She also happened to be a black woman. She sat in my surgery and said, “I do not want my son to be another one of those black boys.” It was horrifying, and I subsequently learned that it was not an uncommon example and that there is a huge problem. There has been a 70% increase in permanent exclusions since 2012, and just 1% of children who are permanently excluded get a good pass in maths or English at GCSE.
Of particular concern to me is the link to the epidemic of serious youth violence, which has left hundreds of young people dead on our streets in recent weeks. In Croydon there was a review of 60 cases of serious violence—60 young people who were either victims or perpetrators of crime. Of those 60 children, every one who was convicted of a crime had been excluded from school, and one in three had been excluded in primary school. We disagree on many things in this place, but I think we can all agree that our children deserve the best start in life, and that no child deserves to be left behind. I secured the debate because too many children do not get that start, and too many are being left behind. I fear that the draconian language coming from the new Government may make the problem worse, not better.
Today’s debate follows a report by the all-party parliamentary group on knife crime on the link between violent crime and school exclusions. We set up the all-party group in 2017 to develop solutions to the knife crime crisis. We had repeatedly been told anecdotally that school exclusions were contributing to a feeling of abandonment and hopelessness among young people vulnerable to crime. There is a correlation. Exclusions have risen by 70% as knife crime has reached the highest levels on record, but it is not enough simply to draw those parallels.
I congratulate the hon. Lady on securing the debate. On the point about the spike in figures, between 2000 and 2010 there seemed to be a welcome dropping off in the number of exclusions. Does the hon. Lady agree that we need a fundamental re-examination of why there has been a spike in the past four or five years, to try to get figures down again, for the reasons she has articulated?
That is absolutely right, and the peaks and troughs in the numbers of school exclusions pretty much mirror those for knife crime. We need to understand why those things are happening and actively work to reduce the current peak in school exclusions.
The all-party group, supported by Barnardo’s and Redthread, spoke to young people across the country who had convictions for knife offences. They told us that being excluded had left them with more time to spend on the streets, getting into trouble. We sent a freedom of information request to local authorities, to get a better understanding of the state of provision for children who are excluded. The research revealed a crisis in support for excluded children. We analysed evidence from organisations such as the Institute for Public Policy Research and The Difference, charting the worrying rise in off-rolling and “grey exclusions”, and from the St Giles Trust, whose work with victims of county lines exploitation drew a direct link to those who were excluded from school.
We know that the public are concerned about the issue. Barnardo’s polled the parents of children under 18 and found that three quarters believe that children who are excluded are more at risk of involvement in knife crime. Children have not got 70% naughtier since 2012; something has gone wrong, and it is leaving vulnerable people exposed to involvement in crime. My hope today is that the Minister will listen to the evidence that the all-party group has collected, and the testimony of other Members in the debate, and agree to take some of our recommendations forward.
I will quickly look at the statistics. The latest set of data is for England in the year 2017-18, when there were 7,900 permanent exclusions—that is the 70% increase that I mentioned. The highest levels were in Redcar and Cleveland, and the highest levels for fixed-period exclusions were in Hartlepool. Half of all excluded children have special educational needs, yet support for special educational needs has undergone some of the biggest cuts. According to 2019 figures, it is estimated that there have been cuts to SEN funding of 17% per pupil since 2015. The SEN type most affected by exclusions were people in the social, emotional and mental health categories.
My hon. Friend referred to the exclusion of children with autism. Another issue is attention deficit hyperactivity disorder. People with ADHD are over-represented in the prison population. The Mayor of London is investing £4.7 million to tackle school exclusions via the violence reduction unit. Does my hon. Friend agree that the Government would do well to follow his example and invest more in support for schools and for vulnerable children?
My hon. Friend has anticipated something I was going to say later, which is that many organisations are pushing against the tide and trying to address those difficult issues.
There is a link between children’s family income and exclusion: the worse off a child is economically, the more likely they are to be excluded. Children who are eligible for free school meals are four times more likely to be excluded. There is a link with ethnicity: rates are higher among mixed-race and black pupils. There is a link with gender: males are more than twice as likely to be excluded as females. There is also a link with geography: the rate of permanent exclusions for the most deprived areas is higher than for the least deprived ones. We know that there is a link to what then happens in future life: 42% of adult prisoners and 90% of young offenders were excluded from school.
At the same time as the number of exclusions has increased, the number of pupil referral units and alternative provision academies and free schools has decreased. The number of APs has steadily fallen, from 349 in 2013-14 to 328 in 2017-18, yet the number of pupils has risen year on year. The number of fixed-period exclusions in those schools has risen dramatically, from 15,500 in 2013 to 26,500 in 2017, suggesting a growing inability to cope with the pressures internally.
On the issue of knife crime, there were 44,771 offences in the year ending September 2019. That is the highest figure on record, up from 23,751 for the year ending March 2014—an 88.5% increase over that period. For the year ending March 2019, juveniles—those aged 10 to 17—were the offenders in one in five cases.
I want to say something about our research on the link between knife crime and exclusion. Barnardo’s surveyed all local authorities in England, 80% of which responded, and discovered that one in three councils have no vacant places in their pupil referral units. Even where there is space, there is a postcode lottery in relation to the quality of support provided. Nationally, almost one in five spaces are in alternative provision that Ofsted has rated inadequate or requiring improvement.
It is likely that pupils who are not being educated in the state sector are being educated in non-maintained provision and, as many of us will have seen in our case load, families are sometimes strongly encouraged to home educate. The alternative providers may be offering quality provision—many of them do—but there is also the problem that many of them are not full-time, breaking the statutory obligation to our young people. Every excluded child is legally entitled to full-time education in alternative provision, but our investigation found that that is not happening, with some excluded children getting as little as two hours’ schooling a day.
The system is at breaking point, and not just because of the 70% rise in official exclusions. Research from the IPPR and The Difference revealed that the number of children in AP is five times higher than the number of officially permanently excluded pupils; the true number is around 50,000, with the growing use of managed moves and off-rolling that, again, many of us will have heard about in our case load. The report by the St Giles Trust that I referred to earlier was commissioned by the Home Office. It looked at the issue of children running drugs between London and Kent, and found that 100% of those involved were not in mainstream education; they were either in AP or not in any form of education at all.
The Mayor of London produced research that found that excluded pupils are particularly vulnerable to exploitation and criminal gangs, with nine out of 10 young people in custody in London having been excluded. Research by the Mayor’s Office for Policing and Crime indicates that pupils in alternative provision are more likely to know someone in a gang or who carries a knife than those in a mainstream setting. Professionals giving evidence to our all-party group believed that criminal gangs are aware of how school exclusions can increase vulnerability and are seeking to exploit this fact. We even heard about pupil referral units where criminals would wait outside and ask people if they wanted to be involved in county lines as they left the unit.
Of course, those strong correlations do not prove that school exclusions are causing knife crime. The fact that someone is excluded does not mean that they will become a criminal, and school exclusion is often a symptom of vulnerability for many years throughout their life. However, there is a common thread running through all the vulnerable children who are being excluded. There is a great deal of commonality between them, because of the issues they face, and those who carry knives. They are not getting the support they need from a system that is catastrophically failing them.
The Timpson review was released last May, but the Government are yet to act on any of its findings. The review had several important findings that chime with those of the all-party group, particularly on off-rolling and the quality of alternative provision. I am sure that the hon. Member for Eddisbury (Edward Timpson) will want to go through that in more detail, but suffice it to say that it is disappointing to see the lack of action on such a crucial issue, having been presented with so many clear recommendations from that report and our all-party group.
The previous Education Secretary, the right hon. Member for East Hampshire (Damian Hinds), said in 2018 that he would not rule out legislation to ensure more accountability for schools that permanently exclude children and place them in alternative provision. However, there have been no changes to school exclusions legislation in England in the past 12 months. The Government said in response to the Timpson review that they would launch a consultation, but that consultation has yet to be launched. They also said in their response that they would rewrite their guidance on exclusions and behaviour and discipline, which they are yet to do.
I congratulate my hon. Friend on securing this debate on such a vital issue. Schools such as Northolt High School in my constituency want to keep the number of exclusions as low as possible. They know the importance of that and they want to do it in a positive and inclusive way, but they need funding. The school has submitted an expression of interest to the Excluded Initiative, which the John Lyon’s Charity is running with the Evening Standard and others, to fund their inclusion programme. Northolt High School should be strongly commended for taking that initiative, but I am concerned that such an important programme may only go ahead if it succeeds in getting charitable funding through a scheme that will no doubt be overbid. If the school’s bid to that initiative is unsuccessful, would she join me in urging the Minister to commit to meeting its excellent headteacher and others who may miss out on such bids, to see whether other funding can be found to support their plans?
I know that the Minister is always very obliging in agreeing to meetings, so I am sure he will do that. My hon. Friend makes a good point about the Evening Standard campaign; it is very worthy and greatly to be commended, but it is no replacement for what the state should be legally providing for our children.
There were warm words after the Timpson review, but the new Conservative Administration seem to lack any recognition of the link between exclusions and crime, and they seem to be worryingly relaxed about the exclusion of children. The Conservative manifesto put an emphasis on backing headteachers to exclude children and a sinister suggestion of creating secure schools for young offenders, all the while failing to restore the per pupil funding that was cut from our schools.
A greater emphasis on teachers being able to discipline children, 10,000 more prison sentences in place and secure schools for young offenders: these are draconian measures to deal with problems that would be far better dealt with by tackling the underlying causes in the first place. It is blatantly obvious that funding cuts have meant that schools are increasingly unable to properly support the heightened needs of students, particularly those with special educational needs.
When I surveyed headteachers in Croydon, the vast majority had cut SEN funding due to funding issues. It is no wonder that they are then overwhelmed and so many SEN children are excluded. As has already been mentioned, there are many organisations, large and small, working against the tide to try to help the situation, from Another Night of Sisterhood in Croydon—a small organisation that works to try to support parents who do not know how to deal with potential exclusion—to the Mayor of London, who has awarded £4.7 million to areas of London blighted by youth violence to prevent pupils from being excluded.
I again pay tribute to the Evening Standard’s £1 million campaign, The Excluded, which aims to encourage greater inclusion in schools by funding inclusion units. Some 57 applications from local schools have already been made. The scheme is modelled on what was done in Glasgow alongside the Scottish Violence Reduction Unit, where exclusions were reduced by 85%, and on pioneering London schools such as Dunraven in Lambeth.
Turning to what needs to be done, our all-party group’s investigation concluded last year and made a series of recommendations, which I hope the Minister will look at. Perhaps he would agree to meet the all-party group to discuss their implementation. School rankings and results must take account of all pupils, including those they exclude. All excluded children must have access to the full-time education to which they are legally entitled, which many do not currently get.
All education providers must have the funding and backing they need to support vulnerable children, and schools must be recognised for the central role they play in a multi-agency response to keeping children safe, with funding to support that work. Everyone working in the education sector must be trained to understand vulnerability and trauma. I have been on trauma training, and it really does change the way you view a child; anger is a cry for help, and understanding the issues is enormously useful for teaching. Schools should be supported to focus on prevention and early intervention, and every council should have a leader responsible for children excluded from school.
We know these things can be done. In Scotland only five pupils were permanently removed from the classroom in 2016-17, and in South Tyneside exclusion rates have fallen by almost 60% over the past 10 years. Wandsworth used to have one of the highest rates of permanent school exclusions but now has one of the lowest. Schools in my constituency, such as St. Mary’s Roman Catholic High School, manage to exclude tiny numbers of people despite a challenging intake and challenging issues.
My questions for the Minister are as follows. Fundamentally, does he recognise the issues that I am talking about, and does he want to see a reduction in school exclusions, or is he happy to continue to see an increase at this rate? Why are so many vulnerable children getting less support than they would in mainstream schools, especially since in many cases excluded children are exactly the children who need more support? Will he conduct a review into capacity within alternative provision and part-time education, to understand whether there are enough resources to ensure that all pupils who are excluded get the full-time provision to which they are legally entitled? Given that half of all excluded children have special educational needs, what steps is he taking to make up for the vast funding cuts seen to SEN support?
The Education Committee’s knife crime inquiry concluded that schools play a central role in providing prevention and early intervention through a multi-agency response to keeping children safe. Violent crime has doubled in recent years, with more and more young people dying on our streets. There is no single causal factor when it comes to knife crime—if there were, we would have solved it before now. We need to look at this epidemic from every possible angle and focus on preventing crime before it occurs. Exclusions must be a last resort, and alternative provision must be full-time, high-quality and properly resourced. We can cure the epidemic of youth violence if we start from the principle that no child is left behind.
I thank the hon. Member for Croydon Central (Sarah Jones) for securing the debate.
School exclusions are the last resort for any headteacher. In my eight years as a classroom teacher in state secondary schools and as a head of year overseeing the behaviour, attendance and achievement of hundreds of students, exclusions were always the last course of action. I feel a little uneasy in this debate, because intentionally or not, I worry that it undermines the first-class work done by teachers and pastoral staff in the vast majority of schools to keep students in school while placing little to no emphasis on parents or carers. There is not some excluding spree going on; it is not a decision taken lightly. The cost-benefit analysis undertaken by school staff is extensive and manifests in many ways. I have seen headteachers keep in internal exclusion children who should in fact have been excluded, due to a fear of triggering an Ofsted inspection and breeding further stresses for teachers, pupils and parents.
I disagree with the premise that school exclusions are to blame for the rise in knife crime. Of course some young people come from troubled homes and may require extra pastoral care and educational support, but there comes a point when we must award more agency to the actions of our young people and show them that poor behaviour has real-time consequences, both at school and in adulthood. We should unreservedly celebrate schools with high expectations and zero-tolerance policies. We should follow the example set by Michaela Community School in Brent and Magna Academy in Poole, both of which have excellent Ofsted ratings, excellent results and the highest standards of behaviour.
When a child is removed from the classroom and placed in isolation or excluded, it is because their behaviour is damaging the learning of their peers or poses a risk to other students and staff. We have created a culture in schools that means we must try to find an excuse for poor behaviour of young people. It is time we start to back our teachers, not run them down. It is forgotten far too easily that teachers spend the vast majority of their time and energy to help and support the 2% to 3% who display poor behavioural discipline, neglecting for large portions of the school day those pupils who behave correctly and simply want to learn.
No, I do not believe that children are naughtier. In fact, I think behaviour has improved, which comes from having firm discipline within a school. Students thrive off boundaries that are set and firm, and not moveable. In the early part of my teaching career, I tried to be a friend of the kids, which certainly backfired in my classroom, to the point where I was told to my face to “Eff off” in front of my class. As I developed a firm set of boundaries, I found that my classroom reacted much better; the kids behaved because they knew the expectations. It is important to ensure headteachers set a standard that every teacher meets across the school, therefore creating a culture.
Does the hon. Gentleman therefore think that young black men from deprived backgrounds are the worst and deserve their higher rates of exclusion from schools—the poorer young black men with special educational needs who are much more likely to be excluded than other groups?
The hon. Lady touches on points regarding special educational needs and disabilities, and I intend to talk about my support for better quality alternative provision. I certainly do not look at this along racial or gender lines or across class lines, because at the end of the day behaviour cuts across all those different things. I represent a predominantly white working-class community, where there are students who misbehave just as much as someone from a black or Asian community in a more ethnically and culturally diverse community. I do not wish to virtue signal. This is an across-the-board problem involving people from all backgrounds.
A child’s environment affects behaviour, so why would a school having firm boundaries be a negative? To exclude a pupil is a long, stressful and convoluted process, and the fear of losing an appeal means that many schools provide a wide range of support, from educational psychologists, peer mentoring, behaviour report, positive behaviour report, incentivised reward trips, one-to-one in-classroom support via a teaching assistant, conflict resolution and regular parent or carer meetings. Those are just some of the many tactics I used in my career to keep a young person on track, but I agree that we must have better alternative provision and ensure that a wider and more tailored system of support is accessible to pupils who have been excluded or are at risk of being excluded. I do not want excluded kids to not have a proper education; I want them to be guided, assisted and supported, but my stronger urge is to protect the education of those willing to be educated and those doing the educating.
Given the statistical evidence about the number of youngsters with special educational needs who are excluded, is it not the systems within the schools—so not the teachers’ fault—and the resources available to schools, both inside the school and outside, that actually sell those youngsters short? Quite often, their special educational needs are not properly identified until after their exclusion.
The hon. Gentleman brings me on perfectly to what I was about to say. If he will allow me, I will go on, and if I do not answer his point he should feel free to intervene again.
The Government must of course invest in alternative provision, but schools also need to work collaboratively across their local areas to ensure that the best possible course of action is pursued. Solihull Academy is an excellent example of a group of secondary schools across Solihull working together to find tangible, workable solutions, creating Solihull Academy and making space in the grey area between mainstream education and SEND education. To answer the hon. Gentleman’s point, we absolutely have a big issue with children diagnosed with SEND needs who do not need to be in a special educational needs school but struggle to access mainstream school. Solihull Academy is the perfect example of a school that in that grey area, where those students can get proper one-to-one support and smaller class sizes, allowing them to thrive educationally while not feeling the pressure they currently feel in mainstream secondary schools. I hope that answers his point.
Quoting an example of good practice is all very well, but I am afraid that anecdotes of local good practice do not actually answer the systemic failures across the whole country. In my region, the north-east of England, the number of youngsters excluded from school has gone from about 190 in 2012-13 to well over a thousand in the last year for which statistics are available, 2017-18. The system is failing, and the lack of resources for special educational needs in particular is at the root of the problem.
The Government committed to investing £780 million into supporting SEND children. I firmly believe that schools go above and beyond. Having spent the vast majority of my career in schools where well over 50% of pupils qualify for the pupil premium and well over 30% have SEND needs, I can only commend the actions that have been taken. Obviously I cannot speak for the hon. Gentleman’s constituency or area, but I would be more than happy to sit with him and listen to his examples.
By utilising smaller classes, encouraging more one-to-one contact and broadening the curriculum, extra support will be accessible and available to kids who need it. Reasons for behavioural and social issues in our young people are widely varied and complex. It is reductive to claim that vulnerability, exploitation, youth violence and abuse will be solved by avoiding exclusions. I have been verbally abused and physically assaulted in front of pupils in the classroom, in the playground and in front of parents. The job of a teacher is to educate and to be an example, not to be treated like a punch-bag. Policies and laws are in place to protect our police, emergency workers, nurses and so on. If we do not have zero-tolerance policies or exclusions, where is the protection for our teachers?
To some extent, we are not disagreeing. I do not think anybody is suggesting that we ban school exclusions or that they are not a really important tool. I do not think I have met a single headteacher who would think for one minute that exclusion does not need to be there as the last resort. The argument we are making is that there has been a huge increase in school exclusions, that there is a reason for that—it has to do with funding and some of the issues about special educational needs in particular—and that we would like to see those numbers go down. Smaller class sizes, more interventions in school and more support for kids would all be brilliant. I think that we agree on those things and I would not want to give the impression that we do not, but my argument is that the levels of exclusions are increasing at a worrying rate and need to come down.
Yes, I find that I normally agree with hon. Members on both sides of the House on what we want to achieve; we just disagree on the method by which we want to achieve that.
I do believe that one issue is attendance. The reasons why kids are not attending school are often overlooked in this context, but again my emphasis is on the young people’s parents and carers, who in my opinion are failing to provide the necessary education outside the school grounds, which undermines what is then done in the classroom by the teacher. In the real world, there are real consequences. I believe that our educational facilities have the responsibility not just to prepare our young people academically, but to teach them that in life, actions have consequences.
It is an absolute pleasure to serve under your chairmanship, Mr Bone.
Some hon. Members here will know that I have spoken a number of times in the past year about county lines and the difficulties facing many young people in my constituency. In my experience, school exclusions are a significant event in the awful and traumatising experience of county lines exploitation. Far too many of my young constituents in Newham have been subjected to county lines or its consequences. I am therefore very grateful to my hon. Friend the Member for Croydon Central (Sarah Jones) for giving us the time and space to talk about this crucial issue.
I think, as my hon. Friend does, that the change of tune that we have heard from the Government about exclusions is truly worrying. I thought that across the House we were moving in the right direction. We had the Timpson review and repeated statements by Home Office Ministers and others with whom I have worked closely on these issues—we often find common ground and agreement—and I really started to believe that the Government were beginning to get it. I was starting to pick up a bit of hope, but that hope was dashed, because the Conservative party manifesto pledged to continue fragmenting the education system with academies and free schools, pledged to
“back heads to use exclusions”
and pledged, as we have heard from my hon. Friend, to expand alternative provision—presumably to cope with the inevitable increase in exclusions that would be the result.
I suspect that the Government know that there is already no way in which local authorities can do their duty and ensure that the local school system is inclusive. They are supposed to ensure that no student is excluded without a genuine route back into mainstream education, but this Minister must know that, often, once young people are excluded from our schools, there is absolutely no way back—none at all—into mainstream education. I am worried that the Government’s apparent direction will make that situation much worse.
I remind the Minister again why this issue is so important to my constituency. Exclusion is clearly linked with the horrifying rise in violence and the deaths of so many of my local children on the streets of Newham. When I have talked to the mums of the children who have been groomed and got caught up in the drug dealing, carrying of knives and violence, they tell me loud and clear—they will tell anyone who wants to listen—that their son’s exclusion from school was a tipping point. It did not create the problem, but it made it worse—it made it completely worse.
I talk to parents and young people and I am clear that the bad behaviour comes as a result of real and unimaginable fear. It comes from seeing things and knowing things that I would not want to see as an adult. They have seen people stabbed or shot, or their friend has been stabbed or shot. The fear that they experience is real and has real causes. The world around them is frightening and hostile—it is terrifying. They do not see the police or other adults around them as able to protect them. They do not think it is possible to protect them, so they have to protect themselves. They have to find coping mechanisms, and sometimes that involves going along with the person who is abusing, manipulating and grooming them, because they see no alternative. If collectively we do not protect them, we do not understand that they are acting out of fear and we simply punish the behaviour rather than dealing with the root causes, we will make things worse. There is no doubt about that. The young person understandably will not trust us, and we will fail them.
As my hon. Friend said, the St Giles Trust found in relation to 100 teenage boys who had become involved in county lines that every single one of them had been excluded from school at some point or had spent time in a pupil referral unit. I have spoken before about the impacts of exclusion. I have talked about how children are cut off from their friends and teachers and plunged into an environment poisoned by gangs and how that makes them accessible to groomers. When a child is excluded, it is not some short sharp shock. It will not enable the young person to rethink their life and behaviour and make a change, because there is no way back. Basically, they are left at the PRU, even more vulnerable to the groomers who are sitting outside the gates. The young person cannot escape, because the people grooming them and using them are sitting there, waiting for them to walk through the gates. The groomers are really clever: I have spoken to mums who told me how the groomers managed to manipulate their child into getting excluded in the first place, because it made access to the child even easier.
If a child is excluded, alarm bells will not ring because of truancy. Teachers who have known them as they have been growing up in the school will not see that their behaviour has massively changed, so an alarm bell about the child’s direction in life just is not rung. There is nobody to notice that they have several mobile phones, which is often a massive indicator that the child is involved in illegal drug dealing.
Let us be clear that the children we are excluding are often really quite able children. They are bright and very articulate, and why? It is because they make great salespeople. When it comes to county lines, they have the nous to know how to deal with the circumstances and situations in which they find themselves, and they can chat to their mate and encourage their mate to join them. As I said, they are good salespeople, but these are the children we are leaving alienated, angry and vulnerable. Then we put these children—they are children—with their challenges and vulnerabilities all together in the same place, and provide easy access to them for the people who want to exploit them.
As we know, pupil referral units do not provide the support that vulnerable children need. They are supervised for only a few hours a day; the rest of the time, the young person is often unsupervised and on their own. There is little mental health support, so the trauma that the kids have gone through just is not worked on in any way. There is little chance of their getting back into mainstream education. The buildings are basically like prisons, but the children we are sending there have not been accused of any crime.
Some of the children believe that they are actually involved in an alternative economic model. They have seen their mums and dads going to work and doing two jobs—the lowest quarter of wages in my constituency does not cover the lowest quarter of rents in my constituency. They have seen the adults around them basically with nothing. Then we exclude them from school, and we know that there is no way back into education, so what do they do? They think that there is only one way forward for them, and that is to carry on. We are basically giving the groomers an endless supply of victims. The kids get off-rolled—it happens illegally, but we know it happens—and then they have nothing to do and nowhere to go.
I have heard about that from some courageous women, the mums of the children involved in county lines, who are trying to stand up to the groomers. They have to make hard choices—tough choices—that I could not make about my children’s future. We need to learn from their experience, but too few people listen to the experience of Newham mums. I think that is part of what has gone wrong.
The truth is that exclusions ruin lives, create vulnerability to exploitation by organised criminals and fuel violence in our communities. We desperately need big changes to the school system to achieve a rapid reduction in exclusions. If the Government do not reverse course, and if they do not listen to Newham’s mums and the experts—please listen to the experts and not to the Daily Mail headlines—we will see more lives ruined, more crime, more murdered children and more traumatised communities with wounds that take a very long time to heal.
It is a pleasure to serve under your chairmanship, Mr Bone. I thank the hon. Member for Croydon Central (Sarah Jones) for raising this important issue. It is a pleasure to follow the powerful and challenging contributions from the hon. Member for Stoke-on-Trent North (Jonathan Gullis) and, in particular, from the hon. Member for West Ham (Ms Brown), who spoke passionately.
The rising number of children excluded from school should trouble us all. Increased pressure to concentrate on students who can achieve top results, to seek prominence in league tables and to avoid students who are resource intensive, along with the increased independence that academy status affords, provide both the temptation and freedom to off-roll and exclude certain students. This is morally unacceptable.
I want to focus on the rising number of students who are effectively excluded: the thousands of students in our schools with special educational needs that are not met. It is clear that because of counterproductive Government spending rules, many children are in school but effectively excluded from the support staff and resources necessary to enable them to get the best from their education.
In my 15 years in this place, I have never seen school budgets under so much pressure. Headteachers are having to cut staff numbers almost every year and teaching assistants working with special needs students are most vulnerable to the cuts. Teachers are overstretched as it is and now they are not equipped with the resources to teach those under their care.
I recently spoke to headteachers in the South Lakes and asked them to tell me about the challenges their schools face. Almost without exception, they said that their biggest challenge was meeting the needs of children with special needs. On top of devastating Government cuts and perverse special needs funding rules, every school with an education, health and care plan must find the money from its own budget to fund the first 11 hours of support. That means the Government are effectively punishing schools that do the right thing by taking children with special needs and rewarding schools that say to parents, “I am sorry, but we cannot really support your child here”—an exclusion in all but name.
Cuts in support staff have left teachers isolated in supporting children’s needs in the classroom. St Martin & St Mary Primary School in Windermere described to me the extremely high criteria set to qualify for an education, health and care plan in the first place. We often see that only those children with the most severe additional needs receive any funding support at all; other children with needs are left with no additional support.
Many schools in my constituency told me that parents must contend with incredibly long waiting lists for a special educational need referral, followed by delayed assessments due to a lack of educational psychologists. Children are then often refused support, irrespective of their evident need. Schools in Cumbria, therefore, have to find the resource to support the significant numbers of children who are in limbo waiting for an assessment, who have needs but do not have an EHCP, and who may never get one while at their current school.
The situation results in exclusion within the classroom. Children fall behind and feel isolated from the rest of the class, because they are not being provided with the adequate support to learn and develop. As the attainment gap grows, children can become frustrated and despondent, fostering negative attitudes to school. There is a real danger that they will disengage entirely, exacerbating the problem further. Those are often the children who end up being off-rolled and formally excluded later in their school career.
This week I have been supporting the parents of a child in my constituency, whose school was unable to support them. The school lacked the funding to meet the evident needs of this child. The waiting list for an EHCP meant that resources were so far from becoming available that the school has had to say that it cannot do what it knows it needs to. The parents’ distress is immense. I am angry on their behalf. Their child is effectively excluded from school because of stupid penny-pinching rules. This is unacceptable. Teachers and the children they are so desperate to care for are being failed.
Many children also face exclusion before they even get to the classroom. Many children with special educational needs bring vibrant and valuable contributions to the whole school, their classes and their peer groups. That should be valued and encouraged, but in reality the system makes catering to their needs feel like a pressure and burden on schools. That is completely at odds with society’s claim to champion diversity and value individuals regardless of their ability.
The Government are effectively demoralising our teachers and letting down our children, because schools must foot the bill for those first hours of provision for children with an education, health and care plan. Schools are massively disincentivised from enrolling them. We see national, systematic exclusion of special educational needs children. The headteacher of one of the larger high schools in the South Lakes told me of the real financial pressure of being expected fund those first 11 hours of an education, health and care plan out of their school’s general annual grant funding. That, on top of the Government cuts to the school’s overall per-pupil funding, means that it has no reserves or slack from which to provide this support. It is not alone. This is a pattern right across south Cumbria and beyond. I see it every week as I visit schools and listen to our teachers.
The special educational needs co-ordinator at Cartmel Primary School told me that the local authority recommends it as a school suitable for children with an EHCP. Around 5% of children at the school have one. That is significantly above the national average. While the school expresses its immense pride in its reputation for special educational needs provision and its inclusive nature, through which it earned that reputation, it is in danger of buckling under the financial pressure that falls on its shoulders alongside the usual strains on a small school’s budget.
Cumbria is as vast as it is beautiful. In rural communities such as ours, the alternative options, which a child in a more densely populated part of the world might enjoy, do not exist. The head of Langdale Primary School described how for many pupils the available special schools require travelling extreme distances. She wrote in some distress that, despite the incredible hard work and enthusiasm of her excellent team, their ethos—to be centred wholeheartedly on individual children—was coming under significant strain.
I am grateful to all the headteachers who contacted me—many more than I have had time to reference today. They are all hard-working, enthusiastic and caring, and so are their staff. I am incredibly proud of them, but they are desperate. They are outstanding professionals who love their jobs and schools, but Government funding has put them in an impossible position.
When we talk about exclusion, the finger is often pointed at school leaders. However, those are people driven to make a difference. In the lives of the children of Cumbria, whom they serve, the school leaders are the most heartbroken and outraged by how they have been stripped of the ability to meet the needs they know they should and to support those children in the way they know they should. I stand here on their behalf to say that it is not good enough. That must change for our children, our teachers and parents.
In effect, the Government are excluding children with special educational needs from having the best education, while systematically penalising the schools that do the right thing. That must change. I challenge the Minister to ensure that all funding to support children with EHCPs is delivered centrally and does not come from the school’s own budget; that there will be a speeding up of referrals for EHCPs and their delivery; and that children with additional needs are not excluded before they even start.
It is a pleasure to serve under your chairmanship, Mr Bone. I begin by thanking my hon. Friend the Member for Croydon Central (Sarah Jones) for securing this important debate and for the important work she has done as chair of the all-party parliamentary group on knife crime. Since 2012, the number of school pupils being permanently excluded has increased by 70%. Temporary exclusions, where a child is suspended for a fixed period, affect almost half a million children, and that is just the tip of the iceberg. Thousands of children have been unofficially moved from schools, or off-rolled, because the school is failing to meet their needs. A YouGov survey, published by Ofsted, found that children were being off-rolled particularly when close to their GCSEs. In essence, children are being failed. We do not even know how many children have been off-rolled by schools across the country.
There is no question and no doubt that school exclusions are a social justice issue. It is no coincidence that there is a correlation between child poverty rates and exclusion rates. They are too high and they are in sync. According to research carried out by the Institute for Public Policy Research, excluded children are twice as likely to be in care and four times more likely to be brought up in poverty. Despite what the hon. Member for Stoke-on-Trent North (Jonathan Gullis) said, exclusions disproportionately impact on black Caribbean boys, who are nearly 40 times more likely to be permanently excluded from schools than other pupils.
Perhaps most striking is the rate of exclusions for children and young people with special educational needs and disability. As a disabled woman myself, I benefited greatly from the special educational needs provision that I had growing up going to primary and secondary school, so what is now taking place for those children is a scandal. More than 418,000 children with SEND were excluded in the last academic year; the majority have been diagnosed with speech and language needs and are unable to communicate with their teachers and support networks in their schools. What is happening is tragic and clearly a result of funding cuts, despite what the Government may say. Schools are being fundamentally let down and are fundamentally not able to provide support for those children with special education needs.
The National Education Union estimates that there is a £1 billion funding gap in SEND provision for our mainstream schools. Despite what the Government claim they are putting in, there is still a shortfall. In the London Borough of Wandsworth, where my constituency is located, a recent Ofsted and Care Quality Commission inspection concluded that SEND provision is in need of significant improvement. It revealed that there are currently 170 outstanding education, health and care plan assessments, and that is echoed across the country, where children are being failed and are not receiving their EHCP plans to ensure that the support they need in school is being implemented.
Inadequate support and provision for disabled children and those with special educational needs means they are excluded from education altogether. That is happening to my constituent, whom I will refer to as Jacob. He was diagnosed with attention deficit hyperactivity disorder at age 10. When he arrived at his secondary school, his parents were told that he risked being permanently excluded if he failed to sit up straight or turned around in his seat. Those behaviours are unavoidable for someone with ADHD, and Jacob was soon forced into a reflection room, where he was forced to sit in silence for large chunks of the day. The refusal to make any reasonable adjustments for Jacob’s behaviour in school has resulted in extreme anxiety for both Jacob and his parents. How is it acceptable that a young child is being put through that and being treated in that way?
Jacob’s parents are terrified by the prospect of a permanent exclusion and are worried that he will never get the chance of a decent education. A decent education is a human right. Does the Minister agree that it is unacceptable that children who are registered with special educational needs are not given the support they need? Someone with those needs is five times more likely to be permanently excluded. Does he agree that it is time for us to adequately fund SEND provision?
We know that the story does not end there. Once a child is off-rolled or excluded from school, they face exclusion from their communities, from society and from their friends. Many are placed in what are called pupil referral units or, as many would call them, prison referral units. The published Ministry of Justice figures show that 42% of prisoners have been permanently excluded from school, so it is no coincidence that the soaring rise in school exclusions is coupled together with the rise in crime and knife crime in my constituency and constituencies like it across the country.
My hon. Friend mentions that figure of 42%. Does she agree that the prison inspectorate report shows that nine out of 10 young people in police custody have been permanently excluded? A report by the London Assembly highlighted that school exclusions correlate with violence and criminal activity. Does she agree that the Government should welcome the Mayor of London’s funding for additional school provision and roll that out across the nation?
My hon. Friend is absolutely right. It is time the Government took some leadership from the Mayor of London, who is doing a fantastic job in trying to address some of the challenges that our young people are facing, despite the funding cuts implemented by the Government.
My hon. Friend the Member for Croydon Central raised this issue, but it is shameful that the Government have not taken action on the Timpson review. When the Minister responds, will he tell us when that will actually begin to happen?
In conclusion, I return to the point that I made earlier in my speech: it is no coincidence that during the period in which exclusions have risen, child poverty rates have also shot up. Countless youth services and provision have closed. Schools have faced billions in cuts. As the IPPR has illustrated, children in poverty are more likely to be excluded from school, and with more than 5 million children expected to be living in poverty by 2022, the problem is set to worsen. Disadvantaged children such as my constituent Jacob are being trapped in a vicious cycle. Breaking that cycle requires urgent action from the Government to end the funding crisis in our schools, outlaw the dangerous practice of off-rolling and overhaul our education system so that it is open to all children. Finally, we have two weeks until the Budget. Will the Government commit to investing in our young people and our children, because they are the future?
I will keep to your six-minute limit and ensure that the hon. Member for Eddisbury (Edward Timpson) has an equal amount of time to speak, Mr Bone. I thank the hon. Member for Croydon Central (Sarah Jones) for setting the scene, and it was good to hear all the other contributions. The hon. Member for Stoke-on-Trent North (Jonathan Gullis) referred to his experience as a teacher, which was good to hear in this debate.
The issue is twofold. We must consider the very best interests of the child in question, but the flipside is that we also have a duty of care towards teachers, who have 27 or more other pupils in their classes, to whom they must also provide an education. That scenario is already difficult for all involved, and then we add in the parents—and it can be a recipe for disaster. I was shocked to hear the hon. Member for Croydon Central refer to a five-year-old who was excluded. I find that incredible. I am glad that the matter was sorted—well done to her for doing so. It is good to see the Minister and shadow Minister in their places, and I look forward to their contributions.
I was a rather rambunctious young man, and many a broom crossed my back from my 4-foot-10-inch mother. She loved me, but she also disciplined me with the same enthusiastic passion. My hands felt the sting of the ruler at Ballywalter Primary School, but that is not how things are handled now, thank goodness.
Northern Ireland’s Department of Education publishes annual statistics on public suspensions and expulsions, and the figures from the Library show that Northern Ireland is not the worst for expulsions and suspensions. That is good news. Permanent expulsions numbered only 15 in 2017-18 and the temporary exclusion rate was only 1.4%, so that is good. The higher suspension rate was for key stage 4 pupils, who were in GCSE phases.
The Secretary of State for Health and Social Care, the right hon. Member for West Suffolk (Matt Hancock), has referred to money set aside by the Department of Health and Social Care for mental health issues. Has the Minister suggested that some of that money should be drawn down to help in education? That would be important. The Northern Ireland Affairs Committee, which I sat on in the last Parliament, undertook inquiries into health and education. We were aware that in Northern Ireland children as young as 10 have experienced mental health issues. It is important to address that.
The pressures on children and, most especially, on their mental health are at an all-time high; the education authorities in Northern Ireland, as well as here on the mainland, have confirmed that. Frustration is often easily expressed in the school setting. There is an onus on teachers to educate to a high standard and yet the pressure on funding makes that harder than ever. More children are being diagnosed with behavioural issues, but there is no funding for teaching assistants or specialised teaching aids.
It is important that classroom assistants are in place. How do we expect teachers to deal with difficult children if they are not given support? The only reason why the number of exclusions is so low is that we have teachers who genuinely care, many of whom put their own mental health, physical health and wellbeing last in their list of priorities, in order to help children. We cannot pay for compassion, but we can support people in their quest to be compassionate; that applies to teachers.
Primary schools in Northern Ireland are carrying out programmes designed to help children learn breathing and calming techniques, starting with five-year-old children in P1. As the hon. Member for Croydon Central mentioned, they are an attempt to instil a coping mechanism in children, so they can process their feelings. I ask the Minister: are there similar projects and schemes here in the mainland? If not, I believe there should be. The thought process is that the earlier this is done, the better, simply to help deal with issues in later life.
Another new programme is called the nurture programme. The Department for Education funds 31 nurture groups. Each group has received some £70,000 per year for running costs over the last five years. Funding of £80,000 per year has also been allocated to the education authority to provide support for these groups. Has there been an option to provide the nurture programme here in the mainland? The funding does not come close to providing for all needs. Given that schools ask parents for additional funding, over and above their school fees for arts and crafts, it is clear that not many have the ability to pay for specialised behavioural intervention at an early stage, which could be when it is most useful. That needs to be addressed.
To tackle exclusions, we must provide teaching support at all levels. There should be someone available to work with each child who is frustrated because they do not understand or have not yet grasped an idea. Support must not be targeted after a child has managed to work their way through the behavioural process, but at the very start of life in primary school—at the very beginning.
There is a Biblical saying that people reap what they sow. I believe that if we sow support and worth into children, they will grow and we, as a society, will reap the harvest of young adults able to deal with the pressures of life, thanks to a little support, feeling and help that shows they are worthy of attention.
It is a pleasure to have you in the Chair, Mr Bone, and I appreciate your calling me in this debate.
In March 2018, while having an unexpected and, as it turned out, well-timed break from Parliament, I was asked by the then Secretary of State for Education to undertake an independent review of school exclusion, to explore how headteachers use exclusion in practice and why some groups of pupils are more likely to be excluded than others. The review was published on 7 May 2019, a little over nine months ago. I will not repeat everything it contains—it is available in the House Library for all to see—but I will take the opportunity left in today’s debate to consider what progress has been made since its publication.
It is worth reminding ourselves that, despite the increase in recent years, permanent exclusion remains a relatively rare event. Just 0.1% of the 8 million children in schools in England were permanently excluded in 2016-17; that still means that an average of 40 children every day are permanently excluded, with an average of a further 2,000 pupils each day excluded for a fixed period. As we have heard, permanently excluding a child should always be a last resort, when nothing else will do. I agree with my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) that it is right that headteachers maintain an unfettered discretion to remove children, as long as exclusion from school does not mean exclusion from education.
My review reinforced the need for headteachers to have exclusion available as an important tool that forms part of an effective approach to behaviour management. However, it also found that the variation in how exclusion is used goes beyond the influence of local context and that more can be done to ensure that exclusion is always used consistently, fairly and legally. That is important because outcomes for excluded children are often poor—in some circumstances, as we have heard, they can be catastrophic.
Exclusion should, and often does, help break a negative cycle of behaviour, better protect all children involved and lead to an enhanced prospect of educational and personal success and fulfilment. It should not be a trigger or contributor to a worsening trajectory of academic attainment, to the risk of becoming a victim or perpetrator of crime or to prospects of employment rather than prison.
We know from the analysis in my review that there are characteristics closely associated with exclusion: for example, children with special educational needs and those receiving support from social care. Indeed, the analysis showed that 78% of permanent exclusions were issued to pupils who either had SEN, were classified as “in need” or were eligible for free school meals. A large part of the solution must be to better identify, at an earlier stage, those children at risk of entering a revolving door of exclusions, so we can reduce avoidable and unnecessary use of such a sanction. I know that is what headteachers want, too.
That is why I recommended, and the Government endorsed, a practice improvement fund of sufficient value, longevity and reach to support local authorities and mainstream, special and alternative provision schools to work together to establish systems that identify children in need of support and deliver good, effective interventions for them. Such a system would better utilise the expertise and professionalism within alternative provision.
The Conservative party manifesto contained a welcome commitment to an alternative provision reform programme. With that in mind, I ask the Minister to think not just about the capital investment required to improve pupil referral units, which hon. Members have referred to, but about the workforce development required to ensure that the best and brightest are working in alternative provision. That expertise and specialism needs to be integrated into mainstream schools. The charity The Difference, referred to earlier, is undertaking such work; Kiran Gill and her team are already starting to have a strong impact.
I do not have time to go into detail on a number of issues, but I want to flag them with the Minister. They include fixed-term exclusions, the commitment to reduce the upper 45-day limit—the equivalent of a whole term—for which a child can be out of school and the pernicious practice off-rolling, which is illegal and on which Ofsted has borne down. It will be interesting to hear what further work will be done to make sure that it forms no part of our school system. There are also issues around managed moves—voluntary agreements between schools—that mean that a lot of children move around our school system, sometimes undetected; statutory guidance was recommended by my report.
I will briefly touch on the responsibility and accountability of schools. The oral statement made by the previous Secretary of State made it clear that the Government were going to fulfil that recommendation. Lord Nash, the then Lords Minister, was clear that he supported it, although more recently I noticed that Lord Agnew was talking about involving multi-academy trusts in providing alternative provision. It would be good to understand the current thinking on how we make schools better accountable for pupils who are excluded.
Part-academisation causes a problem for some of the recommendations made in my report when it comes to trying to define the role of local authorities. In hindsight, it would have been better, either by evolution or revolution, for us to have completed the academisation of the school system or decided that local authorities had a clear role within it. I tried to define that by saying that local authorities should be responsible for vulnerable children, such as children in care or children with special educational needs. That system could hold true in the future and help ensure that there is co-ordinated action around children at risk of exclusion.
I ask the Minister: when will work on the accountability of excluded children be stepped up and shared outside the Department for Education? When is the consultation on reducing the upper limit of fixed-term exclusions going to happen? How are the Government going to continue to tackle and bear down on off-rolling? How will the Minister help truly integrate alternative provision into the mainstream, so it acts as much as a preventer of exclusions as a recipient?
I know that the Minister is very committed to the programme. To that end, and now that I have been given a more lengthy opportunity to make myself useful on the Back Benches, I tentatively suggest to him that one way to achieve that, for our mutual benefit, would be to re-engage my services with the clear and specific purpose of helping to implement the review’s recommendations by way of a small delivery body. As I said, I know he is keen to make significant progress on this aspect of school life. It goes to the very heart of the Prime Minister’s welcome mission to spread opportunity across our country, with education a vital ingredient for achieving that.
It is a pleasure to serve under you, Mr Bone, and to follow the hon. Member for Eddisbury (Edward Timpson), who is a fellow Manchester City fan. I am sure that he will be on the edge of his seat tonight for the quarter final of the European cup. Governments should walk the walk, not just talk the talk, and that was a clear offer to the Minister to begin implementing the Timpson review proposals on this subject.
I congratulate my hon. Friend the Member for Croydon Central (Sarah Jones) on securing the debate, her work as chair of the all-party parliamentary group on knife crime, and her powerful testimony about the five-year-old who was excluded. I also congratulate my hon. Friend the Member for West Ham (Ms Brown) on her work with mothers in Newham and my hon. Friend the Member for Battersea (Marsha De Cordova), who spoke about Jacob in particular. These are real human stories of lives that are affected day in, day out.
Our children must have access to high-quality full-time education. The vast majority of our schools want the best for their pupils. A small minority engage in poor practice in excluding and off-rolling. As we have heard, for the children such practices have a devastating, lifelong impact on their chances. I had to question my researcher yesterday when he pulled out the following statistic, and I publicly apologise to him. The Education Policy Institute found that there were 69,000 unexplained pupil exits from school in 2017 alone. When he put that fact in front of me, I had had to pull him up and say, “Are you sure?” That is nearly one in 10 of the school population. What is going on, Minister? The number has risen by 12% between 2014 and 2017.
We have a duty to protect and nurture the most vulnerable children in society, but under this Government’s regime vulnerable children, who are already at an increased risk of low educational outcomes, are systematically over-represented among those experiencing unexplained exits from school. My hon. Friend the Member for Battersea pointed out that among black and ethnic minority children the rate of exclusion is 40 times greater. The Government need to recognise the complex causes of difficult behaviour in their policies and guidance.
Schools should be supported to focus on prevention and early intervention. The hon. Member for Strangford (Jim Shannon) talked about the importance of teacher support. As a result of the culture that has been created and the huge funding cuts imposed, schools often struggle to focus enough resources on wrap-around care for vulnerable students, clearly resulting in an increase in exclusions. If we are to begin to address the school exclusion crisis, the Government must first reverse school cuts, which they are not doing.
The Government must also overhaul the assessment system. As the hon. Member for Eddisbury said, schools must use the exclusion mechanism consistently. The report of the APPG on knife crime, the EPI report, and my party’s manifesto all recommended that schools remain responsible for the pupils they off-roll. Schools must be accountable for the welfare and education outcomes of all pupils who attend, so that no children are lost to the system.
Schools must play an important part in turning around the growing number of exclusions, but the issue goes much wider, and cannot be solved by schools alone. Cuts in funding for local authority support, which has been mentioned, and for child mental health services are affecting the ability to support the children who are most in need. As Members of Parliament, our Friday constituency surgeries are now rammed with parents whose children are suffering in school and cannot access mental health support services. I do not think that any MP could deny that they are seeing an increase in their case load in this area. I hope that the Minister will come away from this informed and constructive debate, reprioritise, and commit to reducing the number of school exclusions in our system.
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the hon. Member for Croydon Central (Sarah Jones) on securing the debate. In her excellent opening speech, she rightly said that we all agree on one thing—that every child in this country should have the benefit of a world-class education that prepares them for adult life and helps them to fulfil their potential, including children who have been excluded at some point during their school career.
The Government are committed to ensuring that all teachers are equipped to tackle the low-level disruption and the serious behavioural issues that compromise the safety and wellbeing of pupils and school staff. Ensuring that schools are safe and disciplined environments benefits all students. In 2018, the Department for Education’s school snapshot survey of teacher opinion found that 76% felt that behaviour was good or very good in their school. According to recent data from Ofsted, behaviour is good or outstanding in 85% of primary and 68% of secondary schools. Although behaviour in schools is broadly good, those figures show that there is still more to do to tackle the casual disruption that deprives children of up to 38 school days a year, according to Ofsted’s estimates, as well as the challenging behaviour that can result in permanent exclusion. Behaviour cultures are set from the top, and the Government are determined to support headteachers to build and maintain a culture of good behaviour in their schools. For example, we are investing £10 million in behaviour hubs, so that schools with a track record of effectively managing pupils’ behaviour can share that best practice with other schools. That programme will launch in September 2020 under the supervision of a team of expert advisors on behaviour management led by Tom Bennett.
Alongside that, we are reforming teacher training as part of the early career framework, and we have bolstered the behaviour management element in the core content for initial teacher training, so that all new teachers will be taught how to manage behaviour effectively on entry to the profession.
On teaching training, one of my recommendations was about trauma and attachment training, and really getting under the skin of why some children are struggling to meet the behaviour standards that we expect of all pupils within our schools. Will the Minister recommit to that recommendation, and explain how he intends to move it forward?
I will come to headteachers having to take into account the circumstances of pupils before they make a decision about exclusions, and to ensure that support is available for children who have special educational needs. I point out to Opposition Members that for the coming financial year we have increased spending on high needs education by 12%—an extra £780 million—which demonstrates our commitment to ensuring that special needs education is properly funded.
Visiting outstanding schools has shown me that a strong behaviour culture can help children who might otherwise struggle to engage in their education to succeed. Michaela Community School, a free school in Wembley to which my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) referred, is unapologetically strict in its standards of behaviour. The whole institution emits a sense of positivity and purpose quite unlike any other school that I have visited. In an area of significant deprivation, children are brimming with pride at the progress they are making.
At Reach Academy Feltham, behaviour is tracked on a transparent points-based system called “Payslip”, which gives rewards and privileges for good behaviour and deducts points for disruption. The school has a notably low number of fixed-term exclusions, and has not excluded a pupil permanently in the last two years.
The Minister is giving some good examples of individual schools, but does he accept our fundamental premise that the 70% increase in school exclusions, and some of the societal indicators of whether someone is more likely to be excluded, are really significant and need to be considered at national level, not just at the level of individual schools?
If the hon. Lady will forgive me, I will come to exclusions in just a moment. However, as my hon. Friend the Member for Eddisbury (Edward Timpson) pointed out, permanent exclusions are at 0.1% of pupil attendance in our school system.
The approach at Reach Academy Feltham indicates that when children know what is expected of them and how poor behaviour will be dealt with, they are less likely to display the persistent disruptive behaviour that is still the most common cause of exclusion. As my hon. Friend the Member reiterated, exclusion is an essential tool for headteachers to use when a pupil oversteps the bounds of what is acceptable in a school, either because of one serious incident or through persistent disruption. This Government therefore back, and will always back, headteachers who use exclusion to ensure they have good discipline in their schools, including permanent exclusion where it is used as a last resort. As my hon. Friend the Member for Stoke-on-Trent North said, speaking from his eight years of experience as a secondary school teacher, it is important to protect all pupils and their teachers from disruptive or violent behaviour in schools. He is right: all teachers have the right to teach and all children have the right to be taught in a safe and disciplined environment, without danger, intimidation or distraction.
It is important to put this debate on exclusion rates into perspective. As I said in response to the intervention by the hon. Member for Croydon Central, the rate of permanent exclusions last year was 0.1%, and the longer-term trends show that the rate of permanent exclusions across all state primary, secondary and special schools has followed a downward trend. In 2006-07, the rate was 0.12%; by 2012-13, it had fallen to 0.06%. That rate has since risen, but it is still lower now than in 2006-07. That is because, as set out in the DFE’s exclusions guidance, we expect all schools to
“consider what extra support might be needed to identify and address the needs of pupils”
from groups more likely to be excluded
“in order to reduce their risk of exclusion.”
In 1997, the Labour Government inherited record numbers of permanent exclusions. The level in 1996-97 was about 12,000 a year, but by the time the Labour Government left office in 2010, exclusions had more than halved to 5,700, and crime fell over that same period. Does the Minister agree that where we have seen reductions in school exclusion, all kinds of other things follow? Where there have been increases in public spending in areas such as education, there have been reductions in school exclusion and in crime. Over the past 10 years, and over the past few years in particular, we have seen increases in violent crime and in school exclusion as funding for our public services has been reduced.
The hon. Lady raises an important point. Analysis has shown that excluded children have a higher risk of being a victim or perpetrator of crime, but although there is a strong correlation between those two issues, we have to be careful to not draw a simple causal link. The evidence does not suggest that exclusion causes children to be involved in crime; what it does suggest is that engagement in education is a strong protective factor for children who might otherwise be vulnerable to involvement in crime. It is therefore vital that schools and colleges enable all children to achieve, to belong, and to remain safe in education. That is the part played by the Department for Education in a wider cross-Government approach to tackle crime and serious violence. We will continue to work closely with other Departments, including the Home Office, to ensure that young people remain safe.
As my hon. Friend the Member for Stoke-on-Trent North pointed out, the focus must be on attendance, which research suggests is associated with risky behaviour linked to serious youth violence. Ministry of Justice research on the educational background of young knife-possession offenders showed that 83% had been persistently absent in at least one of the previous five years; overall, school attendance has improved significantly since 2010. That is why we have put such an emphasis on ensuring that children attend school.
Headteachers are best placed to judge what extra support may be needed in their school. Ofsted’s new inspection framework continues to include consideration of the reasons for exclusions and their rates and patterns, as well as any differences between pupil groups, as referred to by my hon. Friend the Member for Eddisbury. Inspectors also consider evidence of off-rolling, and they are likely to judge a school to be inadequate if there is evidence that pupils have been removed from the school without a formal permanent exclusion, which my hon. Friend has also mentioned as a concern.
The Minister has referred to the role that headteachers play in deciding what support they need to make sure exclusions are as low as possible. I reiterate my comment about Northolt High School in my constituency, where the headteacher has applied through the Excluded Initiative for charitable funding to help with some of its inclusion work. If that school is unsuccessful in its bid, would the Minister agree to meet its excellent headteacher and others who may be unsuccessful in their bids to discuss what other funding might be found to support their plans?
I am happy to meet the headteacher in the hon. Gentleman’s constituency to discuss these issues; I always learn something in those meetings, and they can be extremely helpful. However, I point out that we are increasing high-needs funding by 12% and overall school funding by 5% this year alone, with a three-year settlement, and that school funding will rise to £52 billion by the end of that three-year settlement period.
Nothing I have said detracts from the fact that for the one child in 1,000 who is permanently excluded, their exclusion is a sign that something has gone seriously wrong. Without the right support, vulnerable children and young people can be left at risk of harm, including becoming involved in serious violence. We need to offer those children a fresh start—a school that can re-engage them with their education. For many excluded pupils, that will mean alternative provision. Good alternative provision offers excluded pupils a second chance to develop those core skills and readiness for adult life.
I will not, if the hon. Gentleman will forgive me. Although 85% of state-funded alternative provision across the country is rated good or outstanding —an increase, by the way, from 73% in 2013—it remains the case that in some areas, permanently excluded pupils are not able to secure good-quality AP quickly, increasing the risk of them becoming caught up in knife crime. The report on knife crime produced by the all-party parliamentary group chaired by the hon. Member for Croydon Central emphasised the importance of full-time education for all children, including those vulnerable to exclusion. The hon. Lady referred to the fall in the number of pupil referral units between 2014 and 2017. The facts are that in 2014, there were 371 PRUs and alternative provision academies; in 2017, there were 351; and as of June 2019, there were 354. Eight alternative provision academies are in the pipeline to open before 2023.
Our focus must be on improving the availability of good-quality AP, so that when a child is excluded from school, that does not mean exclusion from good-quality education. Those children must have timely access to the support and education they need to help reduce risk, promote resilience, and enable them to re-engage with education and make good progress. We know that is possible, because there is excellent and innovative practice out there.
One great example is the parent and carer curriculum taught at the Pears Family School in Islington, which is an AP free school that opened its doors in 2014 and was found to be outstanding three years later. What is unusual about that school is that parents attend with their children several times a week, and in those sessions parents help pupils to make progress with their reading and are taught how best to support their children in their education. As a result, a high proportion of pupils are successfully re-integrated into mainstream school after a short placement. That model is currently being trialled by the Pears Family School and the Anna Freud Centre in three other AP settings across England. That is just one of the nine projects supported by our £4 million AP innovation fund, which we established to test the effectiveness of innovative approaches to improving alternative provision, an approach that I know my hon. Friend the Member for Eddisbury supports.
I am grateful to the hon. Member for Croydon Central and to other hon. Members for having raised their concerns about this issue. I assure the hon. Lady and other Members that we take this issue very seriously and are addressing it, including by improving school behaviour and providing the right support to those at risk of exclusion.
I realise that we are about to finish, but I reiterate my offer to my right hon. Friend the Minister. He may need some time to consider the generosity of it, but in the meantime, would he agree to meet me to discuss the implementation of my review, and to write to me in advance of that meeting to answer the questions that I put?
I would be happy to meet my hon. Friend. He has raised the issue of accountability measures: expectations for pupils in AP have not been high enough in the past, and as part of our drive to improve quality across the AP sector, we will consider how we can better assess performance and strengthen accountability for pupils in AP. We will have more to say on that in due course.
Very quickly—gosh! I was hoping to read out a couple of quotes from the hundreds of people who sent in amazing responses, but I do not have time, which is a great shame. I will pass them all to the Minister, and will publish them in some way. Children are more likely to be excluded if they are poor, have a special need, live in a deprived area or are black, and they are then more likely to go into crime. I thank the Minister for his response, but—
Government Support for Business
I beg to move,
That this House has considered Government support for business.
It is a pleasure to hold this debate under your chairmanship, Mr Bone. I declare an interest as a former member of the boards of Sky and Just Eat. I also recently visited the US on an all-party parliamentary group visit in the company of British-based space businesses.
The timing of the debate is auspicious. It falls in the narrow window of time during which we will decide how to make our way in the world, liberated from the chains and anchors of a protectionist trading bloc that has often poorly served the entrepreneurial and fast-growing nature of the businesses with which the United Kingdom is blessed. The good ship GB is tugging at its moorings with upward buoyancy and a new captain, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, standing astride its helm. Like my hon. Friend the Minister for Business and Industry, who is in his place, the Secretary of State has personal roots that stretch beyond these shores into the overseas markets that represent an outsized opportunity to create growth and employment for generations to come.
To a degree, we have the wind at our backs. Our exports are growing. We are the world’s 10th largest exporter, despite not ranking in the top 20 most populous countries. Our economy has grown for nine straight years. We are Europe’s leading destination for foreign direct investment, attracting more capital than France and Germany put together. But we must not be blind to the challenges. We are approaching the end of a decade-long recovery cycle. Globally, protectionist forces are in the ascendancy. We must not repeat the mistakes of growth built on the shaky foundations of too much debt or imported cheap labour.
Our natural advantages as a location to start, grow and run a business are immense: we have a world-class legal system with a strong respect for the rule of law; we sit between the Asian and American time zones; we have a flexible and educated workforce; and, of course, English is our own, but increasingly the world’s, language. In fact, 20% of the world’s population of 1.2 billion people now speak English. There are more English speakers in China than people in England. English is the official language of the European Union, the United Nations, the African Union and the Association of Southeast Asian Nations. The world is pregnant with opportunity, so what support does business need from the Government?
In my experience, business needs the Government to do three things: to facilitate access to markets for our products and services; to remove points of friction and barriers to doing business; and to provide the right fiscal framework. I spoke recently in the global Britain debate—as did you, Mr Bone—on facilitating access to markets. I talked about the opportunity to help the 90% of British firms that do not export to do so through better market access, more boots on the ground and having more of Her Majesty’s trade commissioners, and by expanding the export credit guarantee scheme and getting the Foreign and Commonwealth Office and our aid policy to support British businesses.
Rather than revisit that point, I will turn to my second point about the important role that the Government can play in removing points of friction and knocking down barriers to doing business. The only way to truly level up the whole of the United Kingdom is with an enterprise-led renaissance. It is only business that will create the real jobs, opportunities and wealth that will make our future school and university leavers look askance at the idea of ever leaving our great northern cities to move south. Investment in infrastructure can provide the connective tissue, but it is business that fires the neurons between the nodes and provides a two-way flow of activity, motion, growth and employment.
There is no more productive and supportive infrastructure for small businesses than making gigabit broadband a reality by 2025, so I welcome the former Chancellor’s commitment of £5 billion for that purpose. We must rapidly turn plans into action and promises into reality. There is no time to waste, with just under 50 months to go and a huge amount of planning, procurement, construction and connection to be done. I strongly welcome the decision by West Sussex County Council last week to commit funding to projects under its full fibre programme and to shift that to the next phase of delivery for businesses across West Sussex.
My hon. Friend the Minister shares my enthusiasm for reducing the burden of regulation on small business. I do not know how familiar he is with the Better Regulation Executive within his Department, but this is the perfect time to give that initiative a much-needed boost. In a measure that is bound to prove popular with its members, he should send it on a round-the-world fact-finding trip to see the excellent work that is being done in New Zealand, Australia, the US, Singapore and, although it pains me to say it, France.
I congratulate the Minister on his new business support campaign to bring all the support together in one place at businesssupport.gov.uk, which is just the sort of practical measure that business needs. I encourage the Government to go further and to look again at a merger between Her Majesty’s Revenue and Customs and Companies House to give business a single online identity and a true one-stop shop.
There is also room for a modern industrial policy that is as much about knocking down barriers to scaling fast as it is about picking winners. It should focus on a small set of opportunities, each capable of spawning multibillion-pound industries, and making sure that when we get behind something, we align everyone behind it, from No. 10 down.
I commend the support that the Minister’s Department is already giving to genomics, artificial intelligence, space, fusion, zero-emission mobility and quantum computing. With the National Physical Laboratory, the Stevenage Bioscience Catalyst, the Faraday Institution and the Culham Centre for Fusion Energy, it is no exaggeration to say that the UK is genuinely world-leading in each of those areas. UK-based companies are at the heart of the technology that the Solar Orbiter satellite probe, which blasted off into space last month, will carry all the way to the sun. When quantum physicists the world over want lasers with the purest light, they come here.
But others are catching up fast. It is equally true to say that the next 24 months are critical and will determine whether we succeed or the opportunity is lost to us forever. As the UK is such an attractive place to do business, we should be competitive, but have the self-confidence not to compete on always having the lowest rate of tax. As those of us who have lived the reality of business know, the burden of tax is about much more than the rate; it is about complexity, certainty and the approach to compliance.
There is an opportunity to unleash further potential from Britain’s businesses. The World Bank ranks us eighth in the world for ease of doing business, but only 27th for ease of paying taxes. How have we managed to create, but not to have solved, such complexity? To simplify it, we should tax an enterprise’s profits, not its inputs. To use a baking metaphor, we should tax the cake, not the raisins, flour and eggs.
There is an increasing recognition across the House that the current structure of business rates is a burden, particularly for small enterprises. It taxes businesses before they have had a chance to make their first pound of turnover, and penalises those that remain anchored in their local communities, such as on high streets in the small market towns of Arundel, Hurstpierpoint, Storrington and Petworth in my constituency. That has rightly been recognised by a series of reliefs for the smallest and other particular types of business, but I welcome the commitment to a fundamental review. I encourage the Minister to be a radical and uninhibited voice for business in that review, as I shall be. It is my belief that in the 21st century huge benefits would flow from unifying the income tax and national insurance regimes and from clarifying once and for all the ambiguities that lie around employment status. Perhaps the Minister will raise that with the Chancellor as well.
This is a critical subject at a critical time. We may never have such a window of opportunity again. The business leaders and entrepreneurs to whom I speak every day have placed their trust in us. We could be at the start of a new renaissance of British businesses seizing and leading in all the sectors that will define the economy in the 21st century; of knocking down barriers to enterprise and inspiring a new generation of entrepreneurs in every corner of the country and from every country of the globe to base themselves here; of rekindling the swashbuckling spirit and appetite for risk that saw our ancestors sail over the edge of the oceans in pursuit of profits from new markets. Or we could fail. We could be too timid in our ambition, too encumbered in our thinking and too slow to seize the opportunity. We must be the change we wish to see. Now is the time. The opportunities are tantalising and tangible, and they could be ours for the taking.
The high street is a passion of mine, given that I worked in retail in my home of North Norfolk before becoming an MP, and the high street is dying at an alarming rate. That is not new, but the decline is continuing year after year, and I see little in the way of a long-term strategy to deal with it. Although I welcome the changes to business rates and the Government’s £3.6 billion towns fund, I do not feel, sadly, that that is the finished answer. It is a temporary sticking plaster, when major structural change and reform is urgently required.
What we are seeing is a fundamental technological shift that has enabled shopping habits to alter through technology. I am not one to stand in the way, but I feel that the Government need to intervene to level up what has now become a completely unfair playing field. Bricks-and-mortar stores are seeing costs rising at an exponentially high rate, through wages, rent, pensions and energy, while their frontline sales growth continues to contract. By contrast, the internet giants buy in enormous bulk, lowering costs, and they do not have the same cost base as companies in what we term A1 retail space.
The high street not only employs millions of people; it also contributes major social and economic value to the country. Boarded up, vacant towns will have a major impact on our health and wellbeing. We should think of the isolation and loneliness that people suffer if they cannot go out to the shops and add that social value to their lives.
Internet sales over the years have rocketed, from around 5% when the data was first collected to around 20% of all retail sales now. That is an alarming rate of growth. Last July the proportion of all shops on the high street that were empty reached 10.3%, the highest level since January 2015, also relatively recent.
Every year we see major chains being lost. House of Fraser, for instance, was narrowly saved. Many go bust, and if they do not, the restructuring deals mean that hundreds of shops are closed instead. We witness thousands of job losses each year, particularly after Christmas, which is a crucial period for many retailers, which either sink or swim after that.
When an industry leader such as John Lewis, which is seen as the bellwether for the high street, is struggling and announcing further potential job losses, we have to recognise that structural change is required. John Lewis has the luxury of Waitrose, and cash from the supermarket division enables it to reinvest in the department stores. Most businesses on the high street do not have that. When John Lewis is struggling, we have to recognise how hard it must be.
All the indications are that footfall is continuing to decline on the high street, potentially at around 2% every single year. That is pretty depressing news. There is a declining customer base and shifting consumer habits; we have all witnessed that managed decline in our lifetimes. We must act now with some kind of intervention to change the playing field before we see communities and high streets really lost, and enormous unemployment off the back of that loss.
What are the suggestions for change? For starters, we need to consider some kind of internet sales tax, specifically on online shopping. Great Britain is renowned for its backbone of small shopkeepers. Some kind of online tax would give high street retailers, whose overheads are high and who employ local people, a better chance of being able to survive. Similarly, some kind of higher rate VAT-style tax should be considered. If we do nothing, the trends that are already happening in front of our eyes will continue. In a time when the Treasury is looking for ways to generate income, why not consider such changes? They are staring us in the face.
We absolutely must tax the internet giants that are contributing to the demise of our towns and cities by not paying their fair share of tax. Only when we do that, as my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) has said, can we start to support the business rates reductions that we hugely welcome.
People say to me, “Why should the Government intervene? It is not their job to interfere in industry change; it is an evolution that we are seeing led by technology.” There is a reasonably simple answer to that: we have done it before. For instance, we have subsidised agriculture for many years, even though the payments system is now being altered. We now have a chance to put some kind of support mechanism in place while retail adjusts.
We are partly to blame for the situation, because we have not sorted out some of the hopelessly lax planning decisions and policies that we have had over the years. Unfair competition from out-of-town stores has created a further threat to our beleaguered traditional town centres. Had previous Governments applied a policy for every supermarket to be restricted to the sale of food items, our high streets would have had a remaining viable use. Furthermore, the modern practice of supermarkets developing instore bakeries, fish counters, butchery departments and so on has led, through that competition, to many smaller businesses on the high street disappearing, almost on a weekly basis—particularly greengrocers. Stringent planning policies must be put in place to curtail some of the supermarket growth that has led to the demise.
The decline of our high streets is a complex problem with a vast array of contributory factors, but the rise of the internet is at the very crux of it. We have to start tackling the problem now. To use our favourite term of the moment, we need to do some levelling-up of our beleaguered high streets.
It is an absolute pleasure to serve under your chairmanship, Mr Bone. I thank my hon. Friends the Members for Arundel and South Downs (Andrew Griffith) and for North Norfolk (Duncan Baker). The quality of Conservative Back-Bench Members is clearly incredibly high. If the subs bench is of this quality, it keeps Ministers on their toes to keep performing. That is one great outcome of the general election where the Prime Minister Boris Johnson led us to that wonderful victory.
I congratulate my hon. Friend the Member for Arundel and South Downs on securing this debate. I assure the House that the Government are committed to supporting business. Of course, seizing opportunities now that we have left the EU is absolutely crucial to that. As my hon. Friend rightly pointed out, we will soon have a new relationship with our European friends, inspired by our shared history and values. We will have recovered our economic and political independence, which will enable us to control our own laws and of course our own trade—that is clearly what he is so passionate about. We will be able to strike new trade deals with partners around the world, helping our small and large businesses to export and grow on the global stage.
Hon. Members do not need to take my word for it, or that of my hon. Friend. The Global Entrepreneurship and Development Institute ranks the UK as the second most entrepreneurial economy in Europe and the fourth most entrepreneurial in the world. We rank higher than all other G7 countries except Canada on the World Bank’s “starting a business” list, although I take on board my hon. Friend’s comments about the ease of taxation, where we do less well. As someone who has started and run my own business, I can say that the UK is a great place to do so.
As my hon. Friend points out, we should remove friction and barriers to doing business and support our companies and entrepreneurs to succeed. That is why no permission is required to establish a business in the United Kingdom, there are no minimum capital requirements, and new companies can be registered online within just 24 hours for as little as £12. That is why, as my hon. Friend mentioned, only last week we launched a new website, businesssupport.gov.uk, which brings together information, support and advice for small businesses. It is why programmes operated by the Government-owned British Business Bank are supporting firms with finance. As of December 2019, more than £7 billion has been delivered to support over 91,000 small businesses in the UK, including £730,000 to 76 entrepreneurs in my hon. Friend’s constituency. Given his energy and how assiduous he is, I am sure he will endeavour to meet each and every one of the 76 beneficiaries of that support.
We are working together across Government to create smoother processes and the best environments for business, and I am pleased to say that we have already gone a long way towards integrating the customer interface with Companies House and HMRC. The streamlined company registration service was launched in 2018; it allows new companies to incorporate and to register for PAYE and corporation tax through a single portal. As my hon. Friend rightly reminded us, there is undoubtedly more work to be done to reduce the burden of tax, but HMRC is making progress, including through establishing a new VAT registration service.
We have also committed to a fundamental review of the business rates system. My hon. Friend the Member for North Norfolk quite rightly highlighted this issue, and challenge is important in this area. He is right to say that we need a holistic approach. The Treasury will provide more details about the business rates review in due course, but we have already provided reforms and reliefs to business rates worth £13 billion over the next five years. The Prime Minister has announced a towns fund of over £3.5 billion, including an accelerated £1 billion to support local areas in England to renew and reshape town centres and high streets. Through the taskforce giving expert advice on how to adapt and thrive, we are supporting local leaders and encouraging them to think differently about their high streets and to discover their unique selling points.
May I contrast the Minister’s comprehensive programme of activity that is designed to improve the lot of small businesses in this country with the paucity of attendance on the Opposition Benches? Not a single member of any of the Opposition parties has deigned to grace us with their presence this morning.
It is a shame and disappointing not to see any representation.
As part of my personal mission to improve the business environment, I am working across Government, including with the Department of Health and Social Care, on life sciences, which my hon. Friend described as one of the real future growth areas for jobs in our country, supporting collaboration across industry, Government and the NHS. With the Ministry of Housing, Communities and Local Government, we are developing plans to level up the regions across our great nation, with business and the economy at the heart of our plans.
My hon. Friend made an astute point about the importance of regulation and broadband access to business. Our pioneering regulatory regime has made the UK the go-to location for science, research and innovation for decades, and we are absolutely committed to learning from international best practice. The Better Regulation Executive has recently invited the OECD to undertake a review of our international regulatory co-operation, which will be published soon, but my hon. Friend makes a good point about getting them on an aeroplane to visit places such as Singapore or, dare I say, just across the channel in France. We are also committed to delivering nationwide coverage of gigabit-capable networks as soon as possible. The Prime Minister made that promise during the election and it was delivered as soon as he was returned to office, with £5 billion of public funding to close the digital divide and ensure that rural areas such as my constituency of Stratford-on-Avon and that of my hon. Friend the Member for Arundel and South Downs are not left behind.
As well as ensuring businesses across the country have the conditions they need to thrive, we are supporting sectors to ensure UK leadership in the industries of the future—as my hon. Friend points out, they are critical. Our study into tech competitiveness is due to report to Ministers this spring. We are supporting quantum with initiatives such as the quantum technologies challenge, providing up to £153 million of innovation funding for industry-led activities. The UK National Quantum Technologies Programme is set to invest over £1 billion of public and private investment over its lifetime.
We are also supporting life sciences, making a huge difference to people’s lives and to the NHS and how it delivers for people. Life sciences is an area of UK excellence and personal passion for me, with almost 6,000 businesses, 250,000 people employed and annual turnover of £74 billion. The Government have invested around £1 billion in a host of ambitious life sciences initiatives, with around a further £3 billion pledged by industry, including through our life sciences sector deal, which is part of the industrial strategy. That is one of 11 deals to drive productivity, innovation and growth across 10 sectors in the UK, from artificial intelligence to offshore wind, including a combined investment of £3 billion. Today we account for 36% of all offshore wind production on this planet, and we plan to go even further. That is this Government’s ambition, and that is what we will do.
My hon. Friend the Member for North Norfolk spoke about the high street. We are committed to conducting the review that I talked about earlier, but the reforms have already delivered the £13 billion that I mentioned. Although I will not deny that there are still challenges ahead for the high street and for small businesses, there are also fantastic opportunities. We talked about the towns fund, but local leaders need to be innovative. I see that in some local authorities that are returning people to live on our high streets. For far too long, retailers took on leases on our high street but left the upper parts vacant. We need to do much more to encourage people to live and work on our high streets in order to revive them; if people are living there, they will shop there and do many other things. I see it in my high street in Stratford-on-Avon, where we are beginning to think innovatively about how we deliver that—for example, with Shakespeare’s school, the King Edward VI School, where the great bard studied and learnt his craft. We have been looking at how we bring international students into some of the vacant properties to study over longer periods in the summer. Again, that would help the high street to deliver.
I thank my hon. Friend the Member for Arundel and South Downs for securing the debate, and I wish we had a lot longer to debate this issue. We need to ensure that—across our country, whether it is the Scottish Government or our Labour Opposition—we take business seriously. Ultimately, it is the lifeblood of the British economy.
Question put and agreed to.
Energy Efficiency Measures: Net Zero Buildings
[Mark Pritchard in the Chair]
I beg to move,
That this House has considered energy efficiency measures in buildings to achieve net zero.
I am very pleased—I would almost go so far as to say that it is serendipitous—that for the second time in succession you, my constituency neighbour, are chairing a Westminster Hall debate, Mr Pritchard. I hope that you and other hon. Members will find the subject relevant. It is an important debate for colleagues on both sides of the House who share my enthusiasm for exploring a variety of routes to reach net zero emissions as soon as possible—certainly by 2050. One is the groundbreaking Environment Bill, on which I had hoped to contribute in the Chamber. Several colleagues who would like to join this debate are in the main Chamber. Should some of them succeed in arriving before I sit down, I hope you will be liberal in your interpretation of the rules, Mr Pritchard, and allow them to chip in should they wish to catch your eye.
Another important feature of today is that it is the first day of Lent. I am joining colleagues here and individuals from around the country in making five green pledges for Lent: to cut down food waste, to use less single-use plastic, to make more zero-carbon journeys, to buy less new and so support local charity shops and the excellent repair hub in Ludlow, which is open on alternate Saturdays, and and to litter-pick. I urge the Minister to join me in following one or more of those pledges if he is observing Lent.
Yet another important feature of today is this debate, in which we highlight the vital need to reduce fossil fuel use in heating the buildings in which we live and work if we are to achieve net-zero Britain. I declare my interest as a property owner, and I refer to my entry in the Register of Members’ Financial Interests. The debate is timely, as last month the consultation on minimum energy efficiency standards in the non-domestic private rental sector concluded, and earlier this month the future homes standard consultation ended. Given that the Budget is confirmed for next month and the comprehensive spending review is to take place later this year, this is the ideal time for the Government to set out their ambition to show global leadership in improving the energy efficiency of buildings in this country ahead of COP 26 in November.
I congratulate the right hon. Gentleman on securing this important debate. One important measure that we will need to adopt, including in Greater Manchester, is retrofitting our much older housing stock. That obviously costs money—he is right to allude to the opportunity that the Budget presents to discuss that need—but it also requires people with skills to undertake the retrofitting work. Does he agree that the Government’s new points-based immigration system causes concern about the construction sector’s ability to meet the needs of a very extensive retrofitting programme in Greater Manchester?
I absolutely agree that retrofitting existing housing stock is one of the biggest challenges we face in trying to reduce fossil fuel use in our buildings. Much of my speech relates to that, so I will go on to talk about it. I will not talk about immigration status, but the hon. Lady makes an important point when she says that we need sufficient skilled people to do the work right across the Government’s infrastructure programme. It does not apply exclusively to retrofitting homes, although that forms part of it. If the skilled tradesfolk I know in my constituency are anything to go by, most earn considerably in excess of the Government’s threshold requirements, so skilled tradespeople may well still be able to come here as they meet the requirements of the points system.
I am pleased that there has been some progress in building more efficient homes over the past 30 years. Overall emissions from homes have been reduced by about one fifth since 1990, despite the fact that there are approximately one quarter more homes now. That is ostensibly due to policies to improve boiler efficiency and basic insulation in the early 2000s, but progress seems to have stalled in recent years. Now is the time for this energetic and committed Minister, whom I am absolutely delighted to see retaining this brief, to make his mark by re-energising energy efficiency across the built environment in Britain.
I am glad that the right hon. Gentleman has mentioned the Minister’s energy and enthusiasm, because I want to ask about energy efficiency in social housing. I am sure he is aware that measures such as insulation, window glazing and low-carbon heating can be installed very easily and cheaply in larger buildings. There are some very good examples of local authorities building low-carbon social housing and slashing energy bills for tenants. In my constituency, Camden Council has been reducing carbon emissions in its housing stock, and it has used refurbishments such as Swiss Cottage library to make big energy savings and install solar panels. Does the right hon. Gentleman think it should be down to cash-strapped councils to carry out those innovations, or should the Minister and the Government be playing more of a part in investing properly in energy-efficient social housing?
I am glad that the hon. Lady has raised social housing, because I will touch on that in my remarks. I am sure the Minister will respond to that point, because there was a clear commitment in the manifesto on which we were just elected to provide funding for energy efficiency measures specifically in social and affordable housing. I think she will get some good news from the Minister when he responds to the debate.
What is the scale of the challenge? The built environment accounts for nearly 40% of national energy use and approximately one third of UK emissions, but progress in the decarbonisation of buildings has been limited. Enhancing the energy efficiency of the UK’s housing stock is therefore one of the critical steps in achieving our net zero target.
The future homes standard is focused on new builds. The Government have called on the industry to deliver a further 1 million new homes over the course of this Parliament, with a more ambitious target of achieving 300,000 new additions each year by the mid-2020s, so getting the regulations right will have a significant impact on the carbon footprint of millions of future homes. That is good news for the environment as we move to net zero, and for people who are fortunate enough to live in the more fuel-efficient buildings of the future. The homes we are building in this and subsequent Parliaments should last more than 100 years—way beyond the 2050 target date for net zero. We must ensure that the standard of homes being built now contributes to meeting that target. It would clearly be perverse and extremely costly to build homes now that require retrofitting to reduce emissions at a later stage. There should be plenty of opportunities from technical innovation in new build standards to incorporate in the future homes standard. I have no doubt that the Government, in their response to the consultation, will seek to address the challenges we face in ensuring homes become more energy efficient and encouraging new technology and innovation in house building. I would like to see them include the notion of embedded efficiency in the materials used for construction, and not just focus on the future annual running costs.
I have concerns about some elements of the proposals that were consulted on. There is, for example, the suggestion that the fabric energy efficiency standard will be removed, which would make it possible to build less energy-efficient properties and still get them to pass building regulations by fitting larger renewable energy systems; as a result, properties would become more expensive to heat, which could increase fuel poverty. Taken over a large enough area, additional renewable energy capacity might be needed away from the new housing, bringing additional cost. I hope the Minister will reflect on that.
The proposals explicitly remove local authorities’ right to set higher than minimum energy efficiency standards, as higher standards are likely to increase costs for home builders. That would restrict their ability to set their own ambitious targets to tackle climate change, with homes that are sustainable for the future, and remove the incentive for home builders to innovate and become market leaders in energy efficiency.
My right hon. Friend is absolutely right. East Suffolk Council has ambitious plans to impose higher energy efficiency standards on new build properties and would be disappointed by what it would see as a retrograde move in favour of developers, which already make large profits, by letting them off the hook on reducing carbon emissions.
I am grateful for that example. The Minister should be willing to show some flexibility and consider the councils that want to make progress, because it could have an impact on builders’ inclination to develop to a higher standard within a particular area. In my view, these matters should be determined by self-regulating local authorities.
There are ambitious councils, but is the right hon. Gentleman not concerned that, were regulations determined by councils, developers would be drawn to the councils that do not impose higher standards, where their profit margin would potentially be higher?
That has happened where different rates of affordable housing were implemented by councils across England—in Scotland too, I suspect—and developers were drawn to the areas with the lowest standards. I am sure that the Government, in response to the future homes standard consultation, will seek to raise standards across the board, but say that if any local authorities wish to go further and faster, that will be up to them. That is a risk that we should be able to take.
The Government can assess in detail examples of how we can achieve more effective building techniques and of the associated costs versus the energy efficiency savings. One example from my constituency is in the town of Much Wenlock. The social housing provider Connexus— it is well known to you, Mr Pritchard—built a housing project there two years ago to a passive house standard, which through designer materials manages heat loss and airflow. Thanks to that efficiency, the residents save an average of £665 a year in reduced fuel bills and energy use has fallen dramatically, to the point that many tenants say that they barely need to turn on their heating. However, construction of the project carried additional costs. Connexus estimates that it cost 29% extra to build to a passive house standard compared with standard building regulations. The Government could step in to provide further support mechanisms to social housing groups and local authorities to deliver a very high standard of energy efficiency. It will be interesting to see whether the response to the future homes standard addresses that.
I will focus on the scale of the challenge of making existing housing stock more energy efficient, which, as I mentioned in response to the hon. Member for Stretford and Urmston (Kate Green), will by definition require the retrofitting of a huge number of properties. Some 29 million homes in the UK account for 20% of UK emissions. According to the Government’s live tables, of those homes, only 20 million have energy performance certificate ratings. The remaining 9 million homes are presumably owner-occupied and have not yet been required to undertake an EPC rating assessment.
Of the 20 million homes with an EPC rating, more are rated D than A, B and C combined. In total, almost 12.5 million dwellings are rated at bands D to G, compared with just 7.5 million rated A, B or C. That equates to 1.7 billion square metres of space that needs to be heated or cooled, which gives some indication of the scale of the challenge for the construction trade. In addition, non-domestic floor space energy performance certificates cover a further 688 million square metres in 935,000 properties that are used as non-domestic lodgements, with C and D the most common ratings.
The Committee on Climate Change published analysis about reaching net zero emissions by 2050 and recommended that by 2035, almost all replacement heating systems for existing homes must be low carbon or ready for hydrogen, so that the share of low-carbon heating increases from 4.5% now to 90% by 2050. In 2015, the Energy Technologies Institute estimated that 20,000 households per week—over a million per year—would need to be switched from the gas grid to low-carbon heating between 2025 and 2050 to meet the then 80% emissions reduction target in the event that non-fossil fuel gas alternatives have not been developed by then.
My right hon. friend spoke about the importance of retrofitting existing housing stock, which makes up about 85% of the homes that we are talking about. Does he agree that one suggestion that the Minister could take away is that over time, we could increase the duty on landlords to ensure that their properties become more energy efficient? A requirement for their properties to reach an energy efficiency rating of D, then C, and so on, would not only give landlords time to adapt, but would help tenants in some of the poorest households to save on fuel bills and would also help meet our carbon emissions targets.
I will touch on that briefly later in my remarks. My hon. Friend is right, and the Government have already introduced requirements for landlords to get to an E rating for all properties other than those in the categories of exemptions—those include listed buildings, properties where the tenant will not allow the adaptation because of its intrusive nature, or where the cost makes the adaptation disproportionate. Those requirements come into effect from 1 April for all new and existing tenancies, and there is talk of progressively increasing the requirement to a C rating, as my hon. Friend alluded to.
That is absolutely fine for new builds and is probably fine for properties in which the work relatively simple to do, but the big challenge is for existing, and particularly older, housing stock. The work is extremely intrusive and most tenants would not be able to occupy the building while it was being done, so it can only really happen when a tenancy comes to an end. Of course, that does not affect the 9 million-odd owner-occupied houses that do not already have a rating, so about a third of the housing stock is not rated at all. It will not apply to those properties unless the Government choose to change the rules and make owner-occupiers upgrade their buildings as well.
Going back to my thread about the scale of the challenge in adapting our existing housing stock, the current level of gas boiler sales is over 1 million a year, while heat pump sales are only around 20,000 a year. The capital cost of heat pumps, and the adaptations to existing homes to make them effective through under-floor heating, wall insulation and double glazing, make them a very expensive and disruptive solution for retrofitting homes.
The issue of ensuring the heat efficiency of older homes is particularly pronounced in rural areas, such as my constituency and that of my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), where there are more older homes and—certainly in my case, in Shropshire—a higher proportion of listed houses. Those houses are exempt from EPC requirements at present, and they may also not be connected to the traditional gas grid. For example, only 3% of all off-grid homes are at the required minimum EPC level identified by the clean growth strategy, but rural off-gas-grid homes make up 11% of all UK homes. I encourage the Government to engage with industry to tackle that issue in working to meet the 2050 target.
We clearly face a massive challenge in adapting existing housing stock to reduce emissions and become more efficient. Some 85% of UK homes are heated through carbon-emitting gas heating systems. As I have already indicated, the pace and scale of adaptation to achieve net zero by 2050 will require a dual strategy of making homes more energy efficient and decarbonising their heat sources. The Government have taken action, including through the minimum energy efficiency standards for the private rented sector that we have just been talking about, which came into force for new tenancies in 2019. Those standards require landlords to contribute up to £3,500 to improve rental properties with an EPC rating of either F or G.
However, as I shall elaborate shortly, the experience of my constituents in rural Shropshire—and my own as a landlord—is that that sum does not reflect the actual cost of retrofitting most homes, such as three-bedroomed, semi-detached cottages in rural areas. I was surprised to discover a 95% decline in the installation of domestic energy efficiency measures since 2012, meaning that the rate at which homes undertake energy improvements needs to increase by a factor of seven to meet the targets set out in the clean growth strategy.
The Government can and must go further. For example, the market for zero-carbon heating technologies is still immature and needs further Government support to develop. The renewable heat incentive is due to end next year, in March 2021, and I sincerely hope that its successor arrangements will be included in the Budget next month. I encourage Ministers to consider replacing the RHI with a capital grant or an improved green finance loans scheme. That would better reflect the main barrier to heat pump uptake—the high up-front cost of capital equipment and adaptations required, such as underfloor heating—rather than helping to reduce running costs as at present.
I also hope that the Government will consider the recommendation of the January 2020 report of the Building Better, Building Beautiful Commission that VAT on housing, renovation and repair should be aligned with that on new build in order to stop disincentivising the reuse of existing buildings. The Government are in a position to take bold steps on retrofitting social housing. I welcome the Conservative manifesto commitment to invest £6.3 billion to improve the energy efficiency of 2.2 million disadvantaged homes, reducing their energy bills by as much as £750 a year over this Parliament.
Last year the financial scale of the challenge of improving existing housing stock was laid bare by the then Minister when answering a parliamentary question. It was made clear that the aspiration for as many homes as possible to be upgraded to EPC band C by 2035, as set out in the clean growth strategy, was estimated by the Department to have a total investment cost of £35 billion to £65 billion. If my maths is right and that applies to the 12.5 million properties at a D rating or worse, that would average between £2,500 and £5,200 per property. I have news for the Minister: from all our anecdotal evidence for the actual cost of conversion to get an EPC E rating to meet the private rental standards we have just been talking about, that seems to be an unrealistically low figure.
Whatever the figure, those are staggering sums. The good news is that, alongside doing the right thing for our environment, such investment could deliver substantial economic returns of up to £7.5 billion per year overall, and £275 per affected household per year by 2035. That would have a spin-off benefit of creating a large number of jobs to do the refitting work—estimated at 100,000—and saving the equivalent of six Hinkley Point C-sized power stations-worth of energy. There is therefore potential for a viable investment case to be made, but it needs to be credibly structured, which I am afraid some previous schemes were not.
The other significant challenge is that achieving net zero for our built environment will require improving not only domestic homes but non-domestic building stock across the country. The 2016 building energy efficiency survey identified some 1.83 million non-domestic premises in England and Wales, with vastly diverse usage and efficiencies, presenting a significant challenge in reducing emissions. In both rented and owner-occupied workplace buildings, five sectors accounted for 70% of total energy use—retail, storage, industrial, health and hospitality—and 67% of energy was used for activities that were not sector-specific, such as heating, hot water, lighting and the like. There is real scope to reduce energy consumption if the approach is correct.
The Government’s consultation set out two options outlining the energy cost implications of setting a target of achieving an EPC rating of B or, alternatively, an EPC rating of C. It is encouraging that the Government’s preferred approach seems to be to aim for the higher rating of EPC B, given the scale required to meet our emissions obligations, but that will of course require considerable investment, estimated at some £5 billion. The Government will need to reflect carefully on the delivery mechanisms used to stimulate the change required, not only using market mechanisms and support for new technologies, but enabling access for private sector businesses to green finance to facilitate adaptation.
The third area is the estate of the Government and public sector, which are of course substantial occupiers of buildings. The Government should lead by example to reduce emissions by tackling the energy efficiency of the Government estate. They have reduced emissions from the public building estate by 26% since 2009-10, but in reality that has been achieved mostly through a reduction in the estate rather than through improvements in efficiency.
Last year the Environmental Audit Committee took evidence on net zero government and learnt of interesting work going on through modern energy partners, a collaborative programme between the Department for Business, Energy and Industrial Strategy, the Cabinet Office and Energy Systems Catapult, working alongside the Crown Commercial Service and private sector specialists. MEP was launched in early 2018 and was expected to complete in April 2021, at which point the Government may consider the programme for adoption as business as usual.
The Conservative manifesto for the December general election committed to a public sector decarbonisation scheme totalling £2.9 billion over a five-year period, and to funding insulation in hospitals and schools. I trust that will be confirmed in the comprehensive spending review later this year. I do not want to pre-empt the conclusions of the MEP, but I hope that the Government will consider incentivising public sector organisations to invest in their own renewable energy sources wherever possible, which will deliver lower energy bills to help recoup their costs, as well as further reducing emissions and supporting the UK’s growing renewable sector.
I will also touch on the validity of the EPC ratings regime, since they have become the main tool for Government and those looking to buy properties to analyse the supposed efficiency of a building. I am afraid that I have serious reservations about the EPC regime. Its current methodology can produce perverse ratings that will hamper significantly our efforts to decarbonise existing building stock. For example, high carbon-emitting heating options can achieve higher scores because they are cheaper to run, which is clearly contrary to the ambition but a hangover from the legacy purpose of EPCs—they were originally introduced to help reduce fuel poverty, whereas their current use is primarily to assess energy efficiency. Thus, biomass boilers and wood-burning stoves often score badly in EPCs, as the number of models included in the database is limited, default efficiencies are poor and fuel costs can be higher than for heating oil, even though they generate a fraction of the CO2 emissions of oil, coal or gas per kilowatt-hour.
In assessing EPCs, the weighting of costly measures that can make a material difference in improving energy efficiency, such as replacing single-pane with double or even triple-glazed windows, can only score two points, in the case of double-glazed windows, since it may have a low impact on fuel costs. I encourage the Minister to take away this point and to engage with stakeholders on how the EPC ratings could be updated or amended to reflect better the ambition of meeting net zero by 2050.
In conclusion, I have five clear policy points, on which I hope the Minister will reflect. First, there is a need to strengthen the future homes standard, so that inefficient homes are not being built for longer than is necessary. Local authorities, as we have been discussing, should have the flexibility to set higher standards earlier if they so wish, to meet their own climate change targets. The Committee on Climate Change has called for the date to be moved forward to give certainty, and I hope the Minister will consider that.
Secondly, the Government must support zero-carbon heating beyond the end of the current renewable heat incentive schemes—beyond 2021—including financial support and targets for heat pumps and other zero- carbon heating options. Thirdly, householders should be incentivised to improve the efficiency of their homes, not only in fuel-poor homes. In rural constituencies such as mine, that will create jobs and keep heating bills lower, while cutting emissions and energy use, but Government support is required to get it moving.
Fourthly, in publicly owned buildings the Government have a real opportunity to lead by example. They should extend their manifesto commitment to improve schools and hospitals, by enabling public sector bodies to invest in on-site renewable energy sources. That would create jobs, reduce bills and emissions, and show the Government’s commitment to their world-leading ambition in cutting emissions. My final ask is that the Minister commit to a review of the EPC system, which has moved on from its original purpose and can create perverse anomalies, particularly for older, rural homes.
I welcome the Government’s future homes standard consultation and their clear target to reach net zero by 2050, with all the steps that will inevitably entail. I hope the Minister will reflect on the concerns of various organisations that will have submitted evidence through the consultation, and Members’ comments today, to ensure that the real opportunity to bring lasting change to the way we construct, insulate and heat our buildings does not slip through our fingers.
It is an honour to speak under your chairmanship today, Mr Pritchard. I listened to the right hon. Member for Ludlow (Philip Dunne) with the greatest of interest, not least because I come from one of the coldest parts—if not the coldest part—of the United Kingdom. There is a village called Altnaharra in Sutherland, which is a great favourite of Jeremy Paxman—he goes to catch salmon there. People also have a very good chance of seeing a golden eagle there. However, every year Altanarra is the coldest place in the United Kingdom.
I have been increasingly worried by something that all right hon. and hon. Members know about: the terrible thought of a pensioner deciding to switch off their heating because they simply cannot afford it. I want to put on the record my gratitude to Councillor Richard Gale, among other colleagues, who has helped to spearhead the issue that the right hon. Gentleman spoke about in East Sutherland and the wider highlands and islands. Although we generate an enormous amount of renewable energy from our onshore and offshore wind farms, in actual fact many of my constituents have heating bills they simply cannot afford.
In absolute fairness to the Scottish Government, I want to put on the record my thanks to them; I may sometimes take a pot shot at them, but they have put tackling fuel poverty at the top of their agenda. Credit should be given where it is due. My wife comes from one of the six counties of the UK part of Ireland—let me get my history right—and I understand that similar moves are being made at Stormont, which we should be grateful for.
In my brief contribution, I will make a couple of suggestions. I live in a particularly cold, energy inefficient house, so I know all about keeping a house warm. Hon. Members will probably be shocked to know that I know all about lighting fires and trying to stay warm and trying to haul ancient shutters shut and getting them to stay shut. Oddly enough, old-fashioned wooden shutters were quite good at energy insulation, although I am not advocating that we step back to 18th or early 19th-century building construction. The right hon. Gentleman talked about retrofitting; that is the problem we face in the highlands. Notwithstanding the good measures undertaken by the Scottish Government, in some ways we were slightly better at these things 25 years ago than we are today.
That leads me to my next point. A long time ago, when I was a councillor in the 1980s and 1990s, home improvements could be undertaken in several ways. The Scottish Office—then part of the UK Government, not today’s Scottish Government—would allocate two forms of capital funding to councils, known as block A and block B. Block A was used to build, renovate or do up houses in the public rented sector—that is where council houses were built. Block B was for renovating or repairing properties in poor condition that should be lived in. That included spaces above shops, because there was a tendency for many living spaces above shops not to be used in quite the way they had been when the shopkeeper lived there, as a certain former Prime Minister of this country did.
The system worked extremely well; my own Ross and Cromarty District Council was able to say, “Right, we’ll take a particular part of a village in the highlands, and target the whole of one street where there are privately owned cottages and people do not have proper insulation.” We would call it something like a care and repair scheme, which worked extremely well. There was a dividing line between the rented and not rented sector—block A and block B—but all that was capital; it was borrowing as opposed to revenue, so it was easier for the Scottish Government, and ultimately the Treasury, to use the public sector borrowing requirement and the Public Works Loan Board to get the cheapest money in town and direct it at the problems that had to be sorted out.
Today, we know for a fact that money has never been cheaper, so in some ways it is easier for the Treasury to borrow a large amount of money at a cheap rate and direct it straight at what it wants to achieve, be that building ships or whatever. As the right hon. Gentleman said, it should be relatively easy for the UK Government to direct a chunk of money at housing, given that it does not come off the revenue budget—in other words, they do not have to raise taxes to spend. They will have to cover the borrowing costs, yes, but they are very cheap. That is one suggestion worth thinking about, as it worked well in the past. Perhaps we will hear more detail about what the Scottish Government do from the hon. Member for Kilmarnock and Loudoun (Alan Brown)—he will know better than I do. The Scottish Government are doing their best.
My final point, because this is a brief contribution, is that I have spoken in this place about trying to encourage people, for carbon reasons, to buy and use electric cars. However, even for those with lots of power points for charging, electric cars are expensive things to buy. A lot of people are put off by the cost. I have suggested some kind of tax break for people who buy an electric car, taken off their pay-as-you-earn code. That might be a constructive way of looking at it. To encourage householders to think about making their homes highly efficient, it might be worth making it work for them to do the work, as well as there being Government assistance. That would address the point that right hon. and hon. Members made about heat pumps. Heat pumps work, but they are fiendishly expensive to put in, and the disruption is something else. But if the goal for the house owner at the end is worth it, the game is worth the candle—I think that is the right expression.
This is an enormous issue for me, because it is so dashed cold up in my part of the world. I wish it was not so. Who knows? Climate change may have us all growing grapes on the straths of Sutherland and Caithness in the years to come, but I doubt it.
It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank my right hon. Friend the Member for Ludlow (Philip Dunne) for his comprehensive assessment of the issue.
I wish to make a couple of points during my equally short contribution. It is worth reflecting that building regulations first included energy conservation as long ago as 1972. Since then, year after year, those regulations have been tightened up to achieve much greater energy conservation than before. The problem is that the last substantial upgrade of the regulations to achieve a very good energy conservation outcome was in 2013; there has been no substantial upgrade since that date. That is worrying. Minister, when will the building regulations next be upgraded and what will that include?
In 2015, the long-standing policy of the Cameron Government to achieve zero carbon for new homes was abruptly cancelled. That may seem like a little while ago, but it characterises a lot of the discussion about this issue. I hope the Minister can comment on that in his summing up.
The issue came up during the election campaign. I sat with a company that operates in the sector, in a village where a huge development is taking place. We worked out together how much it would cost to make the houses zero carbon as they were being built, from scratch. We calculated that the total increase in cost would be about £5,000; the total cost of retrofitting the houses was about £25,000. That is a huge difference, and retrofitting also comes with enormous problems—we have already heard about some. The firm I met specialises in alternative heating. Everybody wants a ground pump to be put in to get the best approach to heating, but that is not possible in many houses and is not the best solution. Other options, such as biomass boilers, should be considered, as we move forward.
We need to address this area in more detail, because there are significant opportunities for the UK. Residential and commercial buildings account for 60% of electricity consumption in the world today—a phenomenal amount. I have two points to make about that. First, there has been a lot of talk about increasing the ability of district councils to introduce regulations on net zero carbon. That is missing a trick. I invented neighbourhood plans that have gone out of their way to give communities the freedom to decide lots of important things about where housing should go. They have to work within a strategic framework that is set by the district council, but many neighbourhood plans are trying to achieve more than the district council wants. This is an opportunity to give them the freedom to take that forward.
My second point is about developing countries. Whether you support Brexit or not, we are a global player and we need to ensure that what we do helps in developing countries. Many such countries have a housing crisis—we must recognise that. Whatever we do there will have to involve sophisticated commercial financial options. Our international aid budget should reflect that, as well as the opportunities for British companies; many of the existing programmes will not sit very easily within that framework. Throughout my time as trade envoy to Nigeria, I have tried to encourage solar energy there, but the translation of that into better housing is quite a long way away. There is a lot that we can do to help that process.
The building in Africa that stands out as the best net zero example of its type is the Belgian embassy being built in Morocco. When that is the situation in a developing continent, we have to ask why, and what we can do about it.
I congratulate the right hon. Member for Ludlow (Philip Dunne) on securing this debate in Westminster Hall today and on his election as Chair of the Environmental Audit Committee. We look forward to many contributions under his chairmanship.
It is always a pleasure to follow the hon. Member for Henley (John Howell). In debates in Westminster Hall, he and I often sit on opposite sides of the Chamber but say the same things. That will be the case again today, which is very positive.
I declare an interest as chair of the all-party group on healthy homes and buildings, which over the last few years has conducted a number of inquiries and made recommendations, but everyone, including councils, the Government, builders and householders, has a role to play in achieving energy efficiency in buildings. Many of us have taken the environment for granted for too long. My firm desire is that my grandchildren and my great-grandchildren will have an opportunity to enjoy the beautiful countryside that I have so enjoyed throughout my life. For that to happen, we have to make changes that are positive, constructive and mark the way forward. I sincerely believe that we have to be good caretakers of the land that God has granted us and that we hold in trust for future generations.
We must also all be conscious that a massive part of addressing these issues is to use our Commonwealth, diplomatic and trading partnerships to encourage big industrial countries to take decisions that reduce the size of their carbon footprint. We must be ambitious in our desire to achieve that, but we must always bring people along with us in our attempts to make a difference to this wonderful world that we live in. The Committee on Climate Change has highlighted that Northern Ireland contributed 4% of UK carbon emissions in 2016. That is a small percentage, but it does not mean that we do not have to do our bit and make sure that reductions happen. We have a key role to play in meeting the UK’s legislated emissions reduction targets and obligations under the Paris agreement. With a reconstituted Northern Ireland Assembly up and running, and functioning, there will naturally be a more formalised approach to how we can reduce our emissions in line with the rest of the United Kingdom. The Minister is always very assiduous in replying to comments and questions, so could I ask him—I probably know the answer, but for the record—what discussions has he had with the Northern Ireland Assembly at this early stage to see how we meet the targets?
I was interested to learn that the built environment contributes around 40% of the UK’s total carbon footprint. Almost half of that comes from energy used in buildings, for example plug loads and cooking, and infrastructure, such as roads and railways, and has nothing to do with the functional operation. Newly constructed buildings are more energy efficient, but 80% of the buildings we will have in 2050 have already been built, so a major priority is decarbonising our existing stock, the cost of which has been mentioned by previous speakers.
The UK Green Construction Board said:
“Direct emissions from fuel use in existing buildings rose for the second year running in 2016, mainly due to heating. Heating alone results in 10% of the nation’s carbon footprint and homes are more significant than all other building types put together. Decarbonising our heat supply is one of the big policy challenges ahead. Another major challenge is the carbon embodied through construction. Annual embodied emissions alone are currently higher than the GCB’s target for total built environment emissions by 2050.”
In a very interesting paper, the Royal Institute of British Architects notes:
“The built environment is responsible for around 40% of global carbon emissions and architects have a significant role to play in reducing UK greenhouse gas emissions to net zero.”
RIBA welcomes the commitments and the direction of travel signified by many of the measures proposed in recent Government consultations. It sets out six points, the first of which relates to using the metric of “operational energy”, or energy used at the meter. Operational energy is the actual energy use of a building, and includes both regulated and unregulated energy sources. We must look at what happens in homes. Energy performance certificates are not the most accurate measure of energy efficiency, as they only predict for regulated energy sources, including heating and lighting, not unregulated ones, including personal devices such as computers, refrigerators and coffee machines. The document suggests that operational energy should be validated through the post-occupancy evaluation at the completion of a project. POE is essential to ensure that a home is working as it was intended, which is important.
The second point is a recommendation of actual energy performance targets for buildings in line with the RIBA 2030 climate challenge. The current process essentially benefits buildings of poor shape and design, and we have to change that, because if we do not we shall have problems. Setting actual operational energy targets would encourage architects, developers and homeowners to be innovative and would reward good design based on form, orientation and fabric performance, rather than simply calculating an emissions reduction based on a generic building.
Thirdly, RIBA proposes introducing embodied carbon targets for buildings, in line with the 2030 climate challenge, and suggests giving encouragement for embodied carbon to be calculated in accordance with the Royal Institution of Chartered Surveyors whole-life carbon assessment for the built environment. Again, those are positive measures, and the Minister is probably well aware of those recommendations and suggestions, but it is important to have them on the record. RIBA also suggests promoting the use of post-occupancy evaluations, pointing out that a POE gives the building owner or tenant, the architect and the builder a chance to understand any areas that are not performing as expected, and to make changes. That is especially useful for energy efficiency.
The fifth recommendation is to close the loopholes in the transitional arrangements for the future homes standard. The document refers to evidence that housing developments are being built to energy efficiency requirements that have been superseded more than twice, as a result of changes to part L of the building regulations. It seems that the requirements may have improved, but people have not caught up with that. That is not acceptable and it will result in housing developments being built to different energy efficiency requirements. We need them to be built to the same requirements, so that the same process goes forward. RIBA suggests that where “substantial and meaningful work” such as physical construction work has commenced on an individual building within a reasonable period, the transitional arrangements should apply to that building—but not to buildings on which some building work has not commenced. It further suggests that a reasonable period within which work should have started is 12 months.
The last point is about introducing display energy certificates. As I have mentioned, EPCs are not an appropriate measure of energy efficiency. The use of the actual energy performance as a measure of energy efficiency through the implementation of a DEC programme would be more effective. That approach has been used in New York and Australia. Both disclose operational energy use for all buildings and in the latter case it has helped to reduce operational energy by some 70%.
There are things happening elsewhere that we should try to make progress with. The climate emergency demands urgent action and leadership by architects and the wider construction industry. It is important to reduce operational energy demand by at least 75%, and embodied carbon by at least 50% to 70%, before UK offsetting; and to reduce potable water use by at least 40%, as well as achieving all core health and wellbeing targets.
It is clear that there is a role in construction to help us to achieve our carbon goal. As with anything else of worth, what we want must be paid for in some way. There is no doubt that scaling back funding and incentives in the construction industry has meant that we are not achieving what we could achieve. We must focus our energy, attention and finances on encouragement to big constructors and small firms alike. It is important to make lasting change to the mindset of the construction industry to ensure that we meet and keep to targets and that we are an example to the rest of the world of how carbon-zero building can be achieved in an affordable and practical way.
I am sure that we are all aware of the story where a young boy of five or six years old on the shore is picking up starfish and a man is watching his antics. The boy picks up a starfish, puts it in his bucket and takes it out to sea. The guy looks at him and says, “Young man, you’re wasting your time. You can’t save them all,” and he answers, “But I can save this one.” We can only play a small part by what we do. We cannot change the world by ourselves, but we can bring about change if we do what we can at home. We cannot reduce the world’s emissions by our own efforts, but we can reduce the emissions in our reach and encourage other nations across the world to do the same.
It is pleasure to serve under your chairmanship, Mr Pritchard. Like everyone else, I congratulate the right hon. Member for Ludlow (Philip Dunne) on bringing forward the debate. I also congratulate him on his new role. He is clearly passionate about the environment. I wish him well in holding the Government to account, which I am sure is more fun than being an actual Minister. It was interesting that he started with five green pledges for Lent. Similar to the saying about puppies, those pledges could be for life and not just Lent. We can reflect on that.
The right hon. Gentleman set the scene very well, including the scale of the issue that faces us in achieving net zero for domestic buildings, and fact that the decline in emissions has stalled in recent years. It certainly struck home to me that about 20 million of 29 million homes have an EPC rating, and of those more are rated D than A, B and C combined, although I suggest that those figures are not reflected across the UK. I will give some statistics later.
I agree completely about the need to decarbonise our heating system. The bigger picture there goes hand in hand with the need for the UK Government to invest in carbon capture and storage and hydrogen production, with projects such as the Acorn project up in Peterhead. The right hon. Gentleman rightly highlighted the big challenge of rural off-gas-grid homes. That is a big challenge for the Government and I, too, look forward to hearing the Minister’s response on that and on the issues about the renewable heat incentive coming to an end. Looking at the bigger picture, that ties in with the loss of the feed-in tariffs for solar. There is now a 20% VAT uplift in solar. All those measures are prohibiting energy efficiency measures that would reduce energy demand and therefore the carbon emissions from homes.
There was a good statistic about the fact that if we achieve the EPC band C overall, that would be the equivalent of the removal of six Hinkley Point C power stations. We should bear in mind that the Hinkley Point C capital cost alone is about £22 billion. That shows how much money could be saved with direct Government investment to bring the entire housing stock up to spec. In the long run it provide value for money. The right hon. Gentleman highlighted the critical issue with the EPC regime, and favouring lower costs over carbon emissions. The hon. Member for Strangford (Jim Shannon) touched on that as well, so it is clearly something that needs to be resolved. It would be good to hear what the Minister says on that and the five recommendations that were made.
The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) spoke about lighting fires, which took me back to my childhood when we had coal fires in the house and there would be ice on the inside of the single-pane windows when I got up. There is one blessing: things have moved on in the last 30 to 40 years. We also heard from the hon. Member for Henley (John Howell) on the big issue of cancelling the zero-carbon homes initiative and the fact that retrofitting will cost five times the original capital outlay. That again shows that changing decisions costs more money in the long run. The Government should look at the bigger picture. Of course, no debate would be complete without the hon. Member for Strangford giving us the Northern Ireland view within the UK context. He made some critical points.
It really is a no-brainer that greater energy efficiency measures can only assist in reducing carbon emissions at the point of use, as well as generation demand, further reducing overall carbon emissions. Energy efficiency can help to reduce fuel poverty and can be part of the green industrial revolution, creating additional jobs in various insulation techniques. Obviously, it is needed to get to our net zero target by 2050, so I must ask why the UK Government are not doing more in that field.
One simple positive measure that the UK Government could pursue is removing the 20% tax threshold on energy efficiency home improvements. Independent research by the Federation of Master Builders demonstrates that cutting VAT on energy efficiency improvements will not only improve the housing stock and generate thousands of jobs but significantly boost the UK economy by bringing empty properties back into use and reducing the incidence of fuel poverty. I suspect that it is too much to hope for that measure to be included in next month’s Budget, but the Minister should be talking about it with Treasury colleagues.
Others Members touched, implicitly or directly, on the fact that direct Government investment in energy efficiency is crucial. The UK Government need to follow the lead of the Scottish Government. Now, I would say that, but organisations in the sector say it as well. The energy companies say it, as do many third sector organisations. The BEIS Committee said it in its 2019 report, “Energy efficiency: building towards net zero”, as did the Committee on Climate Change in its 2019 progress report to Parliament, titled “Reducing UK Emissions”. The BEIS Committee report stated:
“We note that Scotland’s investment of four times more than England cannot be explained by a less efficient dwelling stock: the latest housing survey data demonstrates that homes in Scotland actually have greater insulation levels than in England. For example, in 2017, 49 per cent of homes in England had insulated walls, compared to 60 per cent of homes in Scotland… Scotland has made much faster progress in improving the energy efficiency of its fuel poor homes than England, where in some bands, progress has stalled.”
It was good to hear the hon. Member for Caithness, Sutherland and Easter Ross acknowledge the work of the Scottish Government on that.
Statistics show Scotland’s relative success: 44% of Scottish homes were rated as EPC band C or better in 2018, compared with just 34% in England, and only 20% in Wales. In Scotland, the proportion of properties in the lowest EPC bands of E, F and G has more than halved since 2010, going from 27% to 12%. In England the figure is higher, at 16%, and in Wales it is 20%—although the Scottish figure is measured slightly differently. It is therefore little wonder that the BEIS Committee concluded:
“The Government appears indifferent towards how public per capita spend in household energy efficiency in England compares to other parts of the UK”
“the governments of the devolved nations treat energy efficiency as a much higher priority than the UK Government.”
The Committee’s description of the UK Government as “indifferent” is particularly damning. I would like to hear what the Minister has to say about that, and how the Government will address it going forward.
The Committee on Climate Change confirmed that policies are not currently in place to deliver the UK Government’s ambition to improve all homes to at least EPC band C. The CCC stated that regulations for the private rented sector prioritise costs for landlords over the costs for tenants to operate their heating systems, and that minimum standards for social housing are required. It then observed that the Scottish Government, by contrast, are demonstrating how an effective policy package for energy efficiency improvements in buildings might be delivered by setting out a comprehensive framework of standards, backed by legislation. That legislation includes private rented sector regulations, phased to set a date for when new tenancies have to comply, and a backstop date for all private rented properties. The Scottish Government also set a higher cost that landlords in the private sector might have to shoulder. There are proposals for all owner-occupiers to be required to meet EPC band C by 2040, with incentives to try to do it by 2030. In the social rented sector, the revised standard published in June 2019 requires all social housing to meet EPC band B by the end of 2032, and sets a minimum floor of EPC band D from 2025, below which no social house can be re-let.
It is time for the UK Government to follow suit and put in place a proper framework covering the private rented sector, social housing minimum standards and owner-occupiers, as the Scottish Government have. The Scottish Government backed those measures up by spending from 2009 to 2021 what is predicted to be more than £1 billion, and £145 million this year. If the Government invest in a long-term energy efficiency investment programme, it will create jobs, allow the programme to be delivered at best value, avoiding spikes in cost, and be part of the green industrial revolution.
Some 27 million homes need their heating systems decarbonised, so it is crucial that they are as energy efficient as possible. The Government have one live scheme for home insulation measures: the energy company obligation scheme. Yet the Committee on Fuel Poverty states that those measures do not target the right people, so that needs to be reviewed as well.
Another spin-off of energy efficiency measures can be the regeneration of social housing stock. We tend to think of energy efficiency measures as internal insulation, but they include external cladding. When external cladding is installed and re-rendered it can transform the appearance of housing schemes—I have seen that first hand in my local authority, where I was formerly a councillor.
The BEIS Committee also said in its report that the UK Government must not only match Scottish levels of funding but create a joined-up strategy, and that the
“weight of stakeholder evidence suggests that Scotland designating energy efficiency as a national infrastructure priority has helped to improve its policy impact, making energy efficiency policy better designed and funded, longer-term, as well as more comprehensively governed and targeted, than in England.”
Hopefully the Minister will acknowledge that, and step up to the plate by following suit.
It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the right hon. Member for Ludlow (Philip Dunne) not only on securing this important debate, but on his excellent and comprehensive opening remarks, which set the scene very well. I also congratulate all other Members on their contributions, because the tone of the debate has rightly been very constructive—no pun intended.
Climate change is the biggest challenge facing us all, and as politicians we must rise to that challenge. I was reminded of that a couple of weeks ago, when speaking at Newcastle’s youth climate strike. The concern of the young speakers about the climate emergency was matched only by their lack of confidence in politicians’ ability to address it. I think, and hope, that we can prove that we have the ability to make real change and achieve net zero in time to save the planet. Today’s debate has touched on several issues that contribute to that objective, associated with energy efficiency.
Insulating our homes to a high standard is essential to tackling the climate emergency, and will ensure that we tackle the fuel poverty crisis in our country—a national scandal, with 10,000 people tragically having died last year because their homes were too cold. At the last election Labour put forward proposals to deliver warm homes for all, with the largest upgrade of UK housing since post-war reconstruction. That upgrade would have cut more than £400 off the average bill, thereby eradicating the vast majority of fuel poverty; reduced childhood asthma by more than half a million cases; and cut the UK’s emissions by 10%. The programme would have created 250,000 skilled construction jobs through the 2020s. Through a climate apprenticeship programme, the training and skills needed to access those jobs would have been available to all.
Labour will not have the opportunity to deliver those policies in this Parliament, but I urge cross-party co-operation on meeting our energy objectives. If we are serious about tackling climate change and fuel poverty, nothing less than a nationwide, large-scale programme will do. I was impressed by the suggestions made by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on how to achieve such a large-scale building programme, and the incentives in his constituency to succeed in it.
Unfortunately, since the election, details about how the Government will achieve their targets for increasing the energy efficiency of homes, schools, businesses and public buildings have been somewhat scant. I agree absolutely with the hon. Member for Kilmarnock and Loudoun (Alan Brown) that the measures in the clean growth strategy are not enough to ensure that we meet carbon emissions targets and move towards a carbon-neutral society.
Unfortunately, the Government’s pledge to invest £9.2 billion in improving the energy efficiency of homes, schools and hospitals does not go far enough. There is no real ambition about ensuring that homes are insulated. Plans introduced in 2018 to insulate 17,000 solid-wall homes are noble, but at that rate it would take 400 years to insulate all 4 million such homes in the UK. In its recent report, “Engineering priorities for delivering net-zero”, the Institution of Engineering and Technology—I declare an interest as a fellow of that institution—set out some of the challenges and emphasised that 80% of the homes we will be living in by 2050 have already been built, as the hon. Member for Strangford (Jim Shannon) stated.
Current proposals to ensure carbon neutrality in new build homes through the future homes standard do not go far enough. They would eventually come into force in 2025, nine years later than previous plans were set to be implemented before they were scrapped in 2015. The hon. Member for Henley (John Howell) did well to emphasise the importance of building regulations and the retrograde nature of that measure.
MawsonKerr, an architecture firm in my constituency, raised with me a number of concerns that were also expressed by the London Energy Transformation Initiative, a voluntary network of more than 1,000 built environment professionals, including engineers and architects. It stated:
“The proposals will allow new homes to be built to lower energy efficiency standards than homes built today. This is a depressing step backwards rather than the huge leap forwards we need to take in the face of the climate emergency.”
Among other things, it criticises the fact that the future homes standard takes away local authorities’ powers to demand greater energy efficiency; that it targets not zero-carbon emissions but a reduction in carbon emissions, compared with the current part L of the building standards; that it does not prioritise energy efficiency but relies instead on bolt-on technologies to reduce emissions; that it fails to address fuel poverty or occupant health; that it makes no requirement for post-occupancy monitoring; and, as the hon. Member for Strangford mentioned, that it does not consider embodied carbon—the carbon emissions related to building the house.
The Government’s own Committee on Climate Change has said that the proposals do not go far enough to protect against overheating, flooding and water shortages. We have been reminded very effectively in the past few weeks of the importance of protecting against flooding.
We must be ambitious when it comes to any aspect of reducing our energy consumption. With the UK set to host COP 26 in Glasgow later this year, we have a chance not only to be ambitious for our own country, but to be an example of ambitious climate policy around the world. We need to look at how we can begin to move towards making buildings more energy efficient. As we heard, buildings account for 37% of UK carbon emissions. Ensuring that homes, the largest contributor to that figure, operate at their peak must be a priority. Ensuring that proper insulation is installed in all homes—particularly the homes of those with low incomes—would have many beneficial consequences. Not only does installing insulation increase the overall energy efficiency of homes and reduce their carbon output, but it reduces the pressures of high energy bills.
A report by Verco and Cambridge Econometrics found that bringing all low-income households up to high energy efficiency standards would not only tackle fuel poverty but generate a return of £3.20 for every £1 invested by the Government, improve relative GDP by 0.6% by 2030, and increase employment by up to 108,000 jobs a year between 2020 and 2030. Those are the concrete advantages of such a policy.
Another way to achieve greater energy efficiency is to bring all homes in the UK up to EPC band C. As we heard, to achieve that we need to look at upgrading millions of owner-occupied homes to make them more energy efficient. In addition, landlords should not be able to let out properties that are below acceptable energy efficiency levels. The remedy for that is enforcement at local level, but those standards have proven difficult to enforce given the strain on local authority resources.
Policies should be in place to ensure that landlords are given the assistance they require, above a certain threshold, to increase the energy efficiency of their property to the new standard. At present, the amount a landlord should spend on uplifting to band E is £2,500. If that were increased to £5,000, and a complementary system of grants were introduced to further uplift a property’s banding, the number of highly energy efficient properties in the rental market would increase. We must also normalise the idea that landlords should not be permitted to let properties that do not meet minimum energy efficiency requirements, and give local authorities the powers and funding necessary to follow up on that.
In conclusion, I have five questions for the Minister. Will he bring forward measures that focus on energy efficiency, which is vital not only to tackle the climate emergency but to reduce fuel poverty? Will he put in place a well-funded and ambitious plan to insulate existing solid-wall housing? Will he increase the amount available to landlords to spend on uplifting properties to band E? Will he put in place measures to improve energy efficiency in rented properties and new build properties? Will he give local authorities the power and resources to achieve more ambitious climate targets?
We face a climate emergency. This Parliament was the first to pass a motion declaring a climate emergency. We need action by the Government to ensure that we meet the challenge of that emergency.
It is a pleasure to take part in this debate under your chairmanship, Mr Pritchard. I thank my right hon. Friend the Member for Ludlow (Philip Dunne) for bringing forward this important and timely debate, and congratulate him on his election as Chair of the Environmental Audit Committee. My first outing in this role was in front of his Committee—under a different Chair, who sadly was not re-elected. However, I am pleased to see that my right hon. Friend has taken her place.
I have taken part in a number of debates about these issues. This one covered many policy areas, including power generation, which is not really what the debate is about, but I will start with my right hon. Friend’s specific points about heat and the energy efficiency of homes. He presented five challenges, and I will address each individually.
First, my right hon. Friend mentioned zero-carbon heating beyond the RHI. We are absolutely committed to seeing how we can support the renewable heat incentive beyond the date on which it expires. He also mentioned the future homes standard. My hon. Friend the Member for Henley (John Howell) raised the fact that the zero-carbon homes target was scrapped. The Government feel that the future homes initiative is much more realistic and better in terms of reducing carbon emissions in houses than the initial zero-carbon scheme. That scheme allowed for offsetting, whereas the future homes standard will concentrate on lowering absolutely levels of emissions. I think that is a much better way of approaching the problem, but I am happy to discuss that with him later.
The third item mentioned by my right hon. Friend is really key to the debate: incentives for householders to contribute in some way to upgrading the energy efficiency of their homes. When we look at the totality of buildings in the UK in terms of their carbon emissions, the vast majority—about two thirds—are owner-occupied homes: those inhabited by people who have either paid off a mortgage or currently have one. It is a big challenge to raise the energy efficiency of those homes. Drawing on his professional background, he spoke about the ability to have consumer finance and incentivise people to make such large investments. On that note, the Government have already started: we have a £5 million green finance initiative, working with banks to provide finance for precisely the reasons he mentioned.
It is an initial step. In Germany, KfW has a consumer finance piece that gives small loans for green initiatives. We had a green deal; my personal view and, I think, the Government view is that it did not work principally because the interest rate was too high. However, that does not discredit such initiatives.
I was struck that the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) mentioned the Labour party manifesto and its commitments on houses. It was extraordinary but unsurprising that although she mentioned all the jobs that would be produced and carbon emissions, she did not say how much the policy would cost. That is a critical part of the debate. As my right hon. Friend suggested, a huge amount—in the order of £65 billion—needs to be invested in the next 10 years. That will not all come from the Government; some will come from consumers, who will rightly invest in making their homes more secure. Investments in those houses are not lost money; they will enhance property values, so they make commercial sense in many ways.
[Mr Virendra Sharma in the Chair]
The fifth specific point mentioned by my right hon. Friend was the EPC scheme. It is not a perfect measure, but it does capture something about what we are trying to do. It has an indicative value in forcing up the standards we expect not only of the Government but of private sector landlords, as was mentioned in the debate. In that space, I can announce that we are already consulting on tightening standards in the private rental sector. We aspire for private landlords not to get properties to EPC band E but to make investments to improve their properties to band B or C by 2030. That is a significant improvement and a step in the right direction.
The debate has shown that we still have a big task. The hon. Member for Kilmarnock and Loudoun (Alan Brown) highlighted the achievements of the Scottish Government, but he will appreciate that of the 27 million homes in the UK, 24.2 million are outside Scotland, in England, Wales and Northern Ireland. While I appreciate the successes of the Scottish Government, we cannot see it simply as a competition. In fact, colleagues of his in the devolved Administration are always telling me, “We have got to work together and co-operate.” They want negotiations, discussions and policy evolution in partnership with the Government in Westminster. That is a welcome development. I have meetings and calls with Ministers in the devolved Administrations and I have just spoken on calls to Diane Dodds and Edwin Poots, the newly appointed Ministers in Northern Ireland. This cross-UK approach is the best method.
There are so many other issues we could talk about. We clearly need joined-up policy in this area. We cannot improve the energy performance of our buildings without engaging with our friends at the Ministry of Housing, Communities and Local Government. I was struck that that Department, which has responsibility for the performance of local authorities, was barely mentioned, which led me to believe that BEIS has the sole answers to all these questions. I wish that were true, but we do have to participate and engage with colleagues across Government in Treasury and MHCLG.
I thank the Minister for giving way and for rightly challenging me on the costs of the proposals I cited from the Labour manifesto. Our manifesto was fully costed, and the cost was £60 billion. As we said, we have the lowest interest rates in history. Will he tell me the cost of the thousands who currently die from fuel poverty? What is the cost to the economy of not meeting the challenges of the climate emergency?
If she will not barrack me, I can say that we do have policies addressing fuel poverty. We have the energy company obligation, which we are completely committed to, and we committed billions of pounds in our manifesto to address fuel poverty specifically.
I have two minutes in which to wrap up and allow my right hon. Friend the Member for Ludlow time to conclude the debate, so, with due courtesy and respect, please allow me to finish my remarks.
I am pleased that we had the debate and I am sure we will have more of them. This will probably make too much work for me and my officials, but I suggest we could debate specific issues raised this afternoon such as EPC standards, widening consumer finance and publicly owned building strategy—there are so many issues. Salix, the finance company focused on providing funding to upgrade public buildings, was not mentioned in the debate. There are many different avenues and I am sure that hon. Members in the Chamber will come to subsequent debates to discuss them more fully.
Welcome to your place to conclude the debate, Mr Sharma. I thank hon. Members who made contributions—when we started, I was not sure whether there would be any. I was delighted that we had thoughtful comments from my hon. Friend the Member for Henley (John Howell) and from the hon. Members for Strangford (Jim Shannon) and for Caithness, Sutherland and Easter Ross (Jamie Stone), who personalised his contribution with images of windows iced-up inside as well as outside all over his constituency. I am grateful to the Opposition spokesperson, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), for the constructive way in which the Opposition approached the debate. This is a cross-party issue on which there is broad consensus—not necessarily on the detail, however, as one would expect, particularly having just come through a general election campaign—and it will continue to reverberate around the House during this Parliament.
I welcome the Minister’s invitation to colleagues to continue with these themes in the coming months. I was particularly pleased to hear his commitment to extend RHI in some form and his comments on the future homes standard. We will look carefully at the Government’s response. I share his view that, with innovation in the City of London and other financial institutions in this country, we should be able to come up with a green finance scheme to help householders fund improvements.
The one area on which I would like to press the Minister on another occasion is the EPC regime, which needs to be looked at. I was slightly disappointed that he did not volunteer that. I hope that we can take another opportunity to discuss that, perhaps outside the Chamber.
Motion lapsed (Standing Order No.10(6)).
I beg to move,
That this House has considered the future of Cawdor Barracks, Brawdy.
It is a privilege to speak under your chairmanship, Mr Sharma. I am pleased to have secured this short debate on Cawdor barracks at Brawdy in my constituency, home to the 14 Signal Regiment, which specialises in electronic warfare. I want to address the continued uncertainty that hangs over the site, arising from a closure plan that has changed several times in recent years under different Ministers at the Ministry of Defence.
I will start by giving a brief history of the barracks, before emphasising their importance to the armed forces in Wales and to the local community in Preseli, Pembrokeshire. Located on the north-west coast of Pembrokeshire, some six miles from St Davids—the UK’s smallest city—the Cawdor barracks site has a long and active military history, stretching back to the second world war. It was officially opened in February 1944, as RAF Brawdy, and was initially a satellite station supporting the heavy bomber aircraft stationed nearby at RAF St Davids.
Following the end of the war, the base was handed over to the Fleet Air Arm of the Royal Navy, becoming a royal naval air station that was renamed RNAS Brawdy. From 1963 to 1971, the Brawdy site was home to Fairey Gannet anti-submarine aircraft and to Hawker Hunter fighter jets, demonstrating the base’s importance during the cold war. The Royal Navy left Brawdy in 1971 and the base was allocated to the then Department of the Environment. Three years later the strategic importance of the site was once again brought to the fore when the RAF returned to the base for a second time and D Flight of 22 Squadron took up residence with its Westland Whirlwind search and rescue helicopters.
In 1974 the 229 operational conversion unit, with its Hawker Hunters, relocated to Brawdy from RAF Chivenor in Devon, which was earmarked for closure. In that year the United States and the UK agreed to the construction of a SOSUS sound surveillance system alongside the RAF base at Brawdy, called a naval facilities engineering command. This US naval facility was to prove to be an essential and critical part of the site at Brawdy in the years ahead. Due to Brawdy’s proximity to the sea, it was an ideal location to house a station that monitored a growing number of underwater microphones designed to pinpoint Soviet submarines as they moved out of their waters and into the Atlantic, again underlining the base’s importance during the cold war.
A US military footprint would remain at the base for the next 20 years and, as with the RAF personnel based there, the Americans became a close-knit part of our community in Pembrokeshire during that time. I myself remember that at school, in the early-1980s, the American children in our classrooms were the first people from outside Britain that many of us had come across. The end of the cold war brought large-scale changes to the size and configuration of the armed forces, and that affected Brawdy, along with many other sites. The naval facilities engineering command facility was deactivated in 1995 and the Americans soon left.
Flying from Brawdy ceased in 1992, as part of the rationalisation of advanced and tactical weapons training, but it was a further two years until the remaining small number of RAF personnel and their Westland Sea King helicopters also left the site. In economic terms, the loss of the large number of RAF and US naval personnel and their families at that time had a significant negative impact on the Pembrokeshire economy. I will return to the economic value of the base later, but it is important for the Minister and others to understand the historical context of the decisions that are currently being taken about the future use of the site.
In 1995 the Brawdy site was transferred from the RAF to the British Army, under the name Cawdor barracks, and became a base for the 14th Signal Regiment, which had hitherto been located at various sites across Germany. At the time it was widely understood that the base was intended to be something of a temporary arrangement, with no certainty that it would become a permanent home. People closely involved in the transfer of the regiment to Cawdor barracks would later tell me that it was evident from the outset that the base was less than ideal, despite many positive aspects. The infrastructure on the site had lots of potential but required significant investment.
The main issue that has been raised with me time and again is the location, specifically the sheer distance of Brawdy from the Royal Corps of Signals HQ at Blandford in Dorset, or from the various UK regions from which the officers and soldiers of the regiment are primarily drawn. However, the temporary arrangement has now lasted a quarter of a century. The regiment is no longer seen as a somewhat mysterious outfit, dropped into Brawdy as a stopgap; it has become a deeply embedded and respected part of the local community in Pembrokeshire.
At this point it is worth saying what the 14th Signal Regiment does. It is the Army’s cyber and electronic warfare regiment. It has a unique role in providing a robust and sustainable electronic warfare capability to support deployed armed forces, facilitating operations in the electronic battle space. It is the only regiment in the British Army with these capabilities, and it bridges the gap between strategic cyber operations and tactical electronic warfare.
The soldiers based at Brawdy are at the cutting edge of electronic warfare, an increasingly important aspect of 21st century combat. Because of their unique set of capabilities, they have been used extensively on operations over the past 20 years, including those in Kosovo, Iraq, Afghanistan and numerous other locations where their activities, for very good reasons, will never be reported on or discussed openly. They continue to be used in the field even now. Operations Herrick and Telic in Afghanistan and Iraq saw soldiers from the 14th Signal Regiment used heavily. It is common to meet men and women from the regiment who completed two or three tours away from their friends and family during that period.
One of the biggest privileges in my time doing this job was in November 2006, when I attended the memorial service held in St Davids cathedral in my constituency for Corporal Peter Thorpe and Lance Corporal Jabron Hashmi, who were killed earlier that year in an attack by Taliban fighters in Helmand, Afghanistan. Both men had been serving with the 3rd Para Battlegroup but were either part of or attached to the 14th Signal Regiment. It was a privilege to meet members of their families and the Army imam, who participated alongside the dean of the cathedral in the memorial service, because Lance Corporal Hashmi was the first British Muslim soldier to be killed during this era of conflict.
Events such as this and the numerous homecoming parades that have been held in St Davids and in Haverfordwest, for the squadrons returning from tours of duty, have helped to cement a bond of affection and respect between the people of Pembrokeshire and this remarkable regiment. The regiment has been awarded the freedom of both the city of St Davids and the county town of Haverfordwest as testament to its contribution to our community and to our nation. The soldiers play an active part in the community, engaging with local schools, taking part in local Remembrance Day services and through annual charity concerts and open days. Soldiers at Brawdy also play a full part in the sports and social life in our county, competing in local rugby and football teams.
Yesterday we debated the Welsh contribution to the UK armed forces. Several hon. Members made the point that Wales should become home to one of the historic Welsh regiments—the Welsh Guards, the Queen’s Dragoon Guards or the Royal Welsh Regiment. The 14th Signal Regiment is not an historic Welsh regiment, but such is the bond of affection that it has formed with communities in west Wales over the past quarter of a century that it has, in my eyes and the eyes of many in my constituency, become a Welsh regiment.
About 250 Cawdor barracks personnel and their families are based in Pembrokeshire at any one time—the regiment has approximately 600 troops in total. I have heard it said a number of times that some of the officers do not like being based so far west along the M4, in deepest Pembrokeshire, but there is no question in my mind but that the overwhelming majority of the soldiers, and especially their families, have really embraced Pembrokeshire life. The spouses, partners and children of those stationed at Cawdor barracks have become a hugely important part of the local community.
There is also a strong community in Pembrokeshire of veteran families—those who once served at the barracks, or at the RAF base before that, and who have chosen to make Pembrokeshire their permanent home. Local schools have benefited from welcoming in the children of those stationed at Cawdor barracks, with the local authority telling me that about 100 primary school and 25 secondary school pupils from serving families currently attend schools in the county.
I have had the pleasure of visiting the barracks on numerous occasions over the years and speaking to the soldiers stationed there, and what comes across to me is that they genuinely enjoy being based in west Wales. With the particular lifestyle that rural Pembrokeshire offers, the outdoor activities ranging from surfing to mountain biking and climbing, and the friendliness of local people, it is little wonder that those who get stationed at Cawdor barracks through the regiment quickly fall in love with that part of Wales.
That brings me to the plans for closing the facility. In 2009, more than 10 years ago, publication of the MOD’s “Defence Estate Development Plan” kick-started what has proved to be a long drawn-out “on-off, on-off” discussion about closure and relocation of the 14th Signal Regiment. The MOD’s plan set out its framework for the defence estate to 2030; and in the plan, Cawdor barracks was identified as a “retained” site, which the MOD defines as a site
“where the future is not fully assured”.
In the same document, the idea of relocating the regiment was also first mooted, with it joining up with the also relocated 10 Signals in Blandford, Dorset, in a process called “pairing and sharing”.
A few years later, in March 2013, it was announced that the barracks were to close altogether and the 14th Signal Regiment was to be moved on. The then Defence Secretary, Philip Hammond, stated that the MOD intended to close Cawdor barracks at Brawdy,
“which is no longer fit for purpose”,
but “not before 2018”. The regiment would be relocated to St Athan, near Cardiff. In the statement to the House, the Secretary of State noted:
“The local communities in each of those areas have been hugely supportive of the military presence over many years. The loss of historic ties will be much regretted”.—[Official Report, 5 March 2013; Vol. 559, c. 847.]
Two years later, in 2015, the MOD confirmed that the regiment would not now be relocating to St Athan. In fact, the former Minister, Mark Lancaster, indicated to me that the closure plan was now off, although there remained a vague long-term intention to relocate the regiment and dispose of Cawdor barracks at some point in the future.
A bit further forward, in November 2016, the then Defence Secretary, Sir Michael Fallon, said in a statement that the barracks would remain open to 2024, but with no suggestion of where the 14 Signals would move to. During that statement, I questioned the Secretary of State and made the following point to him. I will read it out for the benefit of my hon. Friend the Minister:
“I am disappointed that the earlier decision to shut the base of the 14th Signal Regiment…in my constituency, which I was told a year ago had been reversed, now seems to be back on the cards. That has all been unsettling for the soldiers at Cawdor barracks and their families, who are a well-loved part of the Pembrokeshire community.”
“Will my right hon. Friend provide a bit more detail of the timeframe for the closure of the base, if it is indeed to happen? Will he give an assurance that there will not be any freeze of investment and that the base will be maintained to an acceptable standard as we approach the closure date?”
Michael Fallon responded:
“I am certainly happy to discuss continuing investment in the facilities… The estimated disposal date for Cawdor barracks is 2024, so I hope that that gives some more certainty to those who support the Signal Regiment there. We are shortly to confirm where the 14th Signal Regiment will be re-provided for.”—[Official Report, 7 November 2016; Vol. 616, c. 1295.]
That decision was reinforced in 2018, when a Defence Minister, my right hon. Friend the Member for Bournemouth East (Mr Ellwood), confirmed to the all-party parliamentary group on general aviation that Brawdy was one of 15 airfields across the UK being sold off by the MOD, as they were “surplus to military requirements.”
Clearly the whole saga has been very unsettling for the soldiers and their families, for the 30 civilians who work at the base, for the county council, which has a responsibility to try to plan sensibly for the future, and of course for the local communities affected. It is important to bear in mind that, for my constituency, losing such a facility will certainly result in an economic hit for the area. In 2015, in a review commissioned by Pembrokeshire County Council and the Defence Infrastructure Organisation, the economic effects of the closure of Cawdor barracks on the county were estimated at between £26 million and £30 million. That is a very significant amount for a rural community such as Pembrokeshire, where there are very few employers of any significant size. The local economy is dominated by agriculture and seasonal tourism and hospitality.
There is of course the important question of what the potential alternative uses might be for this site, with its large runway, hangars, sports facilities and other buildings, all located close to the national park. As interesting as all those elements of the site are, the truth, unless this Minister can inform me otherwise, is that over the past five years there have been very few prospective buyers coming forward and offering any alternative ideas for the site. Therefore, we need to be realistic: whatever use to which the site is eventually put will in all likelihood not fill the economic gap left by the closure.
What if the barracks were to close? I understand that the land is subject to the Crichel Down rules. That could see Brawdy offered back to its original owners for agricultural use. Although agriculture is very important in my constituency, returning the base to farmland would, I believe, not mitigate the loss of between £26 million and £30 million from the local economy.
Pembrokeshire County Council’s current local development plan, which is out for consultation, includes a proposal for an 11-hectare solar array for the Brawdy site that would be producing up to 5 MW. However, the size of any solar array is likely to be severely limited by the existing grid connections in west Wales and the substantial cost of increasing the grid capacity, so that does not look particularly hopeful as it stands.
In purely economic terms for my constituency, continued use of the site as a base for the regiment is the optimal outcome, which is why I am asking the Minister, in the first instance, if he will consider not pressing ahead with any closure plan but will instead recognise the value of what has been created in Pembrokeshire over the last 25 years in providing a home for the 14 Signals.
I totally understand that this matter is not purely about economics; it is first and foremost about what works best for the British Army in the years and decades ahead. However, I will draw attention to the importance of the armed forces footprint in Wales. The Brawdy site, like RAF Valley in north Wales, is one of those facilities that enables the MOD to claim that it has a genuine Wales-wide footprint. I know that the term “footprint” gets defined ever more broadly to cover all kinds of things, including suppliers to the armed forces, but if we are to use the term in its most meaningful way, we need to be thinking about those elements that constitute a real presence on the ground, which create bonds of respect and affection with local communities, where the personnel are part of those communities. Cawdor barracks, out there in far west Wales, provides for exactly that.
I hope that this afternoon I have been able to explain to you, Mr Sharma, and to the Minister the importance of Cawdor barracks and to make a case for retaining the facility in my constituency. That is my first ask of the Minister—to end the cloud of uncertainty that has been hanging over the barracks for the last 10 years and halt the closure plan, which has in any case shifted and changed over the years and sown seeds of confusion.
My second ask is for the Minister to look again at the potential of the site and pursue a strategy of making it fit for the future. Part of the reason why people will say that it is no longer fit for purpose is that it has had nothing like the investment that such a critical and sensitive part of the Army requires. A closure plan that has dragged on for 10 years already has resulted in the site being starved of sensible investment.
I have some further questions. If the Minister cannot fully satisfy me on the first two requests, will he confirm that, in the event of closure, the MOD will work closely with Pembrokeshire County Council to ensure that specific actions are taken to mitigate the economic impact? Will he commit to ensuring that those 30 or more civilians employed at Cawdor barracks will be re-employed before the base closes?
Can the Minister explain how he thinks the Crichel Down rules will work in the case of Cawdor barracks and whether the requirement to offer the site back to the original owners may act as an impediment to investment proposals? The local authority has been looking at numerous economic opportunities should the base close, but, as I said a few moments ago, very few serious concrete proposals have come forward.
I thank the Minister for taking the time to listen to my argument. He and I have discussed this issue before; he is very familiar with that part of west Wales and knows the community very well. He is also familiar with the work that the 14 Signals do. I thank him for the opportunity to set out a case for bringing this long-running saga to an end, to provide some greater certainty for the soldiers and the forces family connected to the 14th Signal Regiment, and hopefully for retaining an important part of the armed forces footprint in west Wales.
I am grateful to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) for securing this debate. Quite apart from his position as Chair of the Welsh Affairs Committee and his former role as Secretary of State, he has an understandable interest in the future of this long-established defence site, located in his beautiful Preseli constituency.
The barracks has been a feature of the Pembrokeshire coast since 1944 and, as my right hon. Friend set out, it has the unusual distinction of having served all three of our armed services. It first served as an operational airfield for the RAF, which operated Liberator heavy bombers there during the second world war, as he set out. It then served as a station for Royal Navy airborne early warning craft during the cold war. Finally, it has served as the home of the Army’s electronic warfare unit since the 1990s. The barracks has therefore played an important role in the military history of Pembrokeshire as well as that of Wales more generally.
My right hon. Friend brought us up to date by eloquently describing the links between the community and the service personnel of the 14th Signal Regiment, and the respect and affection in which they are held. I recognise that both they and the base’s civilian employees are important to the local economy. I therefore wholly understand his concern about the effects of the November 2016 announcement of Cawdor’s closure. I also understand that this has been a long story. The base’s closure was announced in November 2016, and I sympathise with his point that this has been a period of uncertainty for the community.
However, I must tell my right hon. Friend, with regret, that the intent to dispose of the barracks remains. The armed forces are now 30% smaller than at the end of the last century, but the defence estate has not yet been proportionately reduced in size. In many areas we use our defence estate efficiently, but overall it is too big, too expensive and has too many sites to maintain. That is why in the 2015 strategic defence and security review we committed to investing in a smaller, but optimised and efficient, defence estate. Military capability outputs have been at the heart of our defence estate strategy, and we are taking a transformational approach to better support the future requirements of our armed forces by generating special centres of specialisation and capability clusters.
Consolidating the defence estate enables the Ministry of Defence to concentrate its assets, investing in significantly better facilities to support the men and women of our armed forces. The Cawdor site, designed for the needs of the second world war and the cold war that followed, is sadly no longer fit for the vital and increasingly central purposes of electronic and cyber-warfare in the 21st century. Nor does the unit’s geographic location provide the easy synergies that the regiment needs with the units and organisations that it supports. We must ensure that the regiment can maximise its operational capabilities.
The Government understand the strength of feeling in those local communities impacted by the relocation of military units, here and elsewhere, and the deep-rooted histories and ties that are thereby sadly broken. I can reassure my right hon. Friend that careful consideration is being given to alternative uses for the site, with the aim of increasing the commercial use, driving regeneration and creating local jobs. We have a little time, given that the earliest date for closure is anticipated to be 2024, and I absolutely commit that my Department will work closely with Pembrokeshire County Council on potential future uses.
I am very interested in everything the Minister is saying. Can he give me a commitment this afternoon that in his new ministerial capacity—he is doing a great job in the Department, by the way—he will take the opportunity to visit the Cawdor Barracks site in the near future and perhaps come and see the site for himself, but also take a moment with me to meet Pembrokeshire County Council, to talk about the plans for closing the site and what steps need to be taken in the years ahead, to ensure that that transfer happens with minimal impact on my constituents and in the most productive and useful way possible?
I can absolutely commit to meeting my right hon. Friend here at Westminster. I would like to take the opportunity to visit the site and talk to the county council, but I cannot commit wholly to that—he will appreciate the pressures on diaries right at the start of one’s time in post. I would like to visit, and I will certainly make myself available in Westminster to speak to him about the application.
I would also like to talk to my right hon. Friend about the Crichel Down rules. Those rules normally apply only where sites are undeveloped, but that is something that we can take up and talk about in the context of this site, if that is helpful. As I have just outlined, we will work with the county council and that work will inform the engagement that we will also have with the Welsh Government, with the office of my right hon. Friend the Secretary of State for Wales and others on the potential alternative uses of the site.
The decision to close Cawdor barracks is an operational one, driven by the needs of the armed services, but it is no reflection on the Government’s strong commitment to maximising the contribution of Wales to the defence of the UK and maximising the benefits of the defence sector there. On the contrary, as my right hon. Friend, the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) and I, along with many other hon. Members, discussed in yesterday’s debate, Wales has made a first-rate contribution to the defence of the realm, and we are determined to maximise the benefits of the defence sector there.
To conclude, closures of established military bases inevitably have consequences for local communities, and my right hon. Friend has drawn that to our attention. Over recent years the Government have had to make a number of such difficult decisions in respect of bases around the UK. Our armed forces need facilities and accommodation that fully meet their operational needs. However, we recognise that the closure of this long-established site will inevitably have impacts on Pembrokeshire beyond the defence community. That is why my Department is working actively with the local authority and others to identify the most beneficial future use of the site. I commit myself to continuing to do so, with the help and assistance of my right hon. Friend.
Question put and agreed to.
UK Chemical Industry: Regulatory Divergence
I beg to move,
That this House has considered regulatory divergence in the UK chemical industry.
If we buy a car, house, cleaning products, food or clothes or visit the swimming pool or cinema, chemicals are involved in making the products we use. Chemicals are ubiquitous in our lives, and the chemical industry is a vital part of our national economic wellbeing. Chemicals are vital to the jobs of thousands of workers. Contract Chemicals is an SME in Knowsley that manufactures chemicals, and Blends is another that sells products made from chemicals. Both employ some of my constituents, whose livelihoods could be at risk if the Government do not get the chemical regulatory regime right. In the Liverpool city region, Jaguar Land Rover, Ford and Vauxhall employ thousands of workers in car production in which chemicals are vital components. Without a robust system of regulation, safety and quality will be compromised and our chemicals market will be open to the dumping of cheap chemicals from markets that do not have our high standards.
The consequences of poor regulation are spelled out in “Dark Waters”, which will be released on Friday in the UK. The film depicts what can happen to tens of thousands of people and to wildlife without adequate safeguards. In our addressing the climate crisis and moving to net zero, the chemical industry has a vital role to play in ending the use of fossil fuels, recycling plastics and finding sustainable alternatives, including for the types of forever chemicals depicted in the film.
The chemical industry employs 102,000 well-paid people in the UK, with 24,000 in the north-west alone. The industry is worth £31.4 billion in exports and £34.6 billion in imports, and its products feature in their thousands in the production of goods across the entire economy. Some 57% of those exports are into the EU. The importance of the industry around the country is also spelled out by the productivity of the sector compared with the rest of the economy. In the north-east, it is three times more productive; in the north-west, four and a half times more productive; and nationally, it is twice as productive. We cannot afford to undermine such a key part of our economy.
Chemicals are the subject of REACH—the registration, evaluation, authorisation and restriction of chemicals—the strict European-wide regulations that make sure the chemicals used here are the safest in the world and help to produce the highest quality products.
My hon. Friend rightly says that REACH regulations are central to chemical production not only in this country but across Europe. Does he share my concern, and that of companies in my constituency, that without the same REACH regulations in Britain as in Europe, the movement of chemicals between countries will be inhibited?
My hon. Friend is absolutely right. I know he has a good relationship with the chemical industry in the north-east and has spoken many times on this subject and in support of people who work in the industry. I will come on to make the point that he touches on in more detail.
REACH regulations protect human health and the environment. In chemical regulation, the high standards for chemicals used in our manufacturing also sustain the reputation that encourages people around the world to buy British. Before the current Prime Minister took over, the Government indicated a willingness to negotiate associate membership of REACH, and that is still the preferred option for the industry. The system delivers assurance to the industry and its downstream operations, including our entire manufacturing sector, all of which uses chemicals at some stage of production.
I congratulate my hon. Friend on securing the debate. I too represent a number of chemical companies in my constituency. He is right to draw attention to the administrative benefits of remaining associated with the REACH regime, but also to the cost implications. Companies based in my constituency make the point that they have spent a considerable sum on REACH registration. Having to register for a new scheme at similar cost will make their businesses unviable in some cases, or may lead them to relocate to EU countries.
My hon. Friend is absolutely right. I have been told that estimated costs of between £50,000 and £100,000 per chemical are likely if a UK REACH system is introduced in the way the Government appear to be proposing. I will cover that in more detail as well.
The Government have made clear their opposition to regulatory alignment in general, and given that UK REACH is the default option, they appear to not want to make an exception for the chemical industry. The British Coatings Federation speaks of the practical and real problems that businesses will face with such a system. For example, REACH will continue to apply in Northern Ireland at the end of the transition period, even if a separate UK-based regime applies in the rest of the UK. It is not yet clear how that would work in practice. There is obvious concern that EU and UK REACH will, in theory, apply at the same time in Northern Ireland and will contradict each other.
Let me quantify my hon. Friend’s point. BASF employs 5,000 people in the UK. It estimates that it will have to find up to £70 million to re-register all existing lines. Its alternative is not to offer many of its smaller volume products in the UK, but many are critical to manufacturing. In the car industry, an average of 1,300 different chemicals are used in the production of each vehicle. If many of those products are not available in the UK, car manufacturers will have to import them; it will fall to car companies to register the chemicals and to develop the skills and facilities for storage. This would apply to all chemicals where usage volume was more than 1 tonne per year. Registration costs of £50,000 to £100,000 per chemical are likely to apply, as the Government have confirmed. At that cost, chemical companies would find it uneconomic to continue the production or import of many chemicals. Meanwhile, car producers would find it much harder to compete with EU-located production facilities in the manufacture of vehicles destined for the EU market.
The chemical industry exports 57% of UK-manufactured chemicals to the EU27. A UK manufacturer will have to register its products to comply with UK REACH, as they are made here, and also EU REACH if they are exported into the EU. If our regulations diverge, as the Prime Minister appears to favour, and as may be required as the price of a trade deal with the United States, manufacturers would need not only to demonstrate compliance with both sets of regulations but have two production lines—one to comply with UK regulations, the other for the EU’s. The alternative is to move production to the EU for the EU-compliant product, meaning a loss of exports and jobs from the UK.
I am grateful. My hon. Friend rightly highlights cost issues and the potential need to register through two different regimes, which would bring additional administrative complexity. He will be interested to know that a chemical company in my constituency has also drawn attention to the need for extra testing if there is a need to comply with two different regimes, including extra testing on animals, which I think would be particularly unwelcome to the British public.
I am glad my hon. Friend mentioned the real concern about animal testing, which we can minimise currently because we are members of EU REACH, so testing does not need to be repeated in the UK. The industry has raised that as a real concern, which I will return to.
Both my hon. Friends are right to raise the issue of cost. One company in my constituency is already up against it trying to making any profit at all because the regime is changing for carbon credits. The current proposals mean it will soon no longer receive the relief it currently does. That company is a supplier to other chemical companies within my constituency and elsewhere, so if it falls over and that product is no longer available, there will be a knock-on effect on many jobs across the area. Does my hon. Friend agree that this is another reason that we cannot have the divergence that the Prime Minister seems to favour?
My hon. Friend has explained well that the problem goes across the economy because chemicals are crucial to every manufacturing process.
I was talking about the problem of having to comply with two different sets of regulations and the impact the industry predicts, including a loss of exports and jobs in the UK. Products cross borders multiple times during manufacturing. The integrated nature of supply chains in manufacturing is a big reason why it would be difficult to manufacture in the UK for the EU market in the event of different chemical regulations.
Despite the Government’s presumption in favour of regulatory divergence in general, the Minister may want to say that the Government do not intend to change the regulations that are introduced with a UK REACH. I am interested to hear her comments on that point. The suspicion that divergence is likely has been reinforced by part 8 of the Environment Bill, which gives the Secretary of State the powers to diverge. If the Government do not intend to change the regulations, why have that in the Bill? In his speech on Second Reading this afternoon, the Secretary of State did not mention the section of the Bill that deals with regulation of the chemical industry, which is disappointing because the industry is so vital to the wider economy. Likewise it is disappointing to the industry and those who rely on it that there is no news about a sector deal for the chemical industry.
Perhaps that was not mentioned because the Government have seen sense and realised that they cannot have these tremendous changes. This is about not just day one—when we might say, “We will have the same regulations on day one”—but the future regulations, because every day something changes in the REACH regime, which means one part of a process may no longer be compliant in Europe and Britain at the same time. Therefore, we need to ensure we have common regulation across the piece.
My hon. Friend has explained well why the industry is worried about this: sooner or later divergence leads to the problems that he and I have outlined.
Some 54.8% of cars produced in the UK are exported to the EU, so preferential access to the European market and avoiding regulatory divergence on chemicals is therefore extremely important. The automotive industry uses 13,000 chemical substances, only 1,181 of which are exclusively registered by UK companies. Many of the remaining 98,000 chemicals registered by the European REACH system could need to be re-registered in the UK. According to the Society of Motor Manufacturers and Traders, the cost to the automotive industry alone could be up to £1.3 billion. The Government have not denied those figures in their own analysis. The car industry is deeply concerned about the impact on its competitiveness and on the future of volume car manufacturing in the UK if we move away from a single European regulatory system.
UK REACH will either require access to the chemical testing data, as my hon. Friends mentioned, held by the European Chemicals Agency, or have to repeat and duplicate testing, hence the cost of registration for each substance, which I quoted earlier. Consortia of European companies own most of the data, and UK companies pay a fee for access to the data, which is held by the ECHA. Selling access to the data is a commercial decision not governed by EU data sharing rules.
The Health and Safety Executive, which is due to become the UK chemicals agency—perhaps the Minister can clarify when that will happen—will need to build its own database if it cannot access the ECHA database. According to the plans for UK REACH set out in the European Union (Withdrawal Agreement) Act 2020, basic data about the market and each substance will need to be submitted within 120 days of the end of transition, while full information appropriate to the registrant’s tonnage band will need to be submitted within two years. It took 10 years to build the ECHA database. How can that be replicated in two years, given that many companies will have to carry out testing from scratch and many importers are not specialists in the chemical industry?
Concerns have also been raised about the capacity of the HSE and the legal framework it will follow. It could either repeat the work of ECHA or rely on the work ECHA has carried out. The former would be hugely expensive, time consuming and dependent on a level of scientific expertise that may not be available. The latter could leave it open to challenge on the grounds that it should not be reliant on EU evidence and should have made its own assessment of risk. Either approach is potentially problematic.
An additional concern of the industry is that, as some registration of chemicals in REACH has relied on animal testing, a UK REACH would mean the introduction of animal testing—a point my hon. Friend the Member for Stretford and Urmston made earlier. Steve Elliot, the chief executive of the Chemical Industries Association, said
“The EU remains our biggest customer and supplier, so securing a tariff-free, frictionless free trade agreement is essential. Most crucially creating a parallel UK regulatory regime for chemicals, whilst still needing to meet the legal requirements of our biggest market place under EU REACH will, in our view, bring no commercial or environmental benefit and could put businesses and jobs at risk right across the country, including seeing a whole new programme of animal testing, something that none of us wants to happen.”
In a written answer on 4 February, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Taunton Deane (Rebecca Pow), said that UK REACH will maintain the “aims and principles” of EU REACH. In the light of the industry’s importance, is that not an argument for staying part of the current system and avoiding the problems of implementing a separate version? In a recent British Coatings Federation members survey, 90% of members expressed their fear of having a duplicate set of chemical regulations through a UK REACH and all the extra bureaucracy and costs that would bring. The BCF said:
“We need government to understand the complexity of the integrated chemicals supply chain and come up with an appropriate free trade deal to prevent—or at least minimise—substantially added costs or disruption to our members.”
I place on record my thanks to the Chemical Industries Association, the British Coatings Federation, the Chemical Business Association, the Society of Motor Manufacturers and Traders, the ADS group, the CHEM Trust, BASF and multiple trade unions, as well as the specialists of the House of Commons Library. They have all helped with this complex, technically demanding subject. They have all helped confirm just how serious the issue is for our economy and for safety, too. I hope the Minister and her colleagues are listening to their advice.
Steve Elliott of the CIA said:
“The isolationist approach doesn’t work for us. I can’t think of a member company who isn’t exporting at least 50/60 per cent of its production.”
We have to remember that most of that exporting is into the EU. ADS gave me the example of potassium dichromate, which is a crucial chemical coating that protects aircraft structures from corroding. The example makes Mr Elliott’s case: there is no viable alternative to the use of that chemical in aircraft structures. It is produced in the UK and marketed in the EU. It is registered with REACH, so if the UK is removed from REACH, the registration would become non-existent and it would not be possible to import or sell it in the EU, to manufacture the mixture or to apply it to aerospace components. That would cause huge commercial damage to the aerospace industry in the UK and in the EU.
That story is repeated many times for UK-manufactured chemicals, so what is the plan for products like potassium dichromate and for aircraft manufacturing? What is the plan for the regions that rely on the chemical industry for their productivity? What is the plan for all other industries that rely on chemicals in their processes? What is the plan for multiple cross-border manufacturing supply chains? What is the plan for exports and imports, for safety, for data analysis, for testing and scientific expertise, including animal testing, for the creation of an alternative database, or for access to the existing ECHA database? What is the plan for capacity and expertise in the HSE? What is the plan for a sector deal? Tell us, Minister, what is the plan?
I am very happy to sum up for the Scottish National party in this important debate, whose importance belies its attendance. In the first instance, I echo the sentiments of the hon. Member for Sefton Central (Bill Esterson), who secured the debate, by pointing out that little or no manufacturing takes place without almost total dependence on the chemical manufacturing sector and the regulation that underpins that—both domestically in the United Kingdom and, just as importantly, around the world.
Across all manufacturing sectors, we see the clearest indications from stakeholders, whether commercial, trade union or in processing, that we live in a world of very integrated international supply chains, and we have done for some time. They are dependent on regulatory alignment. It is also worth pointing out the amount of research and development money that goes into the chemical industry, much of it private—how that interacts with our higher education sector, the role the United Kingdom plays in that and how we discharge that role with our international partners, many of whom are in the European Union.
The hon. Member mentions research and development, and we are of course dealing with multinational companies with plants all over the world. If they are going to do research and development, surely they will do that in areas where they have common regulations such as REACH, rather than in a future British chemical industry, which could be a backwater.
The hon. Member is right, and the risk that the United Kingdom runs in seeking to pursue some alternate regulatory framework is exactly as he sets out: industry will produce its products to be compliant with the regulation consistent with the size of the market opportunity—it is not a blanket approach. If a market is subject to a particular regulatory framework, but that market is not big enough for the industry to comply with the framework, they simply will not comply and those products will not be available in a post-Brexit, post-REACH-regulation United Kingdom.
As we roll the dice on this issue, it is important to understand the slightly rarefied position occupied by the chemical industry in the United Kingdom. It has a turnover of £56.6 billion, but a very enviable gross value added of £19.2 billion. The Government must tread carefully and pay close attention to the members within trade organisations, such as the Chemical Industries Association and others, who are very clear with their call for regulatory alignment.
We have heard an awful lot about the cost of the re-creation of some successor to EU REACH, which is as yet unspecified, but I genuinely, thoroughly believe that the point is moot. As Members have said, the industry will offshore the UK manufacturing of chemicals. Other industries within the UK that rely on the products of the chemical industry will be subject to buying from another market. That will in all likelihood be the European Union, so we will then face the farcical situation of having dispensed with REACH regulations here—which will have cost us our industry, or a large part of it—and of then being in possession of the very same standard of product purchased from the EU, just without the £56.6 billion of turnover, or a large part thereof, and the jobs that went with it. The stakes are no lower than that! Having said that, were the UK to press ahead with some parallel regulatory framework for chemicals, the resultant animal testing, as others have mentioned, would be held in contempt by society, and rightly so. It is important to bear that in mind.
The regulation and supply of chemicals is yet another area of huge complexity in that Brexit ambition. Brexit will have an impact on the chemical industry driven by changing regulatory requirements, as others have mentioned, and by other trade barriers, potentially including tariffs and quotas. The REACH chemicals regulations are but one example of directly applicable EU legislation that is not straightforward to copy across into UK law. The principal objective remains, however, to ensure that those regulations still have priority in a post-Brexit United Kingdom dynamic. That is because the regulations rely on the European Chemicals Agency and are closely tied to the needs of the single market. The UK and EU chemical industries both want trade deals to ensure frictionless trade and regulatory consistency between the UK and the EU. That points to the complex supply chains that exist for the manufacturing sector.
I am very glad that the hon. Member for Sefton Central, who secured the debate, mentioned potassium chromate. As a former aircraft engineer, I still remember keenly the sweet smell of that sticky green substance which was difficult to get out from under the fingernails. Its role in preventing dissimilar metal corrosion in aircraft is well known and vital. That had the effect of taking me slightly down memory lane.
In conclusion, as a Scottish and a Scottish National party MP, I have no hesitation in supporting the ambitions of the hon. Member. The UK is a key global player in the chemical industries just now. As far as I can tell, the only chemical company in the UK in the top five chemical companies in the world is INEOS, which has a major presence in Grangemouth in Scotland. The Chemical Industries Association also covers the pharmaceutical industry, and I am very privileged to have in my constituency of Angus an extraordinarily large and important GlaxoSmithKline plant. Nowhere does interdependence and mutual reliance on common regulation apply more than in that plant.
INEOS has been in my constituency as well, but it is actually closing down a plant there; the plant has finished because it is past its use-by date. INEOS can invest billions of pounds in the middle east, but nothing in Britain at this time. For me, the main issue is what the hon. Gentleman has talked about: the integrated nature of the chemical industry. The industry is losing a key component; if there are changes in regulations over time, more and more of those parts will disappear. We will therefore be reliant on the imports that the hon. Gentleman mentioned.
Indeed. I am not here to defend or uphold the commercial decisions of INEOS, but what the industry more generally needs at this minute is clarity and certainty from Government, as far as that is possible. I look forward to the Minister explaining how the Government will give the industry the confidence and certainty that will enable them to invest in plants in Scotland and the rest of the UK. Those plants’ return on investment may take decades, and it is extremely important that we give them every opportunity to invest in infrastructure and jobs, with the attendant benefits that those bring to our communities.
Over and above the material contemporary considerations of the chemical industry, this issue is important for the livelihoods of many people in Scotland and in my constituency of Angus. Of course, industrial production of chemicals first began in Scotland, with the industrial production of bleach just north of Glasgow. We have moved a long way in the intervening 150 years, and I would hate for us to start moving back as a consequence of Brexit.
It is a pleasure to serve under your chairmanship this afternoon, Mr Sharma, and I pay tribute to my hon. Friend the Member for Sefton Central (Bill Esterson) for having secured this important debate. I also welcome the Minister to her new position; I know she takes a keen interest in green issues and in waste, and I look forward to hearing her response on chemical regulation in a post-Brexit UK. I expect it will be very interesting.
This has been an informative debate. Obviously, we have experts in the room: I bow before their expert knowledge, which has brought things together much more coherently for me. I will leave the Chamber with much more knowledge than I came in with, for which I thank the Members who have spoken.
One thing that we already knew before coming here was that our departure from the European Union would change how we do business, how our country functions, and how we ensure that chemical regulation in the UK is going to be fit for purpose in the years ahead. Although this may seem like a niche issue, it has been clearly articulated that chemical regulation is going to have a wide impact on the UK as a whole, so we must take that on board and make sure we deal with it carefully. We on the Opposition Benches echo the concerns of the chemical industry and the Royal Society of Chemistry. On this and many other issues, we ask the Government to be wise and careful when it comes to diverging from the standards and regulations that consumers, industry and our global partners have come to expect here in the United Kingdom.
As we have heard, chemicals manufacturing supply chains are well established, with materials often crossing the channel several times for some of the most complex products. Even the most minimal tariffs that would apply if the Government crash us out with no deal, combined with the requirement to respond to separate regulatory regimes and the need for documents to precede foods at borders, would have a negative impact on future manufacturing supply chains and strategies in the UK.
The Government are starting their approach to the coming months from the negotiating position that there will be no dynamic alignment with EU regulations in a new UK-EU trade deal, and have indicated that divergence will feature heavily. I am particularly concerned that the Government have not indicated an intention to seek close co-operation with the European Chemicals Agency. Regulatory divergence has the real potential to severely impact the quality and strength of public health and environmental protections. We should be levelling up, not cutting ties.
As the Royal Society of Chemistry and others have said, it is important for the Government to be conscious of divergent sources of data. Harmful divergence could occur if the evidence base is not harmonised, so a new and binding legal agreement is needed in order to continue sharing commercially sensitive data between authorities in the UK and the European Chemicals Agency.
I reiterate to the Minister and to Members on the Government Benches that hurried divergence, done in order to pretend to the British people that everything will be done and dusted by the end of 2020, will be dangerous and reckless. If all we see are quick, short-term economic international trade wins or speedily rolled-out innovations, the people out there will know what the Government are up to. I do not want lowered environmental protections or a risk to public health in Banbury, in Newport West, or in any other part of our United Kingdom.
I share the concerns of my colleagues on the Opposition Benches, particularly my hon. Friends the Members for Sefton Central, for Stockton North (Alex Cunningham) and for Stretford and Urmston (Kate Green), as well as those of the hon. Member for Angus (Dave Doogan) —it is a shame that his constituency does not also begin with an “S”; that would have been much more alliterative—about the economic impact on British industry if divergence leads to negative consequences for our ability to trade products with the European Union.
The Government also need to be careful about what their approach means for business and industry, because they could land up doubling the burden on business and industry through masses of extra regulation. For example, the REACH regulation refers to the EU regulations on chemicals, as has been clearly articulated by all Members who have spoken this afternoon. The extra cost to UK businesses of duplicating EU REACH in the United Kingdom after the transition period is estimated by the Chemical Industries Association to be in excess of £1 billion, without any environmental benefit and potentially forcing duplicate testing. We call on the Government to do all they can to avoid that sort of duplication and deliver the essential solutions required to grow the environmental, social and economic performance of our country.
I pay tribute to the Chemical Industries Association for its work on this issue. It has made clear that securing a deal with the European Union that guarantees tariff-free trade, regulatory alignment and access to skilled people continues to be of critical importance for the chemical industry, which will rely on our future relationship being as frictionless as possible.
I hope the Minister will address many of the concerns highlighted today, particularly about the willingness to inflict damage on our industries through a policy of divergence. I thank my hon. Friend the Member for Sefton Central for having brought this issue before the House, and look forward to working with him and the sector on this important issue in the weeks and months ahead.
It is a great pleasure to serve under your chairmanship, Mr Sharma. I welcome the hon. Member for Newport West (Ruth Jones) to her place, and look forward to many happy hours spent together discussing interests that have always engaged us both, particularly those involving the environment and food waste.
I congratulate the hon. Member for Sefton Central (Bill Esterson) on securing this important debate. As he made clear, our chemical sector is world leading and vital to a wide range of other key industries, such as pharmaceuticals, automotive and aerospace. He gave some good examples from his own constituency and demonstrated his knowledge of how important that is, as did other Members present. We all know that the chemical industry is an important one, and want to ensure it continues to succeed.
In 2018, the total trade in chemicals in the UK, including chemical products, was worth £60.2 billion. The UK chemical sector directly employs more than 100,000 people. That sector is an important part of the economy in all the UK regions, with some major chemical clusters that are, unsurprisingly, represented in the Chamber today. They include Teesside, Humberside, Southampton, Grangemouth—mentioned by the hon. Member for Angus (Dave Doogan), whom I welcome to his place—and north-west England, which has the highest number of employees in the sector, with some 24,000 people in the region working in the chemical industry.
Leaving the EU provides us with a unique opportunity to develop a regulatory environment that will not only deliver the high standards mentioned by the hon. Member for Newport West, but be flexible according to our current and future needs. Now that we have left the EU, our priority is to maintain an effective regulatory system for the management and control of chemicals, to safeguard human health and the environment, and to respond to emerging risks. We need to ensure that our chemical industry continues to flourish in the UK and abroad, building on our strong trading links with the EU and seizing new export opportunities now we have the freedom to trade with the rest of the world.
I, too, welcome the Minister to her place. I hope that she will accept an early invitation to Teesside, which I extend to my hon. Friend the Member for Newport West (Ruth Jones). As a lawyer, the Minister knows that the EU REACH regulation is extremely complicated. What on earth are the impediments to simply adopting it? What is the additional flexibility that she talks about that we actually need to trade with the rest of the world?
As a lawyer, I tell the hon. Gentleman that that is an extremely long and complicated question, to which I will endeavour to provide some of the answers, but not all, because, as he knows, it is a live negotiating situation. I recognise that that brings uncertainty for business—I really do—which is uncomfortable for many of us, but it is important that the country voted to leave the EU and through various—[Interruption.] The hon. Gentleman has been here for the last few years, as I have.
Through various emanations, we have reached a position where we are definitely leaving the single market and the customs union, and we will no longer participate in the ECHA or the EU regulatory framework for chemicals. I will set out what the Government’s position is in the immediate future. I ask the hon. Gentleman to accept that we do not have all the answers, but I emphasise that my door, and the door of the Minister with responsibility for the issue, will be open as we go through the negotiations this year.
It is helpful and candid of the Minister to clarify that the Government do not have all the answers. In pursuit of those answers, may I ask whether the Minister and her officials will give due cognisance to the fact that the scale of the European chemical industry, and the regulation that underpins it, is the global benchmark? A UK post-Brexit chemical industry would divest from that at its peril.
In many ways, the hon. Gentleman will find that we are on exactly the same page, so I ask him to listen to the rest of what I have to say. We can then discuss the position as it emerges in the negotiations this year.
As I said, we are leaving the single market and the customs union, so we need to prepare for life outside at the end of this year. Many in the sector have already started to prepare and we will help them as much as we can. First, we must create our own independent regulatory regime, which is called UK REACH, as we have heard. Hon. Members will note that that is not a million miles away from the name of EU REACH. That will ensure continuity and minimise disruption for businesses and consumers, and will give us the freedom to do things differently where we consider that in our best interest. UK REACH will be our own framework but will retain the fundamental approach of REACH, including its aims of ensuring a high level of protection for human health and the environment, and of enhancing innovation and competitiveness. We have developed transitional measures, such as grandfathering and downstream user import notifications, that address the industry’s concerns about maintaining continuity of supply between the UK and Europe.
The building blocks of REACH will all remain. Through the Environment Bill, we will make provision to allow us to amend REACH in future to ensure that our chemicals management remains fully up to date. All change will remain consistent with the fundamental aims and principles enshrined in EU REACH. There will also be a series of protected provisions that cannot be changed, such as the last resort principle on animal testing, which will be included in the Environment Bill, as has been said. The UK will, of course, continue to be at the forefront of opposing animal tests where alternative approaches can be used. We have led the way on that in the EU system to date.
I recognise the concerns that several hon. Members have raised during the debate about the UK diverging from the approach taken in the EU to the regulation of chemicals, which are obviously shared by all our stakeholders. We will not diverge for the sake of it. If we diverge, it will be done in the best interests of the UK and the environment, and of course we will take account of the impact on industry. What matters is that the decisions we take will be our own, reflecting our new autonomy. Robust scientific evidence lies at the heart of the decisions we take, and that will continue, as provided for in the UK REACH legislation. As I said, we are continuing to develop the proposals, to make sure that we take decisions transparently and with stakeholder engagement. I am keen that we go forward in that vein.
I bear in mind what the Minister is saying, but it frightens the life out of me, because the regulation changes every day. I do not know how we will manage to keep pace with that in Britain. Industry will incur considerably greater costs as a result of the changes. What assistance will the Government give to chemical companies and the chemical industry as a whole to overcome the additional burden that the Government are placing on them?
While I am unable to tell the hon. Gentleman exactly where we will end up, I am also unable to answer that question as fully as it deserves. If I may, I will continue to tell him where we are now. As matters progress with the negotiations, I remain willing to talk to him about specific industry difficulties, and I am sure the Department for Business, Energy and Industrial Strategy will too.
I am grateful to the Minister for giving way. She says that she cannot answer the questions, but they are the questions that the chemical industry is asking us. We are talking about a matter of months before the changes actually kick in and affect industry in this country. That involves thousands of jobs in my constituency and tens of thousands across the country, so I am naturally anxious, and I can understand the industry being anxious as well. When are we going to get some answers?
I understand the hon. Gentleman’s anxiety. What I will say to reassure him, in so far as I can in a live negotiating situation, is that we will avoid change for change’s sake. We will do our best. We are fully cognisant of the need to minimise the burdens on business. That lies at the absolute heart of all that we are doing to put UK REACH in place.
Let me give the hon. Gentleman an example. In building the UK REACH IT system, we have made sure that it will work very much like the ECHA REACH IT system, including the same software requirements and many of the processes that businesses have been using and understand. I am aware that we will require businesses to provide us with the data that supports their registrations. I understand the concern that that may not be as straightforward as they would like and may generate costs. That is why we have introduced the transitional arrangements that I mentioned earlier, which give businesses two years, starting from the end this year, to provide that information. We will keep those timeframes closely under review.
We are often asked why we need the data and why information that has already been provided to the ECHA needs to be reprovided to UK REACH. In short, we need it because we will not be able to rely on the fact that the data has already been sent to the ECHA. Registration is how a company shows its understanding of the hazards and risks of a chemical. It does not mean that the ECHA has, in legal terms, approved a chemical or endorsed it as safe. The data is necessary for any regulator, such as the Health and Safety Executive, to operate an effective regulatory regime, to understand the hazards and risks of chemicals, and to ensure their safe use. We are making sure that the HSE as the UK regulator, the Environment Agency and the Department for Environment, Food and Rural Affairs have the resources and evidence they need to ensure the safe management of chemicals and to protect public health and the environment.
With the UN projecting a doubling in the size of the global chemicals industry by 2030, it matters more than ever that the UK continues to be a world leader in the management and regulation of chemicals. Our internationally recognised scientific expertise and evidence-led, risk-based approach give us a strong and influential voice as we advocate for ambitious global action on chemicals and waste management after 2020.
I want to finish by saying something about the chemicals strategy we are developing, which will set out our priorities and approach to domestic regulation now that we have left the EU. It will be our first such strategy for 20 years. We aim to drive sustainability, circularity and innovation in the chemicals industry, while protecting human health and the environment from harmful chemical exposure. A call for evidence will be published very shortly—this spring—and we will then undertake a public consultation on a draft strategy before its final publication, which is scheduled for 2021-22. We genuinely want to hear from the industry.
I am grateful for some of the answers that the Minister has given, but one of the points she has not addressed is exports. Some 57% of UK chemical exports and 54% of car exports go to the EU market; the role of chemicals with the correct regulatory registration will be vital, as will approval for the European market. Will she address the export problem that is faced both directly in the chemical industry and, more generally, in industries whose products contain chemicals—not just the car industry—in having these two systems?
As the hon. Member says, the export market is very important. There are exports worth £28.3 billion, with 57% of that going to the EU and 43% going elsewhere. It is clearly important that we get to the end of our trade negotiations as soon as possible, so that certainty can be provided. He knows as well as I do that the situation is fluid at the moment, and I am unable to give him all the answers he seeks. What I can say is that we have a new and exciting chemicals strategy, on which we will be consulting.
I have a very simple, straightforward question. Will we accept European REACH regulations for imported goods, or will they also have to be compliant with the UK REACH regulations? Will we just accept that products coming in are fine because they are covered by EU REACH, when we have our own independent regime as well?
Yes, absolutely. I undertake to write to the hon. Gentleman with the correct answer. It is really important that we do not misspeak at this point of a live trade negotiation. I am also conscious that the matter is not directly within my brief but within that of the Secretary of State for Environment, Food and Rural Affairs, who is currently leading the debate on Second Reading of the Environment Bill in the main Chamber. I do not want to answer that question without full instructions, for which I apologise.
I thank the hon. Member for Sefton Central for securing a debate on this important industry at this critical time in the negotiations and for stressing that it is important that we do not diverge for the sake of it, and that we ensure we have a regulatory regime that works for us and fulfils all the aims we hope for, and that makes life as easy as we can for people who work in the chemical industry, including those in his constituency.
I thank all hon. Members who have taken part in the debate for their comments. I appreciate the Minister’s difficulty in giving fuller answers, and I take her point that it is important not to speak in the middle of negotiations. I am glad that we are in the middle of negotiations and that they have actually started, because the reports lead us to question whether we are even at that stage. Time is rapidly running out—an important point that needs to be reiterated.
The Minister talked about divergence. Is not one of the problems that once we give ourselves the ability to diverge, the assumption is that clarification can be given to enable the import and export of chemicals, or anything containing chemicals, only through having two sets of regulations? That is one of the main reasons why the industry is so concerned about moving away from being part of EU REACH, either as an associate member or through some other close relationship. I encourage the Minister to pursue those avenues, because the chemicals industry and everybody who relies on it need clarity.
Investors need certainty. They are making decisions about where to locate and whether to continue investing in this country or to put alternative arrangements in place, particularly in the EU27, with a cost for jobs and an impact on our economies, especially in the nations and regions of the UK outside London. It is therefore vital that all attention is given to getting this right in a way that protects and enhances our industry, and does not undermine it.
I thank the hon. Member for Angus (Dave Doogan) for his comment about potassium dichromate. I hope that was not the cause of the injury he described—it seems a little unlikely. He made some excellent additional points, as did my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Stockton North (Alex Cunningham). I thank my hon. Friend the Member for Newport West (Ruth Jones) for her contribution.
The chemical industry is fundamentally important for pharmaceuticals and across manufacturing. Anything we do to undermine it we do at our peril. It is a high-profile, high-quality and world-leading industry in the UK, and every effort must be made to listen to the concerns being voiced by the relevant organisations. There is unanimity in what is being said across the piece by the industry, trade unions and the environmental lobby—it is almost unheard of. The Government will do well to take that on board. I am glad the Minister said that if a longer timescale is needed to get this right, the time will be taken, but to be frank the industry needs assurances now; it cannot wait to make decisions. I hope the Minister will take on board all the points made this afternoon.
Question put and agreed to.
That this House has considered regulatory divergence in the UK chemical industry.