Tuesday 14 June 2022
[Sir Charles Walker in the Chair]
Inshore Fishing Fleet
I beg to move,
That this House has considered the Inshore Fishing Fleet.
It is a pleasure to serve under your chairmanship, Sir Charles. I should declare my interest as treasurer of the all-party parliamentary group on shellfish aquaculture and point the House towards my entry in the Register of Members’ Financial Interests.
There can be no more picturesque sight than that of our fishermen going about their day’s work, and for residents of and visitors to south Devon’s coastal communities, it is a regular occurrence to see nets cast, pots raised, boats launched and catches landed. That is undoubtedly a familiar view across the coastline of the United Kingdom, and one that presumably has changed very little—with the exception of new technologies—over the past few centuries.
I shall focus my remarks on the inshore fishing fleet, which I am defining as vessels generally below 24 metres within the 12-nautical-mile limit, and based on the value of the vessel and gear type. I am fully aware that there is no specific definition of the inshore fishing fleet, and that one of the few benefits of the common fisheries policy was not to provide an exact explanation or definition, but to include a 10-metre dividing line for vessels under that, which were removed from having sizeable administrative burdens placed upon them. Colleagues might wish to expand on that definition.
As ever, I believe that there is significant opportunity for our coastal communities to do more for our fishermen, and levelling up is about not just creating new opportunities, but shoring up existing and established sectors such as the fishing industry. If there is to be any purpose to the debate, it is to raise awareness and to call for greater clarity and co-operation between the Department for Environment, Food and Rural Affairs, the Marine Management Organisation, the Maritime and Coastguard Agency, the Association of Inshore Fisheries and Conservation Authorities—the IFCAs—and our fishermen, as well as to highlight the legitimate concerns held by the sector about some of the new regulations, requirements and technologies that are being foisted on this noble industry.
It is absolutely not too late to make the changes necessary to enable us to enhance confidence and certainty. If successful, the Government would have simple wins that helped to create jobs, investment and opportunity across the UK’s coastal communities, as well as fulfilling part of the national food strategy and achieving some of their core levelling-up objectives.
From the outset, I should make it clear that I consider the Minister’s efforts on behalf of us coastal MPs exemplary. She has displayed typical patience and tolerance towards me, and I suspect others, and my weekly—if not daily—questions and inquiries on behalf of the fishermen of south Devon. There is cross-party support for and consensus on her hard work and determination to see the sector flourish, so today’s debate, and the attendance of right hon. and hon. Members from across the House, should only strengthen her arm. I hope she will listen carefully to the suggestions that we make.
I am going to tackle four areas, and for Members who might want to intervene, this is the order in which I shall do so: first, the fuel crisis; secondly, the MCA under-15-metres code; thirdly, the spatial squeeze; and, fourthly, the catch app and the inshore vessel monitoring system.
The fuel crisis is perhaps one of the most serious matters facing our fishing sector. The recently published Seafish impact assessment details the rising impact of fuel prices on the fishing sector. It makes for grim reading and details the step-by-step impact of fuel prices versus the economic viability of UK fishing fleets. After an incredibly difficult two years, this shock increase is only likely to sail more fleets into the red and see them suffer operational losses. The worst-case scenario suggests that two thirds of the UK’s fishing fleets might not be able to cover operational costs by income, and even the most optimistic scenario shows that half the fleet’s operating profits might drop into negative values.
We cannot underestimate the impact that the fuel price crisis will have on our fishing fleets if the Government fail to respond. There are steps that individual vessels and skippers can take—from optimising gear, fishing methods and vessel propulsion systems, to improving maintenance both of vessels and hulls and of engines and auxiliary engines, as well as improving operational husbandry—but that costs money. Businesses might usually be able to ask for or to source investment, but that has been proving incredibly difficult due to high prices, poor returns and a lack of certainty.
Let me make two proposals to mitigate the impact of rising fuel prices on the fishing industry. First, the UK Government and DEFRA have created the UK seafood fund—a fund of £100 million set up to support the long-term future and sustainability of the UK fisheries and seafood sector. This fund should be repurposed without the need for match funding in order to help enhance and retrofit vessels with green technology.
Secondly, the super-deduction scheme, announced in the 2021 Budget, was a stroke of genius and was applicable to fishing operators purchasing new vessels. However, it did not support the retrofitting and upgrading of vessel machinery to make it greener and more fuel efficient, so the scheme ought to be amended in order to help at this difficult time.
Anecdotally, I received a message yesterday from the crew of a trawler based in Brixham, in my constituency, that had just been out on an eight-day voyage. Because of the rising cost of fuel, they returned after eight days with the smallest amount of profit they had made in quite some time, which equated to each of the eight members of the crew earning £32 a day. If we continue in that direction, following that model, our fishing fleets will be totally unsustainable and, at a point when we are worrying about food security, they will not be able to even go to sea to help address the food security crisis we face.
Does my hon. Friend the Minister support the two suggestions I have made, and will she speak to the Chancellor about them? Has her Department explored emergency schemes similar to the European maritime, fisheries and aquaculture fund launched by the European Union, and whether there are any lessons to be learned from that scheme?
Last year, I went to sea on a Brixham trawler, which was an extraordinary opportunity, and I saw at first hand the hard work it takes to provide fine British seafood for our dinner tables. This year, I am set to head out with the Salcombe crabbers to learn more about that sector. Going to sea comes with the most extraordinary risk, and it is absolutely right that we do nothing to reduce the levels and expectation of safety. Fishing is one of the most dangerous occupations in the UK, and in the last 10 years there have been, tragically, 42 deaths on vessels of less than 15 metres.
No one here wants to see any loss of life, and safety and security are vital, but there is a concern about the new MCA safety code, which is causing considerable amounts of consternation and concern for a large number of vessels, skippers, owners and crew. I understand that the National Federation of Fishermen’s Organisations has already raised with the Under-Secretary of State for Transport, my hon. Friend the Member for Witney (Robert Courts) the need for a review of the code’s implementation. It has raised a number of points that have also been brought to my attention by the likes of Beshlie Pool from the South Devon and Channel Shellfishermen, and by fishermen in Dartmouth, Brixham, Salcombe and Torbay. These problems include, but are not limited to, the roll test stability assessment; previously certificated vessels being asked to alter their original design; the time frame in conducting these tests being both lengthy and costly; the language in the code of practice being undeniably complicated and vague; and the engagement of surveyors being poor and failing to reassure those who fear they may lose their jobs, livelihoods and vessels.
There are solutions. The MCA should revise its roll test stability assessment to include either the heel test or the offset load test. Water freeing arrangements should be considered on a risk-based, individual approach by the MCA. The MCA should state a turnaround time for these tests; the NFFO has suggested a week, which I think is perfectly reasonable, as do industry representatives. Improved guidance and consolidated information need to be written so that it can be more easily understood and implemented. Finally, the MCA should train its surveyors to work hand in hand with fishermen to understand that these changes have a significant impact on them and on their jobs. I say again, no one wants to reduce safety at sea, but we must take fishermen with us rather than bamboozle and confuse them with non-sensical generalised tests.
I am positive about the future of fishing in the UK, but I frequently meet angry and depressed fishermen whose mental health is suffering and who, in many cases, are considering packing it all in. It is ironic that with the current expected changes being forced upon us, many fishermen are taking increased risks and working in rougher conditions. That is the exact opposite of the what the MCA code seeks to do. There must be better engagement.
In the Minister’s response to my letter, which I received yesterday and I am grateful for, she mentioned the co-operation the MCA has had on the issue with the main UK fishing federations, the Royal National Lifeboat Institution, Seafish and the Shipbuilders and Shiprepairers Association, and that there had been a roadshow consultation. That is all very welcome, but the industry is now pushing back and we would do well to listen to its legitimate concerns.
I know that the matter falls into the brief of the Under-Secretary of State for Transport, but what engagement has my hon. Friend the Minister for Farming, Fisheries and Food had with him on this point? What scope for reform and amendment does she think is available, given the sizeable pushback from the industry? As Members might know, I am very keen to see the Hampton principles adopted at every level of Government, and that we can still maintain safety at sea.
Like so much of the Government’s policy when it comes to the environment, we have an incredibly strong record. We need only look at the fact that 38% of UK waters are now in designated protected areas, which equates to 371 marine protected areas across the UK—to say nothing of the highly protected marine areas that will be identified by the end of this year. Like safety, protecting our coastal waters is not just important but a necessity. Well-managed coastal waters are as effective a carbon sink as anything we might find on land. In fact, I could bore for Britain, Sir Charles, about the role that live bivalve molluscs play in sequestering carbon and cleaning our waters, but I can assure you that that is for another day.
The marine protected areas and highly protected marine areas are now more effective at sequestering carbon, but there are now more carbon capture areas, dredging sites and wind farms, and we will only squeeze our fishermen into smaller and smaller areas, as well as encouraging the intensification of fishing over smaller ranges. There is a unique example of that happening in the North sea, where in 2003 we shut our waters to demersal fishing in order to protect spawning cod. The then Labour Government thought they were doing the right thing in 2003—I am always delighted to point out a Labour Government’s flaws—but scientists at the Centre for Environment, Fisheries and Aquaculture Science thought that they did exactly the opposite. We closed the ranges and, as a result, the cod that we sought to protect was caught immediately after the seasonal closure. The demersal fleet was pushed into another area, where immature fish were caught and subsequently discarded, and the Dutch fleets were pushed into new fishing grounds, where they enacted extensive damage to the biodiversity and ecosystem.
Historical fishing grounds come with a responsibility that fishermen take seriously and understand how to manage. The Government must recognise the real-world consequences of squeezing and shutting down historical grounds, and the impact that this will have not just on the industry but on fish stocks and our ecosystems. The key is to listen to fishermen and to understand that their knowledge is not born out of guesswork; it is a product of daily engagement and understanding, and sometimes it has come about over centuries of working in the sector.
I agree with the NFFO that we should conduct a careful, site-by-site analysis of how conservation objectives for each site could be achieved while minimising the impacts on the fishing industry; that we must ensure closer dialogue with those who would be affected by management measures; that we need to implement close collaboration in the design of those measures; and that we have to maintain an adaptive approach. If we squeeze our fishing grounds into small areas, we will only send our inshore fishing fleets further out, thereby facing greater danger, rising costs and diminishing fishing grounds.
Does the Minister recognise that Scotland has found the right balance in this area? We can learn from its example in this instance—that is not something I thought I would be saying, but it is true. Does the Minister also recognise that, in some MPAs and HPMAs, fishing can assist the enhancement of biodiversity and carbon sequestration? What exemptions could be allowed to see fishing operations—perhaps in the aquaculture sector—take place in those areas?
Technology is a great leveller. We might groan and complain about the advancements, but who among us has not seen it improve our lives? Now is the time for the fishing sector. Both the inshore vessel monitoring system and the catch app have been well voiced for both the positive and the negative. On the positive side, I recognise the value of these systems. Ultimately, the technology will help improve our data and allow us to maintain our arguments about the responsibility and manner in which our fishermen look after our waters. That technology should not be feared, but embraced where necessary and when sensible.
I happen to believe that the technology is highly relevant for vessels over 10 metres. However, I am totally unsure about why the Government and the MMO are pushing for the smallest vessels—those under 10 metres—to install this technology. Open-deck vessels that are launched from beaches run the risk of having their equipment stolen, as the devices are fitted and not portable. The issues with signalling that we all experience across our coastal communities are already proving difficult, and mean that these fishermen fear inadvertently breaking the law and run the risk of fines if they accidently get it wrong. We forget that, across the country, these are not large-scale operations but individuals and their boats. We must ensure that we are working with them and listening to them. With regard to the IVMS technology, will the Minister please offer an exemption to boats under 10 metres before the August deadline? Not only is the technology expensive but, given the sporadic fishing schedule of the under-10s, IVMS offers neither good data nor value for money. As I have said, the only good part of the CFP was perhaps the exemption of under-10s from burdensome requirements.
On the subject of money, I understand that now there is only one approved supplier of the IVMS technology and that prices have been inflated grossly. The Government have offered £650 for the equipment and installation but, all too often, installation is not covered by the grant we are now offering. So, to my final questions: first, does the Minister recognise that the prices have been inflated and that installation costs are frequently being added to the £650, and what might we be able to do about that?
Secondly, on enforcement, I understand that the data collected will be interpreted by the local IFCAs, but that there is no national standard or procedure in place to ensure that they act appropriately, proportionately and consistently in their use of data. Will the Minister clarify that and say that there is a national response?
On the catch app, I wrote recently to the MMO about the need to address some of the concerns. From the response I have had from Mr Michael Coyle, it now seems that we have a system that will allow people to enter their catch to the port nearest to where they land—rather than the actual port, if it is not listed in the app—and that will accept a 10% margin of tolerance and record the data offline and transmit when back in signal. Those are positive steps, which provide some reassurance to people who were deeply worried that they will be penalised and fined. Simple though it may sound, we must improve communication and ensure that the MMO, DEFRA and fishermen work together in a collaborative manner that reassures them all.
I am often accused of speaking only about fishing, and I am sorry not to have disabused people of that view, but I am proud of the fishing community in my patch. I see their value and what they achieve in south Devon. I know that they have an enormous opportunity in the role they have to play in levelling up our coastal communities and ensuring that jobs, investment, training and skills can all come in the right direction in the right place.
I suspect that your patience with me has worn out, Sir Charles, so I will leave you with a final cast: our land and seas can look after us, but only if we listen to those who know it best, those who for centuries have toiled the land and sailed the seas. Now, at a time of great need, we would do well to place our faith and support in those who can address the many challenges that we face.
It is good to see you in the Chair, Sir Charles.
I thank the hon. Member for Totnes (Anthony Mangnall) for introducing the debate. If success were measured in words per minute, there would be no problems left for fishing. I endorse many of the points he made and will repeat them. I suspect that there will be cross-party agreement on many of the concerns and, indeed, many of the suggestions as to how those can be addressed.
I am worried that fishing is facing a perfect storm. A series of problems are coalescing and forcing fishers—[Interruption.] Good luck to Hansard recording Siri making an intervention on my phone. I worry that the problems that fishers are experiencing are compounding and coalescing to be more and more difficult. They are not only making their lives harder, but making the future of fishing, in particular from small boats—the under-10s, the inshore fleet—much harder.
We must acknowledge that massive pressure from both the cost of living crisis, to which fishers are prone given the cost of fuel, and the difficulties in using inadequate technology. The Minister knows my view on the catch app: it has been a disaster to date. Progress is welcome, but it is not yet enough. IVMS costs, as well as other costs faced by fishers, are making fishing trips less profitable. Furthermore, not enough is being done to get British-caught fish into British supermarkets. We have had that debate before, and we will no doubt have it again. We need to get to the point where fish caught by British fishers and landed in British ports can be sold with the same celebration and flag waving that we get for British beef in the meat aisle at British supermarkets. That is currently absent from the fish aisle.
Fishing matters. It matters in my constituency, in the south-west and, looking at the geographical spread represented by Members across the Chamber, in every part of our country. In the patch that I represent, there are 1,000 jobs in fishing, but in my past five years of being an MP, I have never seen more fishers concerned about their future and about whether they will stay in the trade. There has always been a fair amount of banter down the pub with fishers about the success of the industry and what is going right, but I am seeing more deeply worried faces. I would like to speak briefly about those people, because I am really concerned that many fishers across the country are now at a crisis point.
Paul Gilson, chairman of the NFFO, said that
“a very large number of fishers are deeply depressed”
and that many are now on suicide watch. Our fishers work tirelessly—day in, day out—to feed us, and they have families to support in a difficult economic climate. They were promised a better system post Brexit, but that has not been delivered. Fishers in our inshore fishing fleet are feeling neglected, and many are not only thinking about their future, but are worried that there is no way out and no end in sight. That should worry each and every one of us, and it is why we must not continue to let down our fishing communities.
When the Minister gets to her feet, I would like her to set out how she can work to make sure more British fish is sold. We need to make sure, recognising the export difficulties that the botched Brexit deal has created, that more of the fish landed here is sold locally in our supermarkets. That is an opportunity to cut carbon, promote British jobs and celebrate the high-quality fish and fishing methods we have in our country. I have made that case to Ministers in debate after debate—as, indeed, have Government Members—but I have still not seen any progress, and the lack of a strategy in the food strategy announced yesterday does not fill me with confidence that there is a plan to get more British fish on to our tables.
I agree with the hon. Member for Totnes (Anthony Mangnall) about the catch app: it needs to be replaced with something that actually works. The improvements are welcome but, my word, they have been painful to wring out. My real concern is that those improvements are often made without the involvement of fishers, who are having to choose between going to sea to try to earn a day’s living and working with the Government in daytime consultations. There is a real problem there, and that needs to change.
The Minister knows of my concerns around I-VMS, which the hon. Member for Totnes also spoke about, but the final point I want to raise is about safety. The Marine Accident Investigation Branch annual report for 2021 shows an increase in commercial fishing incidents. During 2021, 89 casualties were reported to the MAIB, six fishing vessels were lost, and there were 10 fatalities to crew—the highest annual figure in a decade. We need to have a more comprehensive approach to vessel stability and to ensure that every single fisher wears a lifejacket with a personal locator beacon.
Thank you very much, Sir Charles; it is a pleasure to serve under your chairmanship. This debate is timely, and I am grateful to my hon. Friend the Member for Totnes (Anthony Mangnall) for securing it. It is an honour to speak up today on behalf of an industry that served my family well for 24 and a half years until the death of my husband, Neil Murray, because of an accident aboard our Cygnus 33 inshore trawler in March 2011. I hope I can bring that human element to this debate.
I apologise to the Minister and the shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), as well as to you, Sir Charles, for my early departure, which is due to a meeting about an important constituency matter—no discourtesy is meant. I will have to leave before the conclusion of the winding-up speeches, but I hope you will forgive me. I promise to catch up with the closing remarks as soon as I can.
During my time as a fisherman’s wife, the industry provided my family with a comfortable living. There were lean times, and sometimes we had to make personal sacrifices in favour of boat repairs, but as a family we accepted those sacrifices because, like most inshore fishermen, male and female, the owners and skippers who put to sea do so because it is a job they love. Throughout my whole marriage, I kept the boat’s accounts. That involved submitting VAT returns, and sometimes being asked by my fisherman husband why I had not included the receipts that were screwed up in the inside pocket of his jacket. I also dealt with the purchase negotiations for our replacement vessel, so I understand all the stresses and strains under which these hard-working men and women operate to bring their fish to our table.
So many people connected with our great industry hated the common fisheries policy, and saw the vote to leave the EU and the CFP as their salvation. I shared their disappointment when we did not get the promised deal. As chair of the all-party parliamentary group on fisheries, I refer to a report that we recently published and pay tribute to the right hon. Member for Orkney and Shetland (Mr Carmichael) for taking the lead on it. The six recommendations are particularly pertinent to the inshore fleet. They are that we should:
“Ensure that quotas are distributed and managed more fairly…Implement…restrictions on non-UK fishing fleet access to UK waters…sooner than 2026…Ensure effective and inclusive management of UK stocks…Implement measures to increase the efficiency and reduce the costs of exporting…Work with the EU to free up trade and remove regulatory and financial barriers…Invest in infrastructure and new markets both at home and abroad.”
The NFFO has concerns that are particularly relevant to our inshore fishermen. Many inshore vessels are not able to migrate to other fishing grounds in the same way as larger vessels, although they do venture beyond the 12-mile limit. Our own vessel, “Our Boy Andrew” did have bunks, and my late husband would stay at sea for a two-day trip, but these vessels do not lend themselves to longer trips. Of course, that does mean that fresh, high-quality, day-caught fish is available on the market, which can realise a higher market price.
A fairer share of quota is essential for inshore vessels. My late husband used to take scientists to sea with him. He was in the minority. Interaction between scientists and fishermen is improving, but greater collaboration must be encouraged. The catch app is used by about 90% of fishermen, but there is room for improvement, and it is essential that the MMO works with the fishermen to make improvements.
I-VMS will be an important way of defending the most important fishing grounds and activities against outside pressures, but new technology must be adapted to fit the conditions found aboard small vessels, particularly open-deck vessels. I know that some electronic monitoring can have a safety impact. My late husband’s boat was fitted with a class B automatic identification system and without it his boat may never have been found. That is a point I constantly make.
There is also competition for space from offshore windfarms and marine protected areas. I know that the Minister is listening intently to the debate, and I ask her to ensure that she works with the industry between now and 2026 to ensure that at least our six and 12-mile limits are restricted to UK fishermen.
Diolch yn fawr. It is an honour to serve under your chairship, Sir Charles. I am grateful to the hon. Member for Totnes (Anthony Mangnall) for securing the debate.
Vessels under 10 metres compose over 92% of the Welsh fishing fleet, and fishers in Wales are historically dependent on shellfish, crustacea and non-quota species, such as bass. Indeed, the town of Nefyn where I live was once so famous for its herring catch that its people were known as penwaig Nefyn—penwaig being herring in Welsh—and its coat of arms is three silver herring set on a blue background. Sadly, perhaps as a message to us, the herring catch collapsed in the middle of the last century, even though herring remain on the town’s coat of arms.
While the greater part of fishery matters is devolved to the Senedd and managed by the Welsh Government, the key role of the UK Government in negotiating quotas and in interventions such as the UK seafood fund behoves me to stand here and argue the case for Wales’s communities, where fishing was historically of immense importance and where fishers still need support in the here and now to grow an environmentally sustainable and locally rooted food-producing industry in the future.
Let me summarise the present issues. The first is the markets. I am told that the cost of living crisis is knocking consumer confidence and affecting leisure activities, such as eating in restaurants, particularly for high-value produce, such as lobsters and crabs. That is having a direct effect on some of the fishermen local to me. There is also the fact that we still cannot sell mussels and other bivalves to EU countries, which again is affecting aquaculture industries. Fuel prices have already been touched on. In rural Wales, prices stand at between £1.90 and £2 per litre. We are very much aware that although there is a standard charge of 57.95p per litre and 20% VAT on top of that, there is still room for the Treasury to do more.
Some 83,000 tonnes of fish and shellfish are caught in Welsh waters annually, but only between 5,000 and 8,000 tonnes are landed by Welsh vessels. Our communities therefore see little economic or social benefit from Welsh fish stocks. The UK Government have made much of the significance of zonal attachment as the basis on which to agree fishing opportunities with the EU. The same principles could well apply to intra-UK allocations. That would help to reduce the overdependency on a small number of species in Wales, thus reducing the risk of overfishing.
It might be argued that the present capacity of the Welsh fleet is insufficient to warrant allocating all quotas located in the geographic region to that cohort of vessels, which does not presently have the capacity to utilise those stocks, but such an approach would be short-termist and serve only to perpetuate Wales’s present disadvantages. One practical solution would be to lease out any surplus from year to year within the developing workforce fleet and infrastructure systematically to maximise the economic benefits for Wales.
Fishery negotiations with the EU resulted in an increase in the number of vessels from France, Belgium and Spain with the right to fish in Welsh waters. Historically, only 10 vessels fished in Welsh waters, but 76 extra vessels now have the right to fish there. To summarise the present issues, the lack of local infrastructure, particularly in Wales, means that we need to develop the means to make the most of the local catch and keep the value local.
I will touch briefly on a few local initiatives that have shown how to face adversity. In Lockdown Lobsters—the name says it all—Siôn Williams of Sarn Meyllteyrn works with a London photographer called Jude Edginton to bring lobsters here and ensure that he still has a market. The Menai Seafood Company of Porth Penrhyn in Bangor was set up by Mark Gray and James Wilson, who have worked together since 2014. Their business, Bangor Mussel Producers, was hit hard by the ban on the export of live bivalves, but they have now set up a really good local business that processes and sells food. Môr Flasus, which sort of translates as “taste of the sea” but plays on the words “so tasty” in Welsh, was launched by Sian Davies and Dyddgu Mair of Nefyn. They serve street food from an Ifor Williams horse trailer, including lobster cooked in Cwrw Llŷn’s Largo lager, which I absolutely recommend—people travel for it.
In the little time I have left, I will suggest some solutions. There should be a rural fuel duty rebate scheme for Wales, because we are hit by the fact that we are within 10 miles of the fuel refineries, but it does not affect the price at the pump. The Welsh Government should have a role in identifying quotas in Wales, which does not happen presently. I suggest that we should have infrastructure improvements to give Wales greater means of processing locally. Finally, what the Crown Estate has done with offshore wind in Scotland has enabled Scotland to invest far more in local infrastructure, and the value of the Crown Estate is going up incrementally because of those developments. Why can we not do that in Wales?
I congratulate my hon. Friend the Member for Totnes (Anthony Mangnall) on securing this debate, which is important, particularly because it allows those of us who represent constituencies in the south-west to share our thoughts and feedback with the Minister.
I represent the rural and coastal seat of West Dorset, where we have 45 small fishers and vessels. The impressive biodiversity of our Lyme bay coral garden and our thriving fishing ports go hand in hand in West Dorset thanks to the fisherman of Lyme bay, who have made that work. The Lyme bay fishers have done all that has been asked of them to fish sustainably, but we have a small-scale fleet, and the challenges that they now face to make a living are increasingly difficult, particularly in the light of the huge fuel price increases. The value of their catches remains the same, but gear costs have increased. Those fishing families face the same cost of living challenges as other families.
I do not think that the Minister can pull a magic lever to fix those issues, but fishermen report endless consultations, meetings and additional burdens, such as the catch app, I-VMS, new MCA inspections and so on. Those burdens can and need to be addressed. In West Dorset, we are finding the MCA a bureaucratic nightmare. It holds our fishermen to account against its own questionable or false advice. That is increasingly becoming a problem. I hope that I can count on the Minister’s support to help with some particularly difficult issues in my constituency. Fatigue in the sector is considerable. The sheer scale of bureaucracy is causing real mental health concerns.
Fishers are not a regular stakeholder group. Our fishermen do not work nine to five, so the MMO, the IFCAs and officials in the Minister’s Department can and should do more to make things easier for them. Meetings in the middle of the day and the middle of week do not work, because if the weather is fine, fishers go out to sea. They need to do that to earn their money in these increasingly difficult times. Moving all these meetings to early evenings or weekends would make all the difference to attendance and engagement, and fishers would not be faced with a choice of giving up a day’s pay or making their representations.
West Dorset predominantly has small fishing vessels, not big fishing businesses. These small fishers have no paid representation to attend and speak on their behalf at a level to help inform policy. I understand that having shore-based employees helps, but while the NFFO has lots of advice to offer, it does not necessarily speak on behalf of small fishing vessels such as those in West Dorset. I am proud to represent them in this debate and to offer their voice in this House.
Our Lyme bay fishermen know that these issues have been a weakness, but I am proud that they have collectively pooled together across the four ports, not just in my constituency but in Tiverton and Honiton and further west, to register the Lyme Bay Fishermen’s CIC. It is an important and progressive development that means we can really get their voice heard. I hope that the application of the MMO grant scheme will be recognised and that the importance of similar community interest companies will be recognised to ensure that key developments can move forward.
I urge the Minister to see what the regulators can do to change their way of working, because as small-scale fishers rise to the challenge, regulators should do so as well and should give these new organisations and initiatives time to get up and functioning with the resources that they need.
I congratulate the hon. Member for Totnes (Anthony Mangnall) on introducing this debate on a worthy topic. I am pleased to participate in it to give a Northern Ireland perspective.
Hon. Members will be aware that I represent the fishing village of Portavogie. I was there last Saturday at my advice centre: it was a wonderful day and the sun was shining on the harbour. The place was buzzing with life, which told the story of how important fishing is to Portavogie. I came away realising that many people I have known for years have retired or moved away from fishing because it is no longer financially viable for them. While it was good to be there, it also put the issues into perspective. I also speak for the fishing villages of Kilkeel and Annalong in South Down, whose Member of Parliament happens to speak outside these walls in Parliament Square but will not come in to do his job.
It was explained to me when I raised this topic with the local fishing industry that the vessel monitoring service currently in operation in over 12-metre boats sends a ping every 15 minutes to record vessel activity. That feeds in information about where the boat is and how long it is likely to be fishing. That information benefits the Government in our sustainability obligations, ensuring that we have accurate information to appropriately measure and protect our fishing.
There is an obvious benefit to industry when we have discussions about closed areas, because we can demonstrate and quantify where we are already fishing. Extending to under 12-metre boats would be fine—our fishermen have nothing to hide. However, the fact is that that is an additional cost at a very difficult time. I put that on record because on Saturday I heard how costs are overtaking income. One guy I spoke to said it costs him £2,000 a day in fuel to go out and fish. Another said it had cost him £9,500 in fuel in the last four and a half days that he had fished. The costs are extremely high. The hon. Member for Totnes referred to the cost of fuel, and as always I look to the Minister to see what help can be given to these fishing boats.
Northern Ireland vessels should also receive help and support to take on board this new monitoring obligation. They cannot be forgotten when we determine that subsidies are necessary for new equipment.
Let me move on to the issue of HPMAs. Members may be aware that we do not have any currently, but there is a possibility that we will. Although it is essential that we protect our environment—I believe it is, and that fishermen are committed to that—we must also remember the cost of living and the fact that it is vital to sustain local food production at an affordable rate. It is imperative that we fulfil our environmental obligations while ensuring that there is food in bellies without debt in banks. The balance must be struck correctly. That balance is what every fisherman and fisherwoman is committed to at this time.
While thinking of the environmental obligations, it seems right and proper that I flag something to the Minister, who is always very responsive and understands fishing better than most Ministers—I say that very respectfully to her and to those who were in her place before her. Applications to the UK seafood fund are in place, under the science pillar, to work in partnership with the University of Ulster to monitor the effect of fishing gear on the seabed. That work will have a positive impact on our environment by seeing how we can fish with as little an impact as possible on the seabed. I trust that the Department will look favourably on that exciting and useful proposal. I would love a reply on that from the Minister, if at all possible—if not today, I would appreciate it if she could write to me.
Furthermore, another application is in place to create a state-of-the-art training centre in Portavogie, using infrastructure funds. Again, I make a plea to the Minister on that. I am sure the long list from Alan McCulla and Harry Wick and the Northern Ireland Fish Producers’ Organisation will be on her table every week. There is also the strategic funding to advance Kilkeel harbour. We need to ensure we have a new breed of fishermen, with the knowledge passed down through generations and an eye to the modernisation of the industry.
As the House looks towards the importance of food security and sustainability, the fishing industry has a vital role to play. In order to reap the harvest, we must first diligently sow, and now is the time to sow a new style of fishing that merges experience and know-how with modern demands. To do that, we must come alongside our fishermen and fisherwomen and build the industry that Europe decimated for so many years. Now is the time to move. Again, I look to the Minister to see how we will do that, confident that she has the answers—we will soon find out about that. The Minister has a commitment to deliver, which is so important. Again, I thank the hon. Member for Totnes for introducing the debate.
It is a pleasure to serve with you in the Chair, Sir Charles. I congratulate my hon. Friend the Member for Totnes (Anthony Mangnall) on securing this debate.
At the outset, I declare an interest, in that I chair REAF—the Renaissance of the East Anglian Fisheries—which was registered last week as a community interest company. A key objective of REAF is a healthy and vibrant inshore fishing fleet that will not only promote sustainable and responsible stewardship of our fisheries but bring significant economic benefits to coastal communities all around the UK.
I am afraid we have been having debates focused on the inshore fleet for a very long time, yet things never appear to get better. Brexit has, so far, been a missed opportunity, with the failure to secure an exclusive 12-nautical-mile zone to protect the inshore fleet, the saga of paper fish, and the failure to enforce the catch limits for non-quota species for EU vessels. The inshore fleet is currently facing a variety of challenges and there is a serious risk that it will not be around to take up the opportunities that local fisheries management plans can provide. I shall briefly outline some of those challenges.
The regulatory burden is bearing down very heavily on inshore fishermen. It is significant, growing and disproportionate—taking into account the amount of time it takes up and the way it is applied—compared with the regulations for both larger and foreign vessels, and, I suggest, for other sectors, such as farming and retail.
Safety and accurate records are incredibly important, but the introduction of the catch app, I-VMS and over-zealous inspections create an administrative burden and added costs that place businesses at risk and take up an enormous amount of time, which adds to fatigue and exhaustion and makes a long day even longer and fishing an even more precarious and risky occupation. Is it really necessary for inshore fishermen to have to account to the local IFCA, the MMO, DEFRA, local authorities, the MCA and, in some places, Natural England? One REAF recommendation is for the regulatory system to be joined up and not fragmented. Given the Government’s planned reduction in the civil service, now would appear to be an appropriate time for DEFRA to review the current regulatory framework.
As has been mentioned, spiralling fuel costs are crippling the inshore fleet. They are making taking to sea financially non-viable, which means no income for many households. I urge my hon. Friend the Minister to look into ways of addressing that, perhaps through repurposing the UK seafood fund, as suggested by my hon. Friend the Member for Totnes mentioned, along with his other proposals and those of other colleagues.
Finally, there is concern that the laying of cables to the wind farms off the East Anglian coast is creating electromagnetic fields that are having a significant negative impact on traditional inshore grounds. Research has recently been commissioned, but more work is required, perhaps involving Lowestoft-based CEFAS—the Centre for Environment, Fisheries and Aquaculture Science—to ascertain the full extent of the problem and to come up with solutions. That is encapsulated in the final REAF recommendation, which is to make use of data to manage potential conflicts between fishing and other marine activities.
As I said, we have been here many times before, and there is a worry that a vicious spiral of decline could be self-perpetuating, yet this industry has so much to offer in terms of responsible stewardship of our waters, reviving coastal economies and providing healthy and nourishing food for the nation. I look forward to the Minister’s reply and hope she will provide for the inshore fleet a route map out of the current malaise and to a vibrant and sustainable future.
I commend my hon. Friend the Member for Totnes (Anthony Mangnall) for securing this relevant and important debate. I welcome the Government food strategy, through which, in effect, they want to maximise the supply of homegrown nutritious food. The inshore fleet is absolutely the answer, or part of the answer, to that problem.
We do not have long in this debate and we will never cover all the aspects of fishing that we should cover. In five minutes, I would not have time just to list the coves and ports that people fish from in my constituency, so I will not attempt to do that, but if people ever get the opportunity to come down to Cornwall and go to one of those coves—such as Cadgwith, Coverack or Porthleven —they will see how important the small inshore fleet is to the local community, what a key part of the local economy it is and what a local tourist attraction it is.
There is a danger of us missing an opportunity to harvest the contribution that the inshore fleet makes to good nutritious food. In April, I was privileged to meet inshore fishermen in Cadgwith, Porthleven and Newlyn, which is the fourth biggest port in England—in the UK actually—in terms of the value of fish landed, and what I saw was men who know what it is to work hard to put good food on our table. However, those men were tangled not in nets but in red tape, despite the UK having left the common fisheries policy. Today I want to run through what I learned and suggest some answers.
One issue is reporting catch. Fishermen do not object to good data in support of sustainability. I have never yet met a fisherman who wants to completely exhaust the sea of fish. The impression is, though, that reporting to both the MMO and the inshore fisheries and conservation authority is clunky and duplicative, involving a mixture of hard copy and online data collection. It cannot be beyond DEFRA to sort out the way we ask fishermen to record what they catch.
On safety, my hon. Friend the Member for Totnes was right to raise the issue of the under-15 metre safety code. Again, fishermen understand the need for the highest safety levels at sea, but the impression is that the under-15 metre safety code is being applied in a way that gives rise to multiple examples of extreme stress for the inshore fleet. The inspections seem inconsistent and I have met a number of fishermen who believe that changes they have been asked to make risk making their vocation less safe rather than more safe.
There is also the use of technology to consider. We have heard about the roll-out of the inshore vessel monitoring systems. Fishermen I have spoken to are concerned not so much about the principle of I-VMS as about the pace of the roll-out, the ongoing cost of the system and the implications they face if the kit fails and they are grounded because they cannot go to sea to fish legally. The loss of income for a fisherman who already faces restrictions on the number of days they can spend at sea would be significant, if that issue is not properly understood and addressed.
I have a few quick asks. First, I ask for some common sense to be applied to data collection and safety at sea. The Minister is not responsible for safety at sea, but she can support us in our efforts to work with the Department for Transport to ensure that the DFT makes sure that inspections are consistent, coherent and recognise both the enormous knowledge that inshore fishermen have and their years and years of experience of how to keep safe at sea.
I suggest that we scrap IFCAs altogether and instead concentrate marine management and conservation within the Marine Management Organisation. It is bizarre that we are asking fishermen to send similar data to two different places at different times in different formats. That just is not helpful in realising the full potential of our inshore fishing fleet and I suggest it would be a great thing if, as has been hinted at, IFCAs were scrapped completely. I might not be popular with my local council for saying that.
We should also be brave and scrap quotas. A lot of conservationists will be shocked by that, but if we look at the inshore fleet, we see that I am talking about much smaller vessels than those my hon. Friend the Member for Totnes referred to. These vessels do not go to sea very often, because the weather does not suit them—it is not safe for them to go in bad weather. Also, their capacity, their time at sea and how they fish are all very sustainable, so I suggest we could really regenerate our coastal communities, and provide fantastic, healthy food for local communities and for people further afield, if we just let the inshore fleet free and allowed those vessels to fish sustainably.
In the last 15 seconds or so that I have to speak, may I also say that we need to create dedicated areas where these fishermen can fish safely? Across the Lizard peninsula we now have massive freight ships coming through, cutting off the corner of Land’s End and trawling through the fishermen’s kit and making their lives very unsafe.
Thank you very much, Sir Charles, for calling me to speak. I congratulate my hon. Friend the Member for Totnes (Anthony Mangnall) on securing this debate.
Fishing is an important part of the heritage of King’s Lynn in my constituency, where the fishing fleet has been proudly sailing for 700 years. I encourage hon. Members to visit our historic town and I recommend the True’s Yard Fisherfolk Museum, which includes the final remaining cottages of Lynn’s old fishing community in the north end of the town.
Today, King’s Lynn continues to be a busy port, with cockles, shrimps and whelks all being caught in the Wash. However, fishermen are very concerned by the recent decision of the Eastern Inshore Fisheries and Conservation Authority—the local IFCA—not to open the cockle fisheries this year. That decision follows the annual cockle survey, which found that
“the stocks in the regulated fishery do not meet the bird-food model threshold and are unable to support a cockle fishery this year”.
That model is Natural England’s model, which uses the oystercatcher population as an indicator of other species. The Eastern IFCA added:
“This is primarily the result of very low spatfalls in 2019 and 2020 and only a moderate spatfall in 2021.”
Of course, as others have already said, maintaining the balance between a sustainable fishing industry and conservation, including for overwintering birds, is essential, particularly at this internationally significant site. However, local fishermen have questioned Natural England’s assessment and the time at which it was made.
Normally, when one fishery is closed, boats will be redirected to the whelk or shrimp fisheries. However, the Eastern IFCA considers that these fisheries are also under pressure and would not be sustainable if there was an increase in what is taken from them. So, redirecting to the whelk or shrimp fisheries is not an option for these fishermen either, which is a further blow for them.
Last week, when the Eastern IFCA met to make its decision, a protest was held in King’s Lynn with fishermen from Lynn and Boston, and support from Cromer and Wells. This is a very worrying time for the local fishermen, who are concerned about the loss of their livelihood and the consequent impact, which would be felt by those who crew the vessels through to those who work in the processing factories. It obviously comes at a time when people are facing higher bills for energy and other products, which the Chancellor has sought to mitigate with targeted support.
I have written to my hon. Friend the Minister to highlight this situation and the implications for local fishermen. Along with my hon. Friend the Member for Boston and Skegness (Matt Warman), I met the Eastern IFCA, along with the Borough Council of King’s Lynn and West Norfolk. Following that meeting, the council is meeting local fishermen to try to assess more fully the impact of the decision not to open the fishery this year and the inability of the boats affected to be diverted to other fisheries.
As others have commented, one of the issues the fishermen have raised is that of communication with IFCA and Natural England. I am sure the Minister shares my view that proper consultation and engagement should be at the core of how both those bodies operate, and much more needs to be done to ensure that there is proper dialogue. That is not happening at the moment, as any of the fishermen on my patch would testify.
This fishing fleet has a proud history, and it is important that the fishermen have confidence in the future, so I hope my hon. Friend the Minister will agree to meet me to discuss the issue, including Natural England’s advice, and how we can assist the fishermen in my constituency at this very concerning time.
It is good to see you in the Chair, Sir Charles, and I thank the hon. Member for Totnes (Anthony Mangnall) for introducing the debate and for giving kudos to the Scottish Government when that is clearly required, as well as the other Members who have done so. I hope the Minister learns from those rather pointed questions from Members.
It gives me pleasure to sum up a debate on an issue on which I do not think I have addressed the House, although that is not through lack of trying, and I am glad to say that in my constituency neighbour—my hon. Friend the Member for Argyll and Bute (Brendan O’Hara), who is unable to be here today but who has so much of Scotland’s inshore fishing capability based in their extensive and extremely watery seat—those who work in the industry have a doughty and determined advocate. They absolutely need that because, far from being in a sea of opportunity, Scottish inshore fishing communities are collateral to the hardest of Conservative Brexits.
It is apt that we are having the debate in the same week that the Government—at least from my perspective—have unveiled a myopic plan that seeks to break international law and undermine our relationships with the European Union and the United States of America, all in the name of passing a Bill that will undoubtedly make many of us poorer, not least Scotland’s inshore fishing fleet. Some three quarters of Scotland’s registered fishing vessels work inshore, and having previously been the Scottish inshore fisheries group’s secretariat myself, I know only too well that the fleet is diverse and that it includes trawlers, creelers, netters, dredgers, divers and many more.
We saw quite a few years of growth, most of it sustainable, until 2019, but Scotland’s seafood industry has seen an incredible 30% drop in exports to the EU—a perfect demonstration of how Scotland’s food and drink industry has borne the brunt of Brexit. In 2019, some £91 million of langoustine was landed in Scottish harbours, making it the second most valuable seafood stock after mackerel—that is an incredible 43% of global supply, and it is certainly at the top end of the market.
The three largest export markets are Spain, France and Italy, which are all part of the European single market. This is a quality fresh product, and whatever the Government say about an Indo-Pacific tilt or the potential growth in east Asian markets, we are not going to be air-freighting hand-dived Scottish scallops to Shanghai at scale any time soon, and most certainly not in a way that keeps us within our net zero targets.
Members should not just listen to me. Simon Macdonald, chair of the West Coast regional inshore fisheries group, said just last month:
“We’ve had all sorts of problems with Brexit, mostly with the paperwork and the costs of it… They’ve got new health certificates that just came out, which are far more complicated than the ones we had before.”
Macdonald also spoke about shipments being stuck due to new requirements, a delay in the new electronic verification system, the potential for mistakes among a bundle of new paperwork and eye-watering fees of up to £600 per customer order—that is £600 per customer order!
That is an acute issue with Brexit, but the larger issue over time will be chronic as the Scottish seafood industry declines relative to competitors who have free access to the large and dynamic market on our doorstep. Just last week, the Select Committee on Environment, Food and Rural Affairs heard from a range of Scottish fishing organisations, which spoke about the range of factors that will inhibit growth in the sector after it gets over this Brexit shock—namely, the shortage of labour, the increase of red tape and the disappearance of markets where this product, which, as the Minister knows, is reliant on freshness, can gain easy access.
Further, Hamish Macdonell, director of strategic engagement at Salmon Scotland, came out with one stat that made me sit up: Scotland possesses a 6.5% share of the international salmon market, but that is predicted to drop to 3%, while Scandinavia is at 10% market share, which will surely only grow.
It should be said that this is not simply an issue for our coastal communities, although we do get the occasional salty tang off the Clyde next to my office, the site of the former John Brown shipyard. British Governments, both red and blue, allowed the upper Clyde shipyards to wither on the vine, but I am glad to say that there is something of a shipbuilding renaissance in the borough of Clydebank, as the Malin Group looks to build smaller vessels for our aquaculture industry at a site in Old Kilpatrick. That yard needs inshore fishery contracts to grow and to thrive; to do so, it needs a competitive and expanding inshore fisheries fleet, ready and able to take our world-class Scottish produce to markets in Europe. As others have mentioned, a competitive industry is also able to bring down prices at home—vital during a cost of living crisis—and, as we all know, there is nothing better for the developing neural pathways and strong bones of any wean, no matter where they live, than being able to eat as much healthy, home-grown Scottish seafood as possible.
Instead of whimpering on about remainer plots, bleating about a biased media, and attempting to break international law by refusing to implement the Northern Ireland protocol, the UK Government could do two things that are within their power to help and protect Scotland’s inshore fishing communities. Either they could extend the Northern Ireland protocol to Scotland, which voted against the folly of leaving the EU—[Laughter.] I thought that would get a laugh; other Members might not want it, but we do. That would allow Scottish producers to sell seamlessly back into the single market, keeping the Union together and respecting the will of the people. Alternatively, the Government could allow us to sail away from the titanic failure of bargain-basement Brexit, rejoining our European family of nations and allowing the UK to have those sunlit uplands all to itself. What will it be, Sir Charles? I await the Minister’s reply with bated breath.
It is a pleasure to serve with you in the Chair, Sir Charles. I could not help noticing, following your instructions before we started, that we have had an entire Westminster Hall debate without an intervention and we are running to time—you have amazing powers, Sir Charles.
I congratulate the hon. Member for Totnes (Anthony Mangnall) on securing the debate and on his excellent introduction to this very serious set of issues, and thank him for his kindness when I visited his constituency a couple of months ago. It will come as no surprise that my comments will reflect many of the points he and other Members have made, albeit in a different order.
I have been struck by the intense pressure at the moment on people working in the inshore fleet. I was also struck by the comments of my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) about the NFFO’s Paul Gilson, who has been making his point very strongly, to me and to others, about the effect that things are having on people at the moment. Frankly, people are buckling; one distressing case in the industry that has played out over recent weeks is known to many of us, but it is not an isolated case. Partly, I am afraid, that pressure is due to the boat inspections that are being conducted by the Maritime and Coastguard Agency—everywhere I have been, I have heard that issue raised.
An email has been passed to me, written by someone fishing from an under-8 metre boat. A recent inspection found that his freeboard was 20 mm under the limit, and the MCA has insisted that he either block up the scuppers and fit tanks and pumps under the deck, which he considers would be extremely unsafe due to the high likelihood of the pump fouling, or get a full naval architect’s report to say that his boat is safe, which he has been told would cost thousands of pounds. The boat is watertight and well maintained; it has been fishing since 1980 without a single safety incident, and has never even broken down and needed a tow. The author of the email fishes single handed and sells all of his catch directly to the public, with his partner handling the sales. The MCA has banned him from going to sea, so the family has lost its entire income at a stroke. The only permitted solutions are either dangerous or completely unaffordable. He is dyslexic, and has struggled to understand the regulations and the correspondence he has received. He describes himself as “desperate” and
“at the end of my tether”.
That email was forwarded to me on the day that the Under-Secretary of State for Transport, the hon. Member for Witney (Robert Courts) had agreed to meet me and a delegation from the NFFO, and I read it to him and his officials. It is, of course, very powerful. We have sent the Minister who is responding to today’s debate a summary of that meeting, in which we raised a series of issues including the roll test stability assessment; the matter of previously certificated vessels requiring alteration to the original design, which makes them potentially less safe in the view of those fishing from them, particularly—as the email said—those relying on pumps; the very high charges being levied for inspections, which to some very marginal operators seemed excessive; and a range of other issues. I am pleased to report that the Minister replied to me yesterday promising more flexibility and reviews of some of those practices, so I hope that the representations that have been made have some impact. We will see. I am slightly sceptical, because I think there is a bigger issue here. This has been a constant complaint from fishermen I have met around the coast. People feel got at. Some, in turn, feel spied upon and tracked. They feel that they are being treated as if they are criminals, and that is really not a good feeling to have.
I pay tribute to Fishing News for its work on the matter. I was not at all surprised to see some of the people I had met at West Mersea raising the problems in its pages. It is a consistent complaint. When I was in Ramsgate, a very experienced boat builder explained the issues around older boats, where changing the original design raises a series of unintended consequences and potential problems, not least the anomaly that different inspectors seemed to be coming to different conclusions about boats built to the same design. What have surprised me are the complaints about overzealous enforcement and suspicion from some of the bigger boats too. Frankly, it seems endemic.
I am sure that the Minister will say, as did her colleague, that it is about safety. No one disputes the need for safety; it is paramount. However, the checks need to be proportionate. Some of the inspections seem to be carried out by people more used to inspecting large vessels, who then apply the same logic to very small boats. A balance has to be found. Yes, safety is the priority, but there is nothing safe about driving people to despair and destroying their livelihood. There needs to be a culture change and I hope the various authorities, not just the MCA, think hard about that.
There are other issues that are putting people under pressure. The Minister and I have had an encounter at the Dispatch Box over the catch app, when she skilfully dodged my invitation to guess the weight of a previous day’s Hansard. There was a serious point being made there: it is hard to guess weights accurately and there is a long history on that. I understand and share the Minister’s quest for accurate data, but it is once again a question of how people are treated and how they feel. The suggestion that there will not be prosecutions if people make mistakes is welcome.
I assure the hon. Gentleman that my late husband was adequately able to estimate his catch. Of course a lay person could not, but fishermen get used to it, so please do not misrepresent them. I know that they could grade their fish within a certain criteria and would know exactly how much they put in their boxes.
I hear and respect the hon. Lady’s point, but that is not what others have told me. I can only reflect on what people have told me.
In this case, the suggestion does not feel like a guarantee, and if it were a guarantee, there would not be much point making it an offence in the first place. The risk of prosecution is kept hanging over people, once again adding to the pressure that many are reporting.
Then there is the case of IVMS. The hon. Member for St Ives (Derek Thomas) made those points very well, they have been well rehearsed and I will not repeat them. Again, I appreciate the need for data, but the way in which it is being introduced—adding extra cost for people working on fine margins, having time limits on possible financial support, and then people finding that some of the recommended systems are being withdrawn because of the type approval process—has just added to the stress people are feeling.
The stresses and concerns around very high fuel costs have been mentioned. Other countries have found ways of tackling that. The Government are choosing not to do so but, as we have heard, it makes what were already marginal activities in some cases almost totally uneconomic. That is well documented.
I will briefly raise one or two other issues of concern. The UK seafood fund is currently being considered by the EFRA Committee, and I was struck by the discussion on how difficult it is for small operators to access the fund. With minimum spends of £250,000, it is unlikely to help the many small boats in inshore fleets. Can the Minister say what she might do to address that issue? One of the positive outcomes might be to provide assistance in improving the carbon performance of the fleet, either through electrification or improvements to existing engines. Electrification may well require much onshore investment. Again, can the Minister tell us what is being done?
I listened with interest to the concerns raised by the hon. Member for North West Norfolk (James Wild), and the Minister might also wish to tell us what has been done to protect the shellfish sector against sewage outflow—an issue that has received much public attention recently. It was certainly raised with me as a pressing problem in West Mersea.
Finally, there are spatial pressures as the country moves to make more wind power. There are clearly tensions, and although good efforts are being made to do better in future, there have been too many cases where inshore fishers do not feel that their interests have been taken into account. I would be interested to hear how effective the Minister thinks the current arrangements are. Given their role in marine protected areas, how effective does she consider the IFCAs to be, and what plans does she have for improvement? Again, I listened closely to the comments of the hon. Member for Waveney (Peter Aldous).
In conclusion, these are difficult times for many in the sector. A more understanding approach from those who regulate it does not have to cost more money, but it does require a change in attitude, and I hope the Minister will be sympathetic to that call.
Thank you, Sir Charles. As ever, it is a great pleasure to serve under your chairmanship, particularly when talking about fish.
Like everyone in the room, I thank my hon. Friend the Member for Totnes (Anthony Mangnall) for securing this important debate. We all know that the English inshore fishing fleet is an integral part of our fishing industry, and the Government are committed to its future. It is always good to talk to my hon. Friend about fishing, which, as I think he admitted, we do very regularly. No one could do more to stand up for his local fishermen, many of whom I know personally now, and I look forward to further discussions on a frequent basis in the weeks and months ahead.
It is really good to be here among the usual suspects in fisheries debates. I like to feel that there is a large degree of cross-party consensus on how to solve many of the issues that confront the inshore fleet. It was good to hear from the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) and my hon. Friend the Member for South East Cornwall (Mrs Murray), who I am glad is still in her place so that I can thank her for such a passionate and authoritative speech, and say again how much we value her first-hand experience of the industry in this place.
We have heard from Members representing constituencies around the nation, including those from Wales, Scotland and Northern Ireland. We have heard from my hon. Friend the Member for West Dorset (Chris Loder) and my hon. Friend the Member for Waveney (Peter Aldous)—I always describe him as the hon. Member for REAF, but I know he represents many more of his constituents as well. We also heard from my hon. Friend the Member for St Ives (Derek Thomas), who always speaks so well about these matters.
To my hon. Friend the Member for North West Norfolk (James Wild), with whom I have not caught up in the last couple of weeks, I say that I am very much on top of what is happening in King’s Lynn at the moment, and I spoke to my hon. Friend the Member for Boston and Skegness (Matt Warman) about it last night. I am pleased to say that I was also able to meet June Mummery last week, when we discussed those issues as well. IFCAs vary in their effectiveness: some do a superb job at meeting and working with local industry, and some do not. It is really important that the IFCA my hon. Friend the Member for North West Norfolk spoke about continues to meet the sector—I know that there was a big meeting last week—continues to talk through solutions, and continues to talk about any schemes that exist. I would be delighted to catch up with him at any time that he is free, because it is clearly a very difficult situation for the local fishing fleet.
I turn now to the points raised today. I will start with fuel, because we all recognise that the challenges facing the industry relate to input costs, at least in part. Obviously, we are all affected by increases in fuel duty, but fishermen are disproportionately affected, because so much of their cost is fuel and so much of their decision as to whether a trip is worth it is based on the fuel price. That has definitely informed the Government’s decision to retain the fishing industry’s access to red diesel, but I accept that the marine voyages relief fund, which enables fishermen to access that relief, is not as well used as it might be. I am extremely willing to work with hon. Members to see how we can increase the take-up of that perfectly legitimate relief.
The second round of the seafood fund is planned for this autumn. I suggest that I meet my hon. Friend the Member for Totnes to discuss how we might make a plan, such as the one he suggests, to retrofit vessels. We all understand that retrofitting vessels can be difficult and relies on inshore infrastructure that may not always be present, but the Department is in touch with companies that provide that sort of technology. It would be backward to describe such technology as in its infancy, but it is new and there is a great deal of work still to be done. I am extremely happy to meet my hon. Friend, and anyone else who would like to join us, to discuss how we can make the seafood fund work in this area.
The Minister is always responsive, but does she know whether the fuel relief scheme she referred to applies in Northern Ireland? If it does, how many people there have applied for it? That is really important after what I heard on Saturday at the advice centre. Prawns are at their highest price in ages. The price is good, but the profits are being swallowed up by the cost of fuel.
As ever, the hon. Gentleman makes some very relevant points. I know that many, although not all, fishermen in Northern Ireland are receiving good prices, but many of those are being swallowed up by input costs. As far as I am aware, that fund applies to Northern Ireland—I do not see why it would not—but I will check that and come back to him.
On the seafood fund, much of the inshore fleet can receive 80% grant funding if it does not use towed gear.[Official Report, 4 July 2022, Vol. 717, c. 8MC.] Action has been taken to support the inshore fleet and some specific measures were set out in our 2018 White Paper. We have allocated an increased share of quota to vessels under 10 metres, providing them with over 5,000 tonnes of quota during 2021, which nearly doubled the tonnage. We have provided reserved quota to the fleet to support the landing obligation, and the economic link licence condition in England has been strengthened, bringing more quota to the non-sector pool.
We plan to do more to ensure that the quota transfers can be better utilised by the inshore fleet. We have listened to industry about wanting to be more involved, although I take on board the comments about when and how to do that, the tone to use and even the time of day at which to have the meetings. Those are all valid concerns that I will take away.
With the MMO, we have established five regional fisheries groups to provide a formal and regular forum for engagement between the inshore fleet and policy makers, scientists and regulators. Operating at a regional level enables the distinct issues and concerns that relate to local fisheries to be discussed in a way that is not possible nationally, which is a step forward. The groups have already put forward some good, scientifically based projects, including on small-eyed ray and area 4c sole. These projects will be taken forward immediately by the CEFAS.
Fisheries management plans will help managers to design bespoke, flexible and transparent approaches for a number of key stocks. The inshore fleet is fully engaged with that process and I am always willing to listen to suggestions made to hon. Members by their local inshore fishermen about different ways in which they feel we could be consulting with them. We hope to start a consultation before the summer recess on how to protect non-quota species, and I encourage all hon. Members to get involved with that.
We have heard concerns from across the Chamber about the manner in which MCA inspections are being carried out. I recognise that the inspections can be a source of stress. This is very difficult territory, as was widely acknowledged, because we also recognise the enormous importance of vessel safety. We are all concerned about the sadly increased number of deaths as lockdown came to an end. We heard again from my hon. Friend the Member for South East Cornwall, who speaks so passionately on such issues.
I will continue to liaise closely with my colleague, the Under-Secretary of State for Transport, my hon. Friend the Member for Witney (Robert Courts), on marine safety. I am pleased that the MCA has started to attend some of the regular regional groups that we have around the coast for members of the inshore fleet. Engagement is probably the answer here. My hon. Friend and I are having a marine safety roundtable in Maritime Safety Week which begins in the first week of July, and I am happy to look at other ways that those present at this debate can be involved in marking that important week.
We heard concerns about IVMS and the catch app. The MMO—I visited one of its offices, in Newcastle, recently—is working intensively with fishermen to resolve the issues and concerns. I am glad to say that most have been resolved. Uptake of the catch app is now at about 90%. The MMO was keen to reassure me that the intention is not to penalise fishermen, but to collect landings information in a way that is sensible. IVMS is now installed on most under-10 vessels and we have got over many of the initial teething difficulties. Four models are available for fishermen to purchase.
Many hon. Members mentioned the spatial difficulties, so let us not forget that IVMS and the catch app are important tools that will provide us with the data that we need to understand the impact and importance of the inshore fleet, for example, when making decisions about offshore wind or the location of other spatial planning pressures. The data that we have lacked for so long is needed urgently, but it is important that we work with the industry to collect the data in a way that works for it. Nevertheless, the better the data we have, the better the decisions we can make.
We also heard about eating more fish and about selling British fish. I am glad to say that fish is embedded in the food strategy, and that is real progress. Over the course of the pandemic, we saw some improvement in how British fish is marketed and sold directly, but there is much more to do. I look forward to working with Members in all parts of the House on promoting fish from their area to our eaters.
The fleet faces significant challenges, which the debate brought to our notice and which Government, regulators, scientists and the industry itself must continue to address. The diversity of the fleet is one of its strengths, however, and there are some extraordinary examples of individuals and regions seizing the initiative to make the industry more sustainable and profitable. They can be assured that they have the support of the Government and indeed of everyone in the debate.
I will be brief, Sir Charles, but thank you, and I thank the Minister for her response.
I will rattle through some of the comments that were made. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) was absolutely right to talk about the food that we can eat, and the Procurement Bill provides such an opportunity. Unfortunately, I am disappointed in the food strategy, which mentions fishing only four times and aquaculture only three. When it does mention fishing, it is deregulation from EU rules; it does not talk about how we can do better to get fish into the supply chain.
My hon. Friend the Member for South East Cornwall (Mrs Murray) made a vital point: we need certainty beyond 2026, beyond the transition period. People need to know where they are going to go and whether we will have the six to 12-mile limit back in our hands.
I loved the idea of lockdown lobster, and if the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) is happy to invite me, I will visit. She is of course right: that shows the innovative way in which our fishermen and our communities have been able to support local produce and get it into the market. There is more that we can do, and lessons such as that are ones that we can learn from.
My hon. Friends the Members for West Dorset (Chris Loder) and for St Ives (Derek Thomas) made the point about regulation.. I suspect my hon. Friend for St Ives may come up with his very own catchphrase, such as “tangled in nets, not red tape”. I am sure he can do better than me. As ever, I feel validated by the presence of the hon. Member for Strangford (Jim Shannon), who talked about the fact that fishermen are retiring because of the added level of bureaucracy. They feel they might just pack it in because it is becoming too difficult. We need to focus very carefully on that.
My hon. Friend the Member for Waveney (Peter Aldous) made the point that if we are to reduce the civil service, let us reduce the regulation and make it more coherent and easier to adopt. My hon. Friend the Member for North West Norfolk (James Wild) made the point about his smaller fishermen and invited us all to visit. I can think of nothing better than a cross-party visit to see what is going on in King’s Lynn and other parts of his constituency.
The hon. Member for West Dunbartonshire (Martin Docherty-Hughes) made the point about where we might learn. I see no better way to strengthen the Union than by learning how to co-operate through hearing the experiences of Scotland, Wales and Northern Ireland, to ensure that across the United Kingdom of these islands, we have a coherent, successful fishing industry that is the pride of our country. I thank the Backbench Business Committee and everyone for their time.
Driving Licences and Dangerous Drivers
[Relevant document: e-petition 548682, Tom’s Law— Give police the power to suspend driving licences.]
I beg to move,
That this House has considered driving licences and dangerous drivers.
I am grateful to the Minister for her time today, given the sensitivity of the issues that we will be discussing. While the debate could have been called on behalf of any of the estimated 1,390 families who so very sadly lost a loved one to a road death in the last year, it is because of a grieving family in my constituency that I am here. Given their case is subject to an ongoing investigation, I recognise the rules of the House and the importance of ensuring that under the rule of law, judgment can be cast fairly.
I am sorry that I cannot lay out my constituent’s case in full. My understanding is that someone has been charged and it is important that the case is not jeopardised, but I can assure the family and the Minister that I will return to this issue once I can speak more freely. What I can say is that in December last year, my young constituent was tragically killed in a car crash, leaving behind her devastated family. It is important to note that the circumstances of the case raise concerns about drivers being able to continue to drive unless and until they are found guilty of driving-related offences. Although I am here on behalf of my constituent and her family, I hope that the Minister will consider the wider principle that affects any family who loses a loved one to dangerous driving.
As it stands, there is no law to stop any dangerous driver continuing to jump in their car after a tragic accident unless and until they not only are charged but are found guilty. I make it clear to the Minister that, of course, I recognise and wholeheartedly support the justice system upon which our rule of law is built: crimes must be investigated in full and presented before a jury to cast an impartial verdict. My call is not for guilt to be presumed before innocence—it is right that the tragic death of my constituent be investigated in full and all the evidence presented—but we must recognise that waiting for a trial in such a case can take years. It is wrong to allow somebody to continue to take to the road while they face an accusation of and investigation for death by dangerous driving. For the protection of others, for their own safety and for the peace of mind of the bereaved family, the person accused of killing their loved one by dangerous driving should not be back behind the wheel.
I cannot begin to imagine the anguish, grief and despair that a family has to face when they receive that dreaded knock on the door. It is a message that no family should ever have to hear. The pain is unimaginable, but it must be made even worse by the knowledge that nothing prevents the accused dangerous driver from driving while an investigation is still under way. We cannot bring loved ones back, but we can change the law to ensure that, while under bail conditions, nobody accused of death by dangerous driving is back on the road until the investigation is complete. It is really that simple.
Although I am unable to go into the details of my constituent’s case, I will tell the Minister about an investigation that has been completed. I understand from my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) that her constituent, Carol King, tragically lost her partner, Richard Jordan, in a dangerous driving accident on 4 August 2019. Carol and Richard’s daughter was 19 months old when he died. Eleven days after burying her partner, Carol found out that she was pregnant, and she went on to have their second daughter in March 2020. The defendant was sentenced to six years and eight months’ imprisonment, and was also banned from driving for three years following his release. That person, who had previous convictions for driving offences and is responsible for the pain of a mourning family, will be back on our roads in a matter of years.
As it stands, the current laws and framework do not allow for the immediate removal of a driving licence from a person who is arrested or charged in connection with an offence of being over the legal limit for drink or drug-driving. Why can the police revoke a driving licence from members of the public when they fail an eye test or—as in my sister’s case—when they have an epileptic fit, but they do not have the power to remove a driving licence from someone who is driving when over the alcohol limit or under the influence of drugs?
I commend the hon. Lady on securing the debate. I support what she is trying to achieve, and I know that the Minister will respond positively. Does the hon. Lady agree that the change in the law that she wants for the UK mainland would be beneficial for all the regional Administrations? It would provide consistency in police enforcement and in the laws of the land.
I completely agree with the hon. Gentleman. The change should apply across the countries of the United Kingdom.
Carol and her grieving family will be listening carefully to the Minister’s answer. In preparing for the debate, I was interested to see that similar calls were made in this very Chamber in January, in a debate about police powers to suspend driving licences. It was heartbreaking to read that debate, and I truly commend those families who have had their lives turned upside down but who have channelled their grief into the fight for justice and into achieving change for others. It is clear from that debate in January that that includes the McConnachie family.
On 24 February 2019, Tom McConnachie was killed in a hit and run by a drink-driver, who left Tom fatally injured on the road. He then drove to Okehampton and set fire to the vehicle. The offender was able to continue driving for 11 months before being disqualified, as only a court can disqualify a driver. Tom’s family are calling for police officers to be able to provide a suspension notice from the moment the offender is caught drink, drug or dangerous driving until they appear in court. It would then be for the judge to determine whether a ban continues or whether the offender can drive again.
As it stands, the police can impose bail conditions for particular purposes, one of which is to ensure that no further offence is committed while on bail. I understand that a driving ban as a condition of police bail may be deemed appropriate for some cases. However, the remarks made by my hon. Friend the Member for Ilford South (Sam Tarry) in January’s debate made clear that we simply do not know in how many instances a licence has been suspended while someone is awaiting trial, and whether police forces are making use of those powers or even regularly considering them.
Looking further back to November and yet another debate, the Minister of State, Department for Transport, the hon. Member for Pendle (Andrew Stephenson) promised that the Government were considering a review of road traffic offences and penalties, yet six months later we are still waiting for the review to get under way. A review could clarify or amend the definition of dangerous and careless driving. It could close the exceptional hardship loophole whereby drivers routinely avoid driving bans by pleading that it would cause them exceptional hardship—a plea that Cycling UK argues happens so frequently that it makes a mockery of the term “exceptional”. A review could also provide a chance to strengthen the penalties for hit-and-run offences where the driver leaves a victim for dead. Will we be back in this Chamber speaking on behalf of another grieving family in a few months’ time?
I wish to briefly raise the concerns of another of my constituents, a class 3 mobility scooter user who fears that he could fall victim to dangerous or even non-dangerous driving on our roads. According to the highway code, he is allowed to use his mobility scooter only on the main road and not in cycle lanes. Understandably, he finds this unsafe and daunting, and the drivers of the vehicles that pull up behind him are equally frustrated as to why he is leaving the adjacent cycle lane empty while riding at his maximum speed of 8 mph. Does the Minister agree that that is an incredibly easy thing for us to resolve?
I conclude by turning our attention back to the grieving family in my constituency, who are watching today’s debate at home. They did not want to be here today. The pain is still too raw for them. That may never change. Their ask is simple: that the anguish they are facing is not burdened on any other family, and that their dreaded knock on the door can be a chance for change, for the law to be amended so that anybody accused of death by dangerous driving is immediately taken off our roads. I hope the Minister will agree that that does not sound like too much to ask.
It is a pleasure to serve under your chairmanship, Sir Charles, in what is a very difficult debate—we need to be honest about that—but one that does need to be had. While the hon. Member for Mitcham and Morden (Siobhain McDonagh) has set out the reasons why she is unable to discuss the specifics of this ongoing and utterly tragic case, she can be assured that I have taken the time to study the details and circumstances of Lillie Clack’s death. I have also studied the hon. Member’s parliamentary interventions and I commend her for the diligence and determination that she has shown for her constituents—Lillie’s family—and I offer my most sincere condolences as well.
I am grateful to the hon. Member for opening the debate about immediately suspending the driving licences of anyone who causes death while driving. Let me reassure hon. Members that the Government take road safety extremely seriously. It is at the heart of the Department for Transport’s agenda. Any death or serious injury is unacceptable. The Roads Minister, Baroness Vere of Norbiton, has met many families of victims of similar incidents, and she and I are aware of the devastating effects that such incidents cause to the families and friends involved.
I understand the tragic circumstances surrounding the death of Lillie Clack and I extend my sympathies to her family and friends. I also recognise the concerns that, in some cases, the police should be able to suspend the driving licence of an offender who is charged with causing death by dangerous driving. However, while we must do all we can to improve the safety of our roads, we must not make rash decisions that could ultimately make things worse or create other unforeseen effects in any kind of rush to resolve perceived problems with the law and how it operates.
Turning to the call for the suspension of driving licences and the current law, as set out in the Police and Criminal Evidence Act 1984, the police can already impose bail conditions to ensure that no further offence is committed while on bail, and a driving ban as a condition of police bail may be appropriate in some cases. Decisions on when to use those powers are operational matters for the police, who have to balance the rights of defendants not yet convicted and the potential benefits to public safety from reducing the risk of further offences. It is worth noting that the criminal courts also have the power to impose an interim disqualification in certain cases.
The Government are committed to tackling drivers under the influence of alcohol and drugs and ensuring that all such drivers are caught and punished. We have a combined approach of tough penalties and rigorous enforcement, along with the highly respected and effective Think! campaigns, which reinforce the social unacceptability of drink and drug driving and remind people of the serious consequences.
The hon. Member for Mitcham and Morden asked me to comment on recent Government measures. The Police, Crime, Sentencing and Courts Act 2022 includes provisions to increase the maximum penalties for causing death by dangerous driving and for causing death by careless driving when under the influence of drink or drugs to life imprisonment. The Act also introduces a new offence of causing serious injury by careless driving. The Act received Royal Assent on 28 April and the provisions will come into force on 28 June.
On minimum disqualification periods, we have changed the law to increase the maximum period of imprisonment and the minimum driver disqualification period for those who commit the most serious road traffic offences, which will ensure that those who commit the most serious road traffic offences are kept off our roads for longer. The increases will come into force at the end of June 2022, and will apply to the offences of causing death by dangerous driving and causing death by careless driving while under the influence of drink or drugs.
I want to be clear that the Government are not dismissing the concerns that have been raised today and, indeed, by other Members in previous debates. We are aware of the traumatic effects of such incidents, however rare, and we are prepared to act if we are satisfied that we should, in the light of responses to the forthcoming call for evidence on road traffic offences. We remain open-minded that more can be done in this area, but, without further work, we cannot assume that the solution proposed by the hon. Member for Mitcham and Morden is the only one, let alone the right one.
I am sure that hon. Members appreciate that this is a complex area, and that any change to the law should fit within the current driving offence framework. Officials from my Department have been exploring options that could be pursued in this area and will consider the points raised in this debate, as well as the information that comes as a response to the call for evidence.
With regard to any potential law changes for road traffic offences, we will need to consider the interests of victims and wider society and balance those against the rights of suspects. To explore those issues in full, the Department will conduct a call for evidence on parts of the Road Traffic Act 1988. While details of the exact scope are still being worked up, I can reassure hon. Members and the general public that the points raised in this debate on the suspension of driving licences will be considered.
When the timetable is drawn up for that consultation, will the Minister or her colleagues make Members aware so that they can make contributions? It seems to me that, where someone dies in a road traffic accident and the driver is found to be under the influence of alcohol or drugs, it would be entirely reasonable to have a blanket law that applies to everybody to withdraw the driver’s licence, and that that would not be making judgments about the eventual decision in court.
The hon. Member makes a valid point. Most importantly, I can confirm that I will let her know about the timescales, the call for evidence and the conclusion date. I will also endeavour to keep her updated as we make progress. We can all agree that any death or serious incident is unacceptable, and it is my Department’s aim to reduce such incidents as far as we possibly can. I believe that the call for evidence will seek to do just that, while balancing the interests of the suspect, the victim and society, for whom this is completely unacceptable.
Question put and agreed to.
New Wealth Taxes
[Sir Edward Leigh in the Chair]
I beg to move,
That this House has considered the potential merits of introducing new wealth taxes.
It is a real pleasure to serve under your chairship, Sir Edward. This debate could not come at a more important time. People face the biggest single-year fall in incomes in 70 years. We in this House often hear shocking statistics, including about the 2 million food bank parcels that are handed out and the 5 million people who have to choose between heating or eating. Behind each of those statistics, however, is a real person who is struggling, be they a mother who is refusing certain foods at a food bank because she cannot afford to cook them, a pensioner riding the bus to keep warm, or a parent missing yet another meal so that their children have just enough to eat to get through the school day. For some, however, this is not a crisis; it is a boom time.
I thank my hon. Friend for securing this extremely importantly debate. As always, he is making a powerful speech. Britain has in recent years gained a record number of billionaires. Between them, they own £653 billion, which is about triple the annual operating budget of the NHS. During the pandemic, their wealth increased by more than a fifth. Does he agree that such wealth is obscene—especially in the midst of a cost of living crisis—and that we should do everything we can to redistribute it away from the super-rich, who have profited from the pandemic and rocketing prices, towards the workers who kept society running throughout and now face poverty and destitution?
As always, my hon. Friend makes a crucial point, and she is absolutely right: that is a moral imperative.
In the past few weeks alone, we have learned that the number of billionaires in Britain has risen to 177, and their wealth is now at record levels. Britain’s billionaires have increased their wealth by a staggering £220 million per day over the past two years. On top of that, we have learned that bankers’ bonuses are up 28% over the past year and are rising at six times the rate of wages. We have also learned that the bosses of Britain’s top 100 companies have seen their annual pay increase to an average of £3.6 million. We have food banks for nurses in hospitals, but at the top of Britain’s finance sector, the champagne corks are well and truly popping.
That phenomenon is not confined to Britain; it is global. The total wealth of the world’s billionaires is now equivalent to 14% of global GDP—up threefold since 2000. The global wealth of billionaires has risen more in the past two years than in the previous 23 years combined. If we are to tackle inequality and hardship, we need to address our rigged economic model.
The hon. Gentleman is making interesting points. I accept that there has to be a limit to the amount of wealth that can be accumulated by a small number of individuals; I do not think anybody would argue that equity is not important to some degree. He mentions the global situation. Many countries have actually stepped back from wealth taxes, which they found did not work because they are bureaucratic and administratively difficult, and they ultimately did not raise the money expected. Austria, Denmark, Finland, Germany, Iceland, Ireland, Italy, the Netherlands, Luxembourg and Sweden have all tried wealth taxes and decided that they did not work. Why does he think that is the case?
It is not about someone getting more money for doing their job; it is about the obscenity of people getting large amounts of money when others are getting smaller amounts of money. People get six-figure dividends when others live on £10 an hour. That obscene disparity is the issue.
I could not agree more. We are talking about multibillion-pound enterprises with people at the top hoovering up the wealth, while others do not receive anything. Only yesterday, I and colleagues visited a picket line in Wakefield, where bus drivers are on strike; they are calling for £13.40 an hour. Many people will be surprised that they are not already on at least that sum.
To address our rigged economic model, we must first acknowledge that trickle-down economics has been a lie. Wealth is not trickling down; it is being funnelled up into fewer and fewer hands. That is a consequence of 40 years of deregulation, privatisation, outsourcing, driving down working conditions, the weakening of trade unions and lower taxes on the rich. Contrary to what is said by the spin doctors of the right, decades of keeping taxes low for the very rich has not boosted economic growth. In fact, research by the London School of Economics and King’s College London looking at tax cuts over the past 50 years shows that lower taxes on the rich has led to higher income inequality because the top 1% has captured almost all of the gains, while there has been almost no effect on boosting economic growth.
Inequality and hardship are not just at the heart of our system—it is how our system is designed and how it functions. Poverty and inequality are structural and institutionalised. That is why we need a debate on wealth taxes. A wealth tax is an idea whose time has come.
Last year, the Secretary-General of the United Nations called on Governments to consider a wealth tax on those who had profited during the pandemic, to reduce extreme inequalities. The OECD has argued that there is a strong case for addressing wealth inequality through the tax system. The group Patriotic Millionaires has called on the Chancellor to introduce a wealth tax, saying:
“We know where you can find that money—tax wealth holders like us.”
Oxfam has also called for a wealth tax to rein in extreme wealth and monopoly power.
I thank the hon. Gentleman for his illustrative intervention, but I would paraphrase a former Labour Prime Minister, Clement Attlee: charity as a substitution for taxation can be a cold, heartless model. We should not be depending on the voluntary generosity of those at the very top to fund our public services. That creates a scenario that is almost servant and master—blessed is the giver and blessed is the receiver.
The UK does not have a wealth tax. Ministers have previously responded to me by saying that in practice we do, through taxes such as capital gains tax, but, while those earning wages are taxed on every penny of their income above permitted allowances, the same does not apply to the accumulation of wealth. For example, capital gains tax does not apply to all wealth but only to increases in the value of particular items of wealth. Structurally, we tax income much more rigorously than we do wealth. Of course, that favours the wealthy, as it is designed to do. I am afraid it is simply not good enough to pretend that even that system is working.
That is absolutely right. The increase in national insurance contributions was iniquitous, regressive and absolutely outrageous, but from this Conservative Government, it was no surprise.
We currently have the scandal where income derived from wealth is taxed below income derived from work. For example, someone living off share dividend payouts would pay less in tax than someone who earns the same amount by getting up each and every day and going out to work. How on earth can that be justified? Likewise, capital gains tax, paid on profits when selling assets such as a second home, is paid below income tax rates.
There is huge scope for increasing tax revenues by ending the significant tax discounts afforded to income from wealth over income from work. Simply ending the lower rates paid on capital gains and share dividends, and removing the related exemptions on those taxes, would raise around £22 billion per year. That is a lot more than was raised by the national insurance tax hike on working people that we have just discussed.
I am grateful to the hon. Member for giving way, and I apologise for my voice. This debate is very important. People sometimes say that a wealth tax would not work because wealthy people would just up sticks and leave. Does the hon. Member agree that, actually, it is a matter of political will? If we chose to, we could levy an exit tax on vacating wealthy individuals, as they do in the United States. That would be a big discouragement for people to do that. Put simply, what is lacking here is political will—that is what is preventing us from attacking this obscene level of inequality, both here and around the world.
I could not agree more; it is a matter of political will. We often hear politicians using the phrase “tough choices”, but when they say that, they usually mean the easy choice of giving real-terms cuts on wages, benefits and pensions. The real tough choice—the real, morally correct choice—is to make those with the broadest shoulders pay their fair share at long last. It is important to note that more than half of all gains from capital gains go to just 5,000 people.
Before those on the Conservative Benches moan that such reforms are part of some kind of socialist plot, I remind them that Nigel Lawson raised capital gains tax rates to match income tax rates, and that it was a top recommendation by the current Chancellor’s own advisers, the Office of Tax Simplification, in 2020. Other tax reforms that touch on aspects of wealth, such as the regressive council tax system, could also be reformed and replaced with a proportional property tax, as my hon. Friend the Member for Easington (Grahame Morris) has so passionately argued.
Beyond making taxes that apply to certain aspects of wealth fairer, it is time for a new one-off tax on the very wealthy. That was recommended in 2020 by the UK Wealth Tax Commission, which was packed with leading tax experts. It was the first such report undertaken in 50 years, and it is recommended—in fact, essential—reading for every Member of this House, in my humble opinion. It concludes that a one-off wealth tax would be fair, as those with the most wealth have the broadest shoulders to afford an additional contribution to society in times of crisis. It would also be efficient. A one-off wealth tax would not discourage economic activity, and the administrative cost would be a small proportion of the revenue raised. It would also be very difficult to avoid by emigrating or moving money offshore. It could raise vast sums to tackle the ills of economic hardship and inequality.
In fact, the commission says that without a one-off wealth tax, we will not tackle inequality because, while we are one of the most unequal countries in Europe on income distribution, inequality is even worse when it comes to wealth. Almost one quarter of all household wealth in the UK is held by the richest 1% of the population—people whose wealth is above £3.6 million. That is why, today, in this debate, I am calling for a one-off 10% tax on any wealth above £10 million. That could raise £86 billion, according to the Wealth Tax Commission.
Such a tax would hit far less than 1% of the population, but it could create a huge social emergency fund to help get people through this crisis and help rebuild the communities hit by a decade of austerity and the slowest pay growth in 200 years. I am sure that the Minister will reply with all sorts of obstacles, such as “Some people are cash poor but wealth rich, so how would they pay?” Well, the payment can be spread annually, or even deferred until assets are sold.
In conclusion, in the end it is not technical problems that we face but a lack of political will. Just imagine, Sir Edward, if the Government went after the tax of the wealthy as much as they piled taxes on working people. It is a political choice—a moral choice—of where to get the money from, how much, and when. Instead of letting the wealthiest off the hook while hiking taxes on millions of workers who face a cost of living emergency, it is time for a wealth tax on the very richest in our society.
I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on introducing this debate. It is extremely timely and is given justification what our communities are experiencing.
I want briefly to run through a statistical portrait of our country. I have looked at some hard facts about the situation in our country. My hon. Friend has emphasised the importance of redistribution in tackling some of the real problems that many working people face. I have looked before at issues relating to poverty and I will reiterate some of the stats. There are 14.5 million people living in poverty and 4.3 million children growing up in poverty. According to the Institute for Fiscal Studies, there are 700,000 more children in poverty than there were a decade ago. The people who seem to be hit the hardest are families with children, and households with someone who has a disability. Interestingly, two thirds of children growing up in poverty are in households where someone is in work. What does that say about wages overall?
I have also looked at the issue as it relates to pensioners. Despite improvements—which I have welcomed, particularly that with regard to the triple lock, even though it was deflected this year—there are still 2.1 million pensioners living in poverty. There is no need for me to mention the massive increase in the use of food banks. A recent survey and report about children demonstrated that even children are skipping meals because their family cannot afford to feed them on a daily basis. An estimated 2.6 million are skipping meals in some form, and going hungry.
On fuel poverty, National Energy Action estimated that price rises would result in the number of households in fuel poverty increasing by more than 50% in April. The language has changed—we have not experienced until recent years—from a discussion about poverty into one about destitution. There are 2.4 million people who have experienced destitution, including 550,000 children. Destitution is the inability to provide the basics in life: a warm coat, shoes, heating and, of course, eating. That is what they are experiencing at the moment.
The housing figures are startling. On rough sleeping, 64,890 households are assessed as being homeless or facing the threat of being homeless. There are now 1 million on housing waiting lists. The figures on health inequality and poverty are staggering. The gap in life expectancy between our poorest and richest areas is 27 years.
As my hon. Friend said, the increase in the number of millionaires and billionaires is staggering. I looked at The Sunday Times rich list. Britain’s super-wealthy have grown their combined fortunes by a record £710 billion in just the past 12 months. As my hon. Friend said, there has been a nearly 30% increase in City bonuses. In March alone, £6 billion was paid out in bonuses.
Wages are facing the longest squeeze in modern history since Napoleonic times. The research published this morning demonstrates that wages are falling behind again, because of the high rate of inflation. One of the key elements of all of this is the insecurity that that engenders. We now have 1 million people on zero-hours contracts. That is not a society that any of us should be living in or should want to live in.
Somehow, we have to find a mechanism to address the grotesque levels of inequality that our community is now facing. Unless we shape up to that challenge, we will potentially have a change in the nature of our politics, as people get angrier and angrier. We know who exploits that anger: usually it is the far right more than anyone else. In addition to that, we will be ashamed of ourselves for not acting urgently on this matter.
Therefore, how do we ensure urgent action? Of course, I agree with all the policies to ensure that there is a long-term investment plan to get people into jobs that are high-skilled, highly productive and so on, but the link between people having a job and lifting themselves out of poverty has unfortunately been broken, particularly because of low wages. We have also seen the degeneration of our public services because of austerity over the last 12 years, and those public services are therefore no longer available to many people who once depended on them.
We have to introduce an emergency programme of measures to lift people out of poverty and secure long-term investment in our public services, and the redistributive element of a one-off wealth tax, which my hon. Friend the Member for Leeds East has put forward, is one component of the emergency programme that we desperately need. That way, we would be able to use resources directly to lift people out of poverty, to restore some of the cuts that have taken place with universal credit, and to make sure that people get properly funded, particularly if they are providing the public services that we desperately need at the moment. They must have decent wages.
Now is the time to consider all these options. I have always thought that the best mechanics for taxation in this country have been Tory Chancellors. If you look back on the decision to level up capital gains tax with income tax under Nigel Lawson, I think that was the right thing to do then, and it is the right thing to do now. It could give us anything between £17 billion and £24 billion, which would be more than was included in the national insurance increase. It could have covered the social care and health costs for which we need an injection of funds.
Rab Butler introduced an excessive profits tax in this country during the Korea war. It was not just a windfall tax on one sector; it was across the economy for anyone who was profiteering, and the money was put back into funding our public services and helping people out of poverty. All those measures are available to us.
In addition, we need to look at the City of London, because it is obscene the bonuses that are being paid out. Therefore, we need either a tax on those bonuses or a financial transaction tax, so that we have a regular income and the City pays its way. Because of the appalling levels of inequality, the drift towards higher levels of poverty, and the implications that it has for so many within our community, the argument for a one-off wealth tax on that scale—affecting 1% of our population but supporting 99%—is unarguable at the moment. Therefore, there needs be a proper consideration of it.
This is a Westminster Hall debate, but I hope that it extends beyond this debating Chamber and into the main Chamber, and that it becomes a feature of some of the demands in the run-up to the November Budget—the emergency Budget that we now need to tackle the real suffering that our community is experiencing at the moment.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend Member for Leeds East (Richard Burgon) for securing this important debate.
I shall start by reading an excerpt from a letter to Klaus Schwab, the Executive Chairman of the World Economic Forum. It reads:
“The scandalous rise in the cost of living across the globe is not an unfortunate accident. It is the result of dogged commitment, from governments all over the world, to preserving the power and wealth of a tiny minority over the needs of their voting publics. It is a stunning commitment to failure and a constant suppressant on our economic and social prosperity…We must face it. People do not trust democracy because the prevailing global oligarchy is rendering it pointless. No matter how many people vote, if governments continue to listen to wealth over sense, the votes and voices of everyday people are not heard.
If you want to defend democracy you have to face facts. The divide between the very rich and the rest must close. The rich must be taxed.”
People might think that those are the words of a social justice movement or a left-wing political activist, but nothing could be further from the truth. The letter was actually written by millionaires themselves—specifically, a non-party political network of millionaires advocating action on economic inequality and higher taxes on themselves. They include groups such as Patriotic Millionaires, the “Tax me now” initiative, Millionaires for Humanity and 99%-Initiative, who recognise that hard work and entrepreneurship should be celebrated, rewarded and encouraged, but that we cannot do that effectively in a broken economic system that fails to address the gross divide between those with extreme wealth and the majority of everyday people.
Those millionaires and, I suspect, many more decent people like them recognise that something skewed has been happening in our economy over recent years, and they are right. “Taxing Extreme Wealth”, a recent report by Oxfam, Patriotic Millionaires, the Institute for Policy Studies and Fight Inequality, found that in the UK alone,
“Between 2016 and 2021, the number of individuals with wealth over $50 million increased from 4,375 to 5,330”.
The report also found that there were 56 billionaires in the UK, with wealth totalling $204.9 billion, and that throughout the pandemic, while many people struggled, the wealth of British billionaires actually increased by $41.06 billion. Indeed, the five richest billionaires have the same amount of wealth as the bottom 40% of British society.
That phenomenon has not happened overnight. The global free market race for the most competitive national tax rate has seen the top rates of personal income tax and capital income tax rates decline since the 1980s in leading industrial nations, and the income share of the top 1% has significantly increased. On top of all that, the tax system in the UK is littered with loopholes that allow tax avoidance, and there is little resource for Her Majesty’s Revenue and Customs to clamp down on tax avoidance or evasion. There are a number of inherent structural flaws, such as the absurdity that income from wealth is taxed at a lower rate than income from salary.
As we have heard today, the sad fact is that it does not need to be like this. We can take steps to reform our broken taxation system, and a wealth tax is one option to try to create such economic balance. Of course, there are many permutations as to how a wealth tax could be constructed: it could be an annual tax in tandem with wider, much-needed reform of our taxation system to address existing loopholes and structural flaws; alternatively, it could be a one-off tax in response to the covid pandemic and the cost of living crisis. Such detail requires deeper discussion than time will allow today, but I hope that it will be the next step after today’s debate.
Even millionaires are warning us against the injustices that they plainly see in our economic system. Further, they are warning us to take seriously the threat that rising inequality poses to democracy. It is up to all of us, whatever our political stripes, to embrace tax changes that would limit inequality and give our constituents the quality of life they deserve.
It is a pleasure to serve under your chairmanship, Sir Edward. It is important to put the other side of the argument in this debate, albeit very briefly. It is fascinating to hear Members on the left of the Labour party campaign for even higher taxes when we already have the highest taxes this country has experienced during my lifetime. Like most Conservatives, I am in support of lower taxes, which is why I voted against the increases in national insurance. I agree with those who say that it was the wrong solution.
I want to encourage an entrepreneurial society. I want to have the wealth contributors active in our society. I have just come back from a parliamentary visit to California, where there is an enormous amount of wealth. California had a surplus last year of $100 billion, which was largely on the basis of taxing the very high earners and the wealthiest people in California. However, we heard a cautionary tale. There is a worry that California’s whole network of public services is now highly dependent on the income of such a small group of people and that, with the recession—when those people may lose a lot of their wealth—the income of California will drop dramatically.
I want to mention a couple of examples of wealth taxes that are already in operation. One is in the context of stamp duty. The consequence of arbitrary levels of stamp duty is people being deterred from selling their houses—they choose not to incur the tax and stay in the house they are in. We need supply-side reform there to eliminate the problems caused by high levels of stamp duty. It is very easy to campaign and say, “That is a really expensive house. When you buy that house, you should pay a substantial amount of tax on it,” but the consequences are—the unintended consequences, as so often arise with such measures—that we have actually succeeded in suppressing the housing market and individual choice.
The other issue, which is a big one in my constituency, is the proxy wealth tax, otherwise known as council tax, which is higher for those people who have more valuable properties. There will be some people who argue that it should be even higher for those with even more valuable properties. In my constituency, I have a large number of people who are, for want of a better expression, in council tax poverty. They face council tax imposed by Dorset Council in the order of, say, £4,000 a year, which is a heck of a lot more than 10% of their annual disposable income. It is a real pressure point at the moment.
Council tax is not a fair tax, because the taxes are not related to the use that individuals make of public services—it is a proxy wealth tax—but it sounded like a good idea at the time, as a reaction to the problems over the community charge. It is the law of unintended consequences that in Dorset, large numbers of my constituents are paying disproportionate amounts of money in council tax because of the system that is in place. Because their house happens to be worth more than a house somewhere in the north of England, they are deemed to be in a position to be able to pay more tax to the local exchequer than somebody in the north of England who might be very much better off.
I take issue with the hon. Gentleman’s assumption that the council tax is a wealth tax. A lot of my constituents who do not own anything—who do not own the house they live in—still have to pay council tax. It is not a tax on ownership; it is a tax on occupancy.
It is a tax related to the wealth of the property in which someone lives. If there is only one person living in that property, there is a 25% discount, but there is no discount otherwise. It is solely related to the capital value of the property, and that is why, in a sense, it is a wealth tax. I know that this is an inconvenient argument for those who are campaigning for a wealth tax, but let us be under no illusions: the council tax system is essentially an embryonic wealth tax, although the levels are much lower than the hon. Member for Leeds East (Richard Burgon) referred to in his introduction to the debate.
I do not know anybody who would be subject to the tax that the hon. Member for Leeds East suggests. He mentioned people who say they would love to be able to pay more tax. As I said in my intervention, there is nothing to stop all those socialist millionaires who have a bit of a conscience and who are arguing that everybody else other than themselves should pay more tax making their own contribution. There is nothing to stop the hon. Gentleman setting up a trust fund into which they could pay, so they could then contribute more than they are able to contribute at the moment. Why not do that?
If people want to pay more towards the costs of the state and are in a position so to do, there is a voluntary system out there. I am sure the Financial Secretary to the Treasury, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), will draw our attention to the fact that the number of voluntary contributions made to Her Majesty’s Revenue and Customs is rather modest compared with what it could be on the basis of what those supposed billionaires want to do.
Let us keep the wealth creators in our country. Let us praise the work they do, the jobs they create and the contribution they make to our overall wealth as a nation. Let us not deter them and drive them away elsewhere. I am very much against a wealth tax and I hope the Minister will make it clear that it is in no way on the Government’s agenda.
Thank you for calling me, Sir Edward. Thank you, too, to the hon. Member for Leeds East (Richard Burgon) for bringing forward the debate and for his advocacy on the issue.
Tax is a fundamental and necessary tool of the Government and, from my perspective as a social democrat, one that is not being adequately levied by the Government to address the huge and parallel challenges of poverty and wealth inequality. Wealth inequality is one of the most defining issues of our time and, like other seismic challenges, such as climate change, it will only be addressed by concerted, co-ordinated and internationalised action. It is being driven, first, by failures in the tax system to levy tax, and secondly, by evasion and avoidance, which is not just about short-changing the public purse but also has a distorting effect on decent, compliant and locally anchored businesses.
The UK and the world, as hon. Members have outlined, is not short of wealth. There is plenty to go around. The global economy has quintupled over the past three decades. However, due to regressive and outdated forms of taxation, that wealth is accruing in the hands of a tiny number of people at the top, while the wealth of those at the bottom is decreasing. Globally and in the UK, the tax system is essentially rigged for exactly those purposes. We know, too, that inequalities have worsened during the pandemic and, in parallel, that the cost of living has surged, the average salary is nowhere near keeping up and public services—health and education—have deteriorated.
The Government need revenue and they turn to tax—so far, so fair—but who or what they choose to tax reveals a mindset. A state can choose to tax either wealth or income and this Government have chosen to tax income—to tax work, when a wealth tax would garner more resource for the state and, in parallel, help address the issues of income disparity that are driving a lack of cohesion and hampering social solidarity. Taxing income alone will not raise the resource needed to be genuinely transformative in those issues of poverty and climate change or, for example, the challenges within the health service. It will also do nothing to address the widening gap between the richest and the poorest, which, as others have outlined, is part of what is driving populism, fundamentalism and people feeling lost within the political system.
It is welcome that the Government are belatedly pursuing a windfall tax—even if we are not supposed to call it that—to address some of the property bonanzas, but that should not be limited to the energy sectors; the Government should also focus on an individual wealth tax. What do we mean when we speak about the wealthy? Before we even start to discuss at what level a tax is levied, what comes to my mind, when differentiating, is those whose income comes from assets such as rents and dividends, when the rest of society depends on labour and wages. It is wealth that makes money even when somebody is asleep, and often at a faster rate than the one at which many people are able to earn.
The enduring myths about wealth, which we will hear mentioned in this debate, include the idea that wealth taxes would slow down the economy, deter job creation and prompt capital flight. One myth is that, simply by existing, wealthy people create jobs; but we know that in fact it is demand that creates jobs. If we take a billion pounds and give it to one person, about 99% of that wealth will leave circulation. Yet that same billion, distributed among a million people, would continue to circulate around the economy, stimulating demand, and not be locked up in the hands of a small number. So the mega-rich are, in fact, taking capital out of society and spending it on the inflation of existing and essentially non-productive assets, such as land and property. That is what trickles down from the wealthy to the average person who is trying to buy a home to live in or raise their family.
The wealthy and their wealth will not just leave, either, any more than wealth is already leaving the public purse due to our complex and loosely regulated tax systems. A large amount of the wealth in this country is tied up in property; as the hon. Member for Brighton, Pavilion (Caroline Lucas) said, it cannot just up sticks and leave. Tax avoidance is not inevitable; it is a policy choice around where to levy tax and underfund enforcement. Things like the Panama papers and the Paradise papers have given more than enough evidence over the years to show that tax avoidance and evasion are standard practice around the world.
Last week, BBC programme “Spotlight” revealed a niche product called Northern Ireland limited partnerships, which are being exploited on a wide scale for people to avoid taxation and to get up to all sorts of nefarious purposes. One street in my constituency in south Belfast is home to 100 such Northern Ireland limited partnerships, which create not a single job or add a single penny to the Revenue, and which are up to all sorts. However, it was a choice not to close down that loophole.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate.
I will not reproduce figures already mentioned, but there has been an explosion of wealth, certainly since the banking crash, and before that, alongside a growth in poverty. The two things are interconnected, because the growth in wealth is a function of the increase in poverty. It reminds me of Victor Hugo’s statement:
“The paradise of the rich is made out of the hell of the poor.”
That is the truth of the matter, but it is not simply about poverty. It is also about remuneration for middle and upper-income earners as well as lower-income earners. The truth is that there is a long-term secular decline in the proportion of GDP that goes into wages and salaries. That is the central problem with which we need to wrestle, if we intend to tackle the fiscal crisis that state services are now facing. There are four sources of tax. There is income tax, which is more or less half of all tax raised. There is tax on consumption, which is VAT. There is tax on household property, the council tax. There is tax on capital. The tax on capital is one twelfth of the amount raised from income taxes, and is imbalanced as a consequence.
It is even worse than that. If the amount of money going into the salaries and wages of the 33 million working people in our country is correct—it is, because a graph shows it clearly—the capacity of income tax, which is the largest amount of tax we raise, will be limited and in long-term secular decline. We must do something about that, if we want to continue with public services and tackle inequality. Where is the money going to come from? I do not think for one second that we want to increase VAT in any event, but particularly given the cost of living crisis. Nor do I propose an increase in council tax.
Income tax is in long-term decline for the reasons I have given. Therefore, there is only one other place to go, which is to tax wealth. Two of my hon. Friends talked of a one-off tax on wealth. I am not convinced that that is the right way to do it. First, a very large amount of money, a proportion of individual wealth, would have to be raised on a one-off basis to make a significant contribution. In any event, there is a long-term fiscal crisis, for the reasons I have described. Therefore, we need a regular tax on capital.
I have a further point to make on that, and it has already been made. For some reason, we tax income from work much more than income from wealth. That is wrong, imbalanced, asymmetric and should end. There is scope to do that. I published a paper about a year ago, which is now in the Library, about wealth and a wealth tax. We looked at several different ways of taxing wealth, and there are many. We worked out the median of a reasonably balanced wealth tax, taking account of behavioural changes, because wealthy people will change how they behave. We thought we could raise about £100 billion a year. The document is in the Library for people to look at. That is the central argument that needs to be made. Of course, there is an ethical argument about whether one human can be worth millions of pounds more than another. There is also an argument about inequality, tackling poverty and all those issues, but the central question is how to deal with the long-term fiscal crisis.
I will make one final point before I sit down. The Conservative party will not resolve this. Why do I say that? Tory donors who are among the top 250 richest people in our country have donated to that party £57 million. We all know that whoever pays the piper calls the tune. The Tories are not going to resolve the problem; they are part of the issue. There has to be a debate about these long-term problems, and a wealth tax is part of the solution.
Thank you for calling me to speak, Sir Edward.
People say times are hard. We have all said it. There is not one person in this Chamber who has not said it, and I am sure the Minister has said it as well—and meant it. Today, times are harder than ever. That is the situation we are living in today. I want to give an example of one person in my constituency to illustrate why we need to consider new means of raising funds through taxation. I support the thrust of what the hon. Member for Leeds East (Richard Burgon) has referred to, which is important.
A healthcare assistant in my constituency works three long days plus whatever overtime is needed on her ward at the Ulster Hospital. She is now paying £400 a month out of her wages for fuel. Her parking at the hospital, which she has to pay for, is £60 a month. Her rent is £750 a month, which is not exorbitant—that is the normal going rate for rental accommodation. Her food bill, while trying to eat healthily, is £500 a month. Her gas went up to £180 a month and her electric is £100 a month. That comes to a princely total of £1,990 just to be warm, eat and get to work, with none of the luxuries that she would probably like to have.
There is no subway for my constituent to get to work and no bus timetable that fits with her shift work. The list goes on. She said to me, “Jim, I want to have a child, but can you tell me how I can afford childcare, afford to dress and feed another person, and live a life?” Can anybody here tell me how to do that? I could not tell the lady. I am sure nobody else could. I have no answer for this lovely young lady. We in this place need to come up with the answer and put it into operation. That is what this debate is about today.
I understand that people have different qualities, experiences and abilities. Those who get a big sum of money, such as a brain surgeon, get a lot more money than the person who drives, with respect, a bin lorry. I understand that. Different jobs pay different moneys. What I object to is the obscene amounts of money that people get for bonuses. I am not saying that they should not, but if somebody gets a six-figure sum or a seven-figure bonus, I despair when I think of the people in my constituency who cannot get it.
The hon. Member for Belfast South (Claire Hanna) said we should tax such people at a level that does not screw them but ultimately means they make a significant contribution to the tax system. We could then put that money into the NHS and into education. All of us in this House would see that as a benefit and a way forward.
This is about how we can raise revenue to benefit families on the poverty line today without their grandchildren paying it off. Those who use tax avoidance legally withhold what they should morally pay. The right hon. Member for Central Devon (Mel Stride), who is not in his seat, named companies that should pay their taxes. If they paid their taxes, the Minister would be in a position to use that money for the benefit of everyone in the United Kingdom.
I read an article last summer that highlighted the fact that eight large tech companies in the UK made an estimated £9.6 billion in profit from sales to UK customers in 2019; yet by moving that money out of the UK those companies ended up declaring a fraction of their profits in the accounts of their UK subsidiaries, radically reducing their tax liability. That is how they can make more money. If they paid their tax, the Government could do more with it. The companies were Amazon, eBay, Adobe, Google, Cisco, Facebook, Microsoft and Apple. They faced UK corporation tax liabilities of £297 million in 2019. That puts the total amount of tax avoided by companies in the UK at an estimated £1.5 billion in 2019, pre-covid and pre the difficulties and the changes that covid brought to businesses. There were £45.4 billion in revenues, £9.6 billion in profits, £296 million in tax paid, and £1.5 billion in tax avoided. Those are the companies that we should go for.
Have the Government estimated the cost of cutting fuel duty, for example, which lowers production and transport costs, saving businesses and consumers money that they can put back into the local economy? This is an issue that we must consider. We must do more to encourage these billion-pound businesses to do the right thing by the consumers from whom they make their money. If ever there was a time to ask and then legislatively demand of businesses that they live up to their obligations, it is now. I ask the Minister, who I believe is a compassionate lady who understands the issues, to put together a team designed to do that. We should not borrow more money for our grandchildren to be paying off over all their lifetime. The time for action is now. Let us change the legislation, make these big companies pay, and use that money for the benefit of everybody.
It is a pleasure to serve under your chairmanship, Sir Edward. Congratulations to my hon. Friend the Member for Leeds East (Richard Burgon) on bringing this very timely debate to the Chamber.
I am possibly naive, but I really believe that there is good in everybody—I really believe that. But I see the inequalities and disparities in the way in which this very, very wealthy nation distributes its finance, and it is having an impact on me. I am worried. And I am thinking about how politically naive I actually am, because I honestly believe that most people in the House of Commons, most elected representatives, want to do what is right for the people in this country, but that is not happening.
The economic model is rigged—it is grotesque. The inequalities, the disparities, are there to be seen. We did not need reports; we do not need professors’ reports or experts’ reports. MPs can see this in their constituencies. They can see it on their streets. They can see it in the housing stock. Why are bankers’ bonuses 28% higher and rising six times faster than the wages of an average worker? As my right hon. Friend the Member for Hayes and Harlington (John McDonnell) said, £6 billion was paid out in March. This is at a time when we have people—just go outside the doors of the Commons to see this—lying on the streets. They cannot afford food and are struggling merely to exist. It is grotesque. I resent anybody who would support such a system. Why do we have such imbalance? Why do we have these billionaires who could never spend the money that they have amassed if they lived for four or five centuries? At the same time, we have children in poverty. We have 2.6 million children skipping meals; we have their parents skipping meals, because the family income is not enough. Yet the number of billionaires increase—they increase and increase—at the same time as people cannot switch the electricity on in their homes. What needs to be expressed in such simple terms that it cannot be misunderstood by people in this House? While the rich get obscenely richer—this is not rhetoric; it is fact—we are seeing people at the lower end of the income scale suffering so much.
We live in a very proud nation. I am very patriotic, but being patriotic does not mean to say that we wave the Union Jack flag and sing the national anthem. I think that being patriotic means looking after the people in our country and ensuring that they have the basic human rights in life—that they can keep themselves clean, have a roof over their heads, have enough to eat, and have a decent income to have a decent lifestyle. That definitely is not the case now. That cannot be argued against here. It cannot be argued against, because the facts and figures have been put before us in this debate by the speakers. We still have 2 million people using food banks. We still have families claiming benefits. We have families having to use food banks and people in work claiming benefits and using food banks. It is totally unacceptable in a democracy—in a nation such as the one we are very proud to represent—that these grotesque inequalities continue to occur. They cannot continue; let us show some humanity.
I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this debate, and other colleagues, including my hon. Friend the Member for Hemsworth (Jon Trickett), who have campaigned tirelessly for a wealth tax. The debate is vital and timely, particularly during this cost of living crisis. As others have said, we are one of the richest nations on the planet, yet we have some of the most shocking inequalities. On the one hand, we have City financiers cashing in on above-inflation income rises through bonuses and multinational corporations spending billions paying dividends to shareholders. On the other, the Government are holding down incomes from public sector pay, pensions and social security, and the use of food banks at the moment is astronomical. Over the past decade, public services have been stripped to the bone because the Government claim they cannot afford to pay them.
I have just completed a cost of living survey in my constituency of Cynon Valley. We had a huge response: over 650 people responded, and their stories were harrowing. The levels of anxiety, despair and misery are unbelievable. Some 90% of people said that they felt worse off than they did 12 months ago; 40% said that they would not put the heating on; and 50% said that they would be cutting down on essentials such as food. We have allowed poverty to become normalised, at a time when banks, energy companies and multinationals have more money than they know what to do with.
The reality is that more often than not, those with the capacity to pay a greater amount of tax pay proportionately less than those who are less able. Recent statistics published by the Office for National Statistics show that the top 10% of individuals hold almost 50% of all wealth in the country. Inequality is also geographical: the figures on individual total wealth by region in this country demonstrate an enormous disparity between the wealth in London and the south-east of England, and the levels of poverty in areas such as mine in the country of Wales and in the north of England. In my constituency, before the pandemic, the median weekly wage of a full-time worker was £80 less than that of the typical British worker. Wage rates are such that in 2020, more than a quarter of local residents were estimated to be earning less than the real living wage. These are not people who we can tax more to fund public services, which is why it is unacceptable that income from wealth is taxed less than income from work.
Others have already given examples of respected think-tanks and colleagues in the House who have identified the mass of wealth that could be subject to greater taxation. For example, in 2019, the Institute for Public Policy Research proposed that income from dividends and capital gains be incorporated into the income tax schedule, estimating that those changes could raise up to £120 billion of additional revenue over five years. The report of the Wealth Tax Commission found that a one-off 1% wealth tax on the richest could raise £260 billion in the UK over the next five years.
The Welsh Government have made it clear in their programme for government that they are committed to growing their tax base and developing further effective tax measures to ensure that the interests of local people are protected. They have begun that process by increasing taxation thresholds on second homes in Wales, and are making the case for tax devolution in Wales. This has to include ensuring that the profits from the Crown Estate in Wales go directly to Welsh governments—currently, that is UK tax in Wales, but the Welsh Government should have access to it.
I will finish with a quote from a constituent who responded to the cost of living survey. Behind all the statistics, as we often say on this side of the House, there are real people:
“Life genuinely doesn’t feel like living any more. I feel guilty for bringing my children into this awful mess of the world.”
Is that a society that any of us want to be living in? I do not think so. Shame on us as a society. Shame on this Government. We need to introduce a wealth tax now.
I am pleased to begin the summing-up for this debate. I congratulate the hon. Member for Leeds East (Richard Burgon) on securing the debate and for the well-informed and passionate way in which he introduced it. That goes for all the speakers. I had issues with some comments from the hon. Member for Christchurch (Sir Christopher Chope), who has not been able to stay to the end, but he put his points across with a great deal of vigour, as always.
I think what we are looking at here is a fundamental difference of opinion on who the wealth is for. Who is the world’s wealth for? Who should have first claim on the natural resources of any country? Historically, Britain has taken the view that it does not belong to the people in that country. That is what the colonies were about. That is what the slave trade was about. There is an assumption that is still deep in the British psyche that somehow Britain is better than everybody else, that, “We’ve got a right to impose on them; they don’t have a right to impose on us.” We see the same attitude in arguments about who has the right to enjoy the benefits of the resources of this or any other country.
I see that locally, in my own constituency of Glenrothes in the centre of Fife and throughout west and southern Fife, with the legacy of the coal mining industry. For the few, it generated massive fortunes. For the many, all it generated was memorials and early graves. Many of my constituents are still, to this day, permanently disabled by diseases they caught while working down the coal mines.
Then there is the legacy of North sea oil and gas—I say the legacy, although that is not fully known yet, because there is still plenty there to be used should we decide to do so. Norway discovered gas at about the same time as we did. The Norwegian sovereign wealth fund is today worth $1.2 trillion dollars. Norway does not have a national debt, it has a national fortune that it almost literally struggles to find places to invest, equivalent to £184,000 for every man, woman and child in Norway. Scotland’s equivalent sovereign wealth fund from our North sea oil riches is nil, as it is for other parts of the United Kingdom. The entire fortune was frittered away almost entirely on tax breaks for people who already had more money than they knew what to do with.
As has been commented on, the United Kingdom has more billionaires today than ever before and, at the same time, it has more people than ever before genuinely wondering if they will go hungry this weekend. That cannot be right. In five years, the wealthiest 20% of people saw their income increase by 4.7%. The poorest 20% of people saw their income go down by 1.6%. Not only is the wealth and income gap obscenely large, it is getting bigger all the time.
Even during the pandemic when millions of low-paid workers in the public and private sector were going well beyond what they could reasonably be asked to do to keep the economy going, keep us safe and keep public services going, the top earning 1% of employees saw their income increase by 7%. For the bottom earning 10%, it was just over 2%. Seven per cent. of a salary of half a million pounds a year is a heck of a lot more than 2% of £10 per hour.
Oxfam has reported that the fortunes of individual food and energy billionaires has increased by $453 billion in the last two years. One reason why fuel prices are escalating just now is not the requirements of the market, but the naked greed of a small number of individuals and corporations who have decided to take advantage of international crises to increase their own fortunes.
At the same time, this Government choose to employ eight times as many people to chase benefit cheats than they employ to chase tax cheats. Why is that? Because this Government still cling to the philosophy that there is something intrinsically wrong with having to claim benefit and there is something intrinsically wrong with having to pay tax, so we should chase down people who might be fiddling their benefit claim, but, if people are fiddling their tax, unless it is really blatant or unless it becomes impossible to ignore politically, we will not be too worried. We have just over 500 people to deal with large-scale tax fraud against HMRC. We will never get anywhere near full recovery of the money, and the reason can only be that they do not want to.
The rising levels of inequality are not inevitable; it does not have to be like this. They are not an accident, and they are not the natural order of things. It is an artificial situation that has been deliberately created over time by Governments here and elsewhere. Keeping the inequalities and allowing them to get bigger and bigger by the day is a deliberate political choice by the Government of the day. I am not suggesting for a minute—nor, I suspect, is the hon. Member for Leeds East—that a wealth tax on its own will solve all that, because it cannot. No individual measure can solve inequality to the extent that we have it in these four nations, but surely it is time to send out a signal that the purpose of taxation is not to give people who have too much money even more. It is to provide for those who cannot afford to provide for themselves. There is a significant necessity and urgency about that just now.
United Kingdom Government debt, as it stands, is unsustainable and that cannot be allowed to continue. There are three ways to deal with it: we can raise taxes; we can cut public spending, although I cannot think of a single part of the public sector that needs to be cut, and I can think of a lot that desperately need more resources; or we can take steps that will help to grow the economy, which is a longer-term ambition that will not happen overnight. There is an imperative to increase the amount of tax that is raised somehow, but the Government have chosen to do that by punishing people for being low paid. They are punishing people for going out to work, and punishing businesses for taking on additional employees by increasing national insurance. The Government had a choice to increase other taxes, which might have upset the Chancellor’s friends but would have left the vast majority of people in these four nations better off as a result.
There is not a single thing called a wealth tax that is necessarily good or bad. There is a lot of detail that needs to be considered, and it is quite right that nobody has put forward a specific plan as to exactly what should constitute wealth, where the tax should start and what level it should be put at. Those are all things that need to be looked at in detail and, once the wealth taxes are introduced, that will inevitably become part of the Budget considerations for future Chancellors. However, given the level of inequalities that we have just now, and given that there are people resident in these four nations who sometimes try to pretend not to be resident and who literally have more money that they could possibly spend during their lifetime, no matter how hard they try, surely it is only reasonable to ask them to give up a tiny fraction of their massive wealth to protect people who have been through the mill over the last two and a half years, many of whom have made massive sacrifices. Surely it is time to start giving these workers the salaries that they deserve and to start to reinstate the public services that so many citizens urgently require.
I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing the debate, and I thank all hon. Members for their contributions.
Taxation is high on the political agenda right now for a number of reasons, but particularly in the United Kingdom because we are the only country in the G7 to be putting up taxes on incomes in the middle of the cost of living crisis that we are going through. We often hear about the global factors behind some of what we are experiencing—for example, the opening up of the global economy after covid, or Russia’s invasion of Ukraine. Of course those factors are contributing to inflationary pressures in many countries, but specific factors in the UK have also made our situation more difficult, such as the Government’s decision to allow the closure of our biggest gas storage facility, our exposure to short-term energy spot markets and, as well as the national insurance increase, the decision to freeze personal allowances for five years, which creates more taxes on incomes as inflation rises. The combination of price rises and tax rises was specifically cited by the OECD last week in its forecast, which projected UK growth next year to be the lowest in the G20 with the sole exception of Russia.
The Government’s incoherence on tax has been highlighted in this House in one fiscal statement after another over the past couple of years. First, the tax rise was announced, then a change in thresholds, then a cut promised in two years’ time. Then there was a debate within the Conservative party about whether that cut should be brought forward from two years’ time. I thought the hokey-cokey was a dance, not a description of Government tax policy, but that is how it has felt over the past 18 months.
All that chopping and changing has served only to undermine whatever coherence there might have been in policy, and whatever credentials Ministers tell themselves that they have for sound management of the economy. In fact, the electorate could be forgiven for feeling that they have been asked to be unwilling participants in the Chancellor’s conversation with himself about whether or not he is a tax cutter. In his corporation tax announcement he declared the death of the Laffer curve in the explicit rejection of his predecessor’s justification for cutting corporation tax.
No amount of disclaimers at the end of Budget statements can change the reality of the Government’s decisions or their effects. With inflation at its highest in 40 years, the cost of living crisis is causing immense hardship, as we have heard from many colleagues. The Office for Budget Responsibility expects the fall in living standards this year to be the largest in living memory.
Another most basic thing to say about the Government’s tax changes is that they are a clear breach of their 2019 manifesto, which said,
“our plan is to cut taxes for the lowest paid through cutting national insurance.”
National insurance has gone up—it has not been cut. The Prime Minister might assume that no one takes him at his word. After all, why would they? But this rise is the opposite of what he said he would do. Now we know that the Government have also frozen the personal allowance for five years, too.
Let us turn to some of the other taxation options in front of people. The Government have followed our plan to introduce a windfall tax on oil and gas producers’ profits, although they cannot bring themselves to call it that—it is the policy that dare not speak its name. Beyond that, there is more that the Government could do to make the system fairer. The Chancellor, for example, could address some of the tax loopholes that deprive the public finances of much-needed funding that could be paid by some of those most able to pay. I take one example that we have announced: the way that private equity bonuses, otherwise known as carried interest, are treated. These substantial sums are given as bonuses to private equity partners and are taxed at the lower rate.
Sitting suspended for a Division in the House.
Just before the Division bell went, I mentioned our proposals for changing the tax treatment of private equity bonuses. Let us also look at the use of non-dom status to avoid paying UK tax on worldwide earnings. The principle that we adopt on this issue is very simple: if someone makes the United Kingdom their home, they should pay their tax here. Our constituents do not have the luxury of engaging in international tax arbitrage to pay tax in the jurisdiction of their choice. They cannot pay a fee to exercise that choice. That is why we say that non-dom status should be abolished. It simply is not right that those at the top can benefit from an outdated, 200-year-old tax break while most people are struggling with tax rises and the cost of living crisis. The changes we have proposed would bring us into line with other major economies, such as Germany, Canada and France, and create a system that takes into account people who are genuinely here to work for a few years on a temporary basis.
As the economy has changed, the tax system should change too. In business taxation, when it comes to domestic and international companies and the balance between physical and digital companies, the old system of assuming that every business is a physical business based in one country has become out of date. We see tax arbitrage in this world too, with companies shifting profits around to the jurisdiction of their convenience. We see high street businesses and British companies that pay their fair share struggling as large multinationals avoid paying their taxes through the shifting of profits around the world. That is one reason we support the international minimum corporation tax and want the agreement reached on that to be ratified and put into practice. It is also why we want the current system of business rates in the UK to be replaced with a new system of business taxation that is fit for the 21st century. That new system would create a more modern balance between the physical and the digital and between local high streets and out-of-town locations.
The overall tax burden is now the highest it has been in 70 years, while our economic growth rate in the last 12 years has been anaemic. Those two things are related. If the country does not generate enough economic growth, that affects our fiscal position and the incomes people can earn. If the country had continued with the rate of growth in the first decade of this century under the Labour Government, earnings would be thousands of pounds a year higher and the country’s fiscal position would be distinctly healthier. I am not the only one who has noticed it—as the former Financial Secretary to the Treasury, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), made clear in his letter ahead of last week’s no-confidence vote, he believes that the Prime Minister has “no long-term plan”, and that view is shared on both sides of the House.
I will finish with a word about wealth creation, which has been mentioned in the debate, and what it is. Any serious party of Government must support wealth creation just as much as fair wealth distribution. But what is wealth creation? It has to be more than simply the ownership of assets. Wealth creation is the combination of great ideas with great effort. When we see a company in our constituency that has a great product or service—we probably all know one—we want that company to provide good work, reward its workers fairly, succeed and make a profit. That is wealth creation. It is not simply the ownership of assets. If we support that wealth creation and create the wealth the country needs, we should match that to fair taxation that can give us the public services that underpin a good society. It is that combination of wealth creation and a good society that we will continue to support.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Leeds East (Richard Burgon) on securing today’s important debate. I know that he and others feel passionately about it, particularly—as many have mentioned—at a time when households up and down the country are struggling.
I propose to start my response by talking about the tax system and the degree to which wealthier individuals already pay a significant—and proportionately significantly greater—amount in tax. However, before I do, I want to recognise the important contribution that many wealthy individuals make to the UK economy. The Conservative party—this Government—supports entrepreneurship; we support wealth creation and we support ensuring that successful businesses in our constituencies contribute to our local and national economies. However, we also understand the importance of ensuring that wealthy individuals make a fair contribution and pay the tax that is owed.
That is not just our thinking of the moment; it is the way we have dealt with this issue for a number of years. We already have a very progressive income tax system, with the top 5% projected to pay nearly half of all income tax in 2021-22. The hon. Member for Leeds East mentioned the top 1%, and he may know that they will be paying more than 28% of all income tax.
The hon. Member for Hemsworth (Jon Trickett) mentioned other taxes, and the principles I have set out apply well beyond income tax, with several other taxes on wealth across many different economic activities, including the acquisition, holding, transfer and disposal of assets and income derived from assets. Those all generate significant revenue for the public purse. For instance, for this tax year—2022-23—the OBR estimates that there will be inheritance tax revenues of £6.7 billion, capital gains tax revenues of £15 billion and property transactions taxes of £17.1 billion.
The Wealth Tax Commission’s July 2020 report found that, taking the narrowest definition of a tax on wealth—that is, inheritance, estate and gift taxes—UK taxes on wealth were about average compared with other G7 countries. At the same time, Government policy is, and will continue to be, highly redistributive in the round. In 2024-25, on average, households in the lowest income 10% will receive more than £4 in public spending for every £1 they pay in tax.
The hon. Member for Christchurch (Sir Christopher Chope) made some interesting points about the downside of higher taxes. That is why we are committed to ensuring that we are a low-tax economy.
The hon. Member for Leeds East mentioned the Wealth Tax Commission’s report. That was an important piece of work, which set out a significant amount of detail. The hon. Member for Salford and Eccles (Rebecca Long Bailey) suggested an annual wealth tax, but she may be aware that the commission rejected the idea of an ongoing wealth tax, charged on an annual basis, for a range of reasons. It is true that it saw some potential merit in a one-off wealth tax, as the hon. Member for Leeds East said, but that does not provide long-term revenues for the future.
Is the Minister aware that the report did discount an annual wealth tax, and looked at exploring the possibility of an annual wealth tax if it was done in tandem with overall reform of our taxation system? Does she agree that our taxation system is long overdue an overhaul?
The Government are making changes to the tax system, including through a number of measures to ensure that those on the lowest pay are paying fewer taxes. The Wealth Tax Commission identified that there would be some advantages to a one-off tax, but it acknowledged:
“although one can point to entirely new taxes introduced within the recent past, there are none on this scale.”
This is not a matter of lack of political will, as the hon. Member for Brighton, Pavilion (Caroline Lucas) suggested. This is not a measure that we would bring forward, for a variety of good reasons. Denis Healey, a Labour Chancellor of the Exchequer, came to understand that later in life, when he wrote of his time in office in the 1970s:
“We had committed ourselves to a wealth tax; but in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle.”
In my contribution, I referred to eight companies that have purposely avoided tax, without breaking the law, by moving their money overseas. Amazon, Google, Apple and Facebook are four of those eight. Have the Government any intention to put pressure on those companies to ensure that they pay tax? All the people of the United Kingdom could then get the benefit of that through education, health and betterment.
The hon. Gentleman makes an important point. This matter needs international action, and he will know that international action is being taken. More than 130 countries signed up to a new international corporate tax framework in October 2021. That will help to ensure that multinational businesses pay their fair share, with the right companies paying the right amount of tax in the right place.
The hon. Member for Leeds East talked about capital gains tax. We recognise the importance of preserving the incentive for individuals to invest in this country and grow the economy, when they can choose to spend money in any jurisdiction. Having said that, we also recognise the importance of ensuring that a fair amount of tax is paid from assets through capital gains tax.
We have made a number of steps to reform both the dividend tax and the CGT regimes. For example, in 2016, the Government reformed the old, complex system of dividend taxation, simplifying it at the same time as increasing effective rates. In 2018, we reduced the tax-free dividend allowance from £5,000 to £2,000 per annum. In 2020, the Chancellor cut the lifetime limit of CGT entrepreneurs’ relief from £10 million to £1 million.
I would like to touch on the context in which this debate is taking place and the cost of living pressure on families, because those issues are important, as was recognised by many Members, including the hon. Member for Leeds East, the right hon. Member for Hayes and Harlington (John McDonnell) and the hon. Members for Strangford (Jim Shannon) and for Cynon Valley (Beth Winter). The hon. Member for Wansbeck (Ian Lavery) made a passionate speech, recognising the need to look after other people. That is exactly what the Government are trying to do, within the constraints and the global economic position we are in.
We are trying to support other people through our recent announcement of a £37 billion support package. We want to ensure that those who cannot work get support. We are taking a number of measures through the restart and kickstart schemes to ensure that people get into work and can support themselves. We are then ensuring that they are paid properly in work, and hon. Members will know about the increase in the national living wage and our measures to cut taxes to ensure that those in the lowest income brackets get sufficient sums when in work. We are also upskilling people so that they can increase their pay.
My hon. Friend the Member for Christchurch was right to identify that that option is available, if people choose to take it. The Government have set out our tax regime, and that option is available to those who wish to pay more tax.
I was touching on the cost of living, which is important. As many Members have said, this is not just about statistics; it is about people. To give an example, a single mother with two children who works full time on the national living wage will receive £2,500 a year in additional support because of the measures we have taken. On the subject of statistics, the right hon. Member for Hayes and Harlington did mention some, but our latest statistics show that in 2020-21 1.2 million fewer people were in absolute poverty than 10 years earlier, in 2009-10.
Thank you, Sir Edward, for intervening on my behalf. That is the second or third time that the Minister and her colleagues have quoted figures on how much better off certain people will be because of changes to the tax and benefits system. They have not yet been able to answer the question of how much of that additional income has already disappeared because of the increasing cost of the basic essentials of life.
Thank you, Sir Edward. It has been a fantastic debate, and I thank everybody who has attended it and contributed. I want to pick up on two quick points. First, my hon. Friend the Member for Hemsworth (Jon Trickett) raised the issue of how annual wealth taxes could work, and those are an important part of the debate too.
Secondly, they often say that the Back Bench speaks what the Front Bench thinks. That is not always true, but in the case of the hon. Member for Christchurch (Sir Christopher Chope), I think it is. However, he is wrong. He has said, “Let’s keep the wealth creators in this country. Let’s not drive them away.” But those who create the wealth in our society are the 99%. Let us be on their side.
Question put and agreed to.
That this House has considered potential merits of introducing new wealth taxes.
Hinckley National Rail Freight Interchange
I beg to move,
That this House has considered plans for the Hinckley National Rail Freight Interchange.
It is a pleasure to serve under your chairmanship, Sir Edward. I would like to thank Mr Speaker for granting this debate and to welcome the Minister to her place. I also thank colleagues for joining me in this important debate, which touches on issues that affect all our constituents.
In South Leicestershire, we have a proposal—not unlike proposals in other constituencies—for a railway interchange. Let me first add some context. The plans for the Hinckley national rail freight interchange include the construction of an 850,000 square foot logistics hub to the south of the village of Elmesthorpe in my constituency. As a rail freight interchange, it will have the means to be serviced by freight trains as well as heavy goods vehicles. It will be built with access to the existing two-way railway line between Birmingham and Leicester, allowing for freight train entry, and with local road access for HGVs.
The planned site for the Hinckley rail hub would, in its totality, encompass 440 acres of land—for scale, that is about a quarter of the size of Gatwick airport. That area is currently beautiful, rolling south Leicestershire countryside. The site will neighbour the historic and picturesque county villages of Elmesthorpe, Stoney Stanton, Sapcote, Sharnford, Aston Flamville, Potters Marston, Croft, Huncote, Thurlaston and Wigston Parva—collectively and colloquially referred to as the Fosse villages.
My constituents in the Fosse villages contend with overburdened infrastructure at the best of times. There are already heavily congested roads in the area, many of which are narrow and winding and therefore quite unsuited to the levels of traffic that would be seen should this awful proposal be approved, given the HGV traffic entering the site and the alleged approximately 8,000 employees who would be trying to enter it for work.
My hon. Friend will be aware, because we have discussed this before, that a strategic rail freight interchange is under construction in my constituency of South Northamptonshire. Just as he has outlined, however, it covers an enormous area, including a greenfield site, and it borders beautiful villages and residential areas. In fact, now that it is starting to be built, it turns out that Network Rail cannot find the promised rail links that were part of the plan, and my constituents are saying to me, “We told you so. We said it would never be a rail freight interchange; it is just about yet more logistics warehousing.” I am grateful to my hon. Friend for allowing me to put that on the record, and I encourage him to fight against this until there is a proper national framework in place that can stop this type of development-led abuse of local communities.
I thank my right hon. Friend. She brings a great deal of experience to this debate and is an enormous champion for South Northamptonshire. I welcome her contribution, which will certainly help other colleagues understand what the future of this proposal might hold.
I want to touch on some of the areas that might be affected. First, there is the environmental impact that such a site will have on the local area. I am very pleased to see my hon. Friend the Member for Bosworth (Dr Evans) in the Chamber today, along with my hon. Friend the Member for Rugby (Mark Pawsey), whose constituency borders mine. The application proposed directly borders the constituency of my hon. Friend the Member for Bosworth. Undoubtedly many colleagues and many of his constituents in Bosworth will be acutely aware of his vigorous and steadfast campaign to oppose the development. The nearby Burbage Common and Woods, a site of special scientific interest, which is based in his constituency, is a beautiful 200-acre area of woodland and grassland, and a place enjoyed and frequented by our constituents. It is also home to rare wild flowers, over 20 species of butterflies, over 100 different species of fungi and 25 different species of mammal. The rail freight interchange proposal for construction is right next to that important common, and without doubt the development would have a hugely detrimental effect on that area of natural beauty.
I have already mentioned the importance of the applications’ impact on other Members’ constituencies, particularly with regard to the issue of infrastructure such as that around Fosse villages. However, with little information available as to how HGVs will service the site or how the 8,000 alleged new employees will make their way there at all hours of the day, there is a very real and pressing concern among my constituents that their local area, villages and streets are at a real risk of being overburdened.
My hon. Friend is making a strong case in respect of a very substantial development of warehousing. It is obvious which route many of the HGVs will take: one junction on the M69 and then on to the A5, which we know is a strategic road. We had a debate in this Chamber only a few weeks ago to consider the entire upgrade of the A5 in the midlands. Does my hon. Friend agree with me that the proposal should not be permitted to proceed without the complete dualling of the A5?
I could not agree more with my hon. Friend. He is absolutely correct. We have been debating the importance of that particular road in this Chamber, in the Commons Chamber and elsewhere among the parliamentary community and with Government for years now. It would be risible if the Government approved the rail freight interchange without dualling the A5, as has been requested by hon. Members over many years.
Europe’s largest logistics park, Magna Park, is in very close proximity to where it is proposed the Hinckley rail freight interchange will be developed. Also, there are already a number of rail freight interchanges within relatively close proximity to the planned site. We have the Birmingham intermodal freight terminal, which is a mere 16 miles from the village of Elmesthorpe. The Daventry international rail freight terminal or DIRFT is located a mere 20 miles away, the Hams Hall rail freight terminal is 24 miles away, the Burton rail terminal is 26 miles away, East Midlands Gateway is 29 miles away and Northampton Gateway is only 36 miles away. However, as we have just heard from my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), with her wealth of experience, we are seeing that that is perhaps a fig leaf and not quite a rail freight interchange, but more an excuse for a large-scale logistics park. We also have the Birmingham Freightliner terminal, which is only 36 miles away. It cannot be right to burden another part of the midlands with another very large rail freight interchange. The Government must develop a strategy this year on where the location of these rail freight interchanges will best service our country.
My hon. Friend is making a powerful speech. Is that not the exact point? This is not about nimbyism; it is about having a national strategy so we can achieve our net-zero goals while protecting our communities. Up and down the land, rail freight exchanges will be going in higgledy-piggledy with no true thought as to how we should tesselate this all together.
I absolutely share the concern of my hon. Friend the Member for Bosworth (Dr Evans) and he reemphasises the need for having a national framework policy for the location of the sites. I am not the only one making the point. Other hon. Members have made the case for siting these big infrastructure projects in their logical place, near the ports and airports that import into the United Kingdom the freight that is then distributed across our country. It is frankly bordering on ludicrous to site so many of these rail freight interchanges in the geographic centre of our country. It makes no sense other than to the developers. I urge Government to think very carefully about their future strategy on where rail freight interchanges should be sited.
I want to emphasise the point that some developers purport that they are applying for a railway freight interchange, when in fact it is a fig leaf for just another enormous logistics park. While I appreciate that the Minister is not responsible for the siting of general logistics parks, she must bear in mind the experience of my right hon. Friend the Member for South Northamptonshire. The danger is that on application they may appear to be rail freight interchanges, but they might turn out in practice to be simply another large-scale logistics park. Given that my constituency already has the doubling of Magna Park Lutterworth, making it Europe’s largest logistics park, at what point do we say that enough is enough? As my hon. Friend the Member for Bosworth correctly said, this is not about nimbyism, it is about fairness and justice and about ensuring that the Government’s priority of protecting our beautiful country is met in practice. It is not a decision that will be led by local Government; it is a decision that will be taken by central Government and by the Minister.
I want to give time to my hon. Friend the Member for Bosworth to make a few points as well—
In that case, let me carry on and say that the level crossing at Narborough is already viewed by many residents as something of an inconvenience. It is currently closed for 20 minutes per hour at peak time. If the rail freight interchange goes through, the closure is expected to double to 40 minutes every hour. The people of Narborough and the surrounding villages cannot accept that. That would be a burden too far. It is tolerated at the moment because the railway station at Narborough is an important transport hub for local people, but to have the level crossing down for 40 minutes of every hour is simply unacceptable. It would be a considerable source of disruption for local people.
I mention gently to the Minister, who does a good job overall in her Department, that my team and I have tried and failed to get a meeting with the Secretary of State on this big issue. To hide behind the cloak that this is a quasi-judicial decision and therefore we cannot meet is nonsense. The Department meets the developers, and the developers are able to meet civil servants. Why are MPs and other stakeholders objecting to the proposal prohibited from meeting civil servants?
My hon. Friend continues to make a fantastic speech. Does he agree that this needs a joined-up approach from the bottom-up? Our constituents, the parish councils, the borough councils, the county council and the MPs are all saying exactly the same thing. In my survey when we sent out 12,000 leaflets, 96% of the responses were against the proposal. That surely must count for something.
My hon. Friend makes another excellent intervention. All the stakeholders are putting forward very reasonable reasons why it would be a dreadful error for the Minister and her team to approve the Hinckley rail freight interchange. They must be listened to. The points being made by local government, charitable groups and parish councils are not nimbyism; they are about fairness and practicality. The rail freight interchanges should be located in different parts of the country where the freight comes into the United Kingdom.
As I said, I have asked for several meetings; I appreciate the Minister has not been in post for long, but I would appreciate if she would confirm that she will meet me, my hon. Friend the Member for Bosworth and the stakeholders to discuss the application. If she does not meet me, will she explain why? Will she follow up with a letter so that I can take that up directly with the Prime Minister? Half an hour ago, I had a meeting with the Prime Minister’s No. 10 team in which I raised this issue and was promised that it would be looked into. I ask kindly that the Minister gives a clear response on whether she will meet me and the stakeholders to discuss the concerns about the rail freight interchange.
I entirely share the very understandable concerns of my constituents about the plans for the Hinckley national rail freight interchange. The fantastic district councillors for the Fosse villages have been working tirelessly on behalf of local residents to oppose the proposals. They have attended every public meeting and engagement event. I pay tribute to the brilliant work of councillors Maggie Wright, Iain Hewson and Mike Shirley, as well as excellent Conservative-led Blaby District Council and its leader Councillor Terry Richardson, who have been vociferous in doing their utmost to stand up for local people and voice their very reasonable collective concerns.
I also pay tribute to the Friends of Narborough Station group, the Save Burbage Common group and the Elmsthorpe Stands Together group—all collections of local people who have volunteered and devoted much of their free time to opposing the plans, and who have been terrific and tireless in doing so. I thank, in particular, my hon. Friend for Bosworth and his team, alongside my team, for the excellent work that we continue to do together to represent our constituents on this issue.
It goes without saying that the reasons against the proposal are varied and multiple but are all of equal importance. With little or no legislation in place for the provision and placement of these logistics hubs, I fear for rural areas like South Leicestershire, which already carry their fair share and do their part. They are at a significant risk of being overburdened with gross overdevelopment. I ask my right hon. Friend the Minister and the Department to look into this matter urgently, to take the concerns of my constituents seriously and to see that the plans for the Hinckley national rail freight interchange are given, at the very least, the necessary scrutiny that they both require and deserve.
What a pleasure it is to serve under your chairmanship today in Westminster Hall, Sir Edward. I thank my hon. Friend the Member for South Leicestershire (Alberto Costa) for securing this important debate on proposals for the Hinckley national rail freight interchange, which I understand is currently at pre-application stage.
I thank my hon. Friends the Members for Bosworth (Dr Evans) and for Rugby (Mark Pawsey) and my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for their engagement on this matter and their contributions and interventions in the debate. This is an important issue and I welcome the representations made by my hon. Friend the Member for South Leicestershire reflecting his constituency interests. I ensure him that we will continue to listen to all views on this matter.
As my hon. Friend will be aware, it is for Tritax Symmetry, the company proposing the development at Hinckley, to decide whether and when to submit a development consent order application for the scheme. Should it choose to submit an application, the Planning Inspectorate will decide if it should be accepted. If it is, my hon. Friend and his constituents will be able to make further representations on the scheme and take part in the examination process.
The Minister is absolutely right that it is Tritax Symmetry. Some of its consultations have raised real concerns and we have made several complaints about the way in which the consultations took place. She may not have the answer to hand, but I would be grateful if she would be able to set out what rebuttals we may have as national legislators to make sure that the process is followed to the T and that complaints do not happen again.
I will set out in the process in a bit more detail, but if there are specific technical points I am happy to follow up in writing on what I can and cannot do, given the constraints. I encourage my hon. Friend and his constituents to fully engage with the formal DCO process and to submit comments when appropriate to do so to ensure that they are considered and accounted for in the decision-making process.
As described in the responses to several letters in recent months, the Secretary of State for Transport is the decision maker for all applications for transport DCOs. Decisions on DCO applications are quasi-judicial and need to be based on planning matters only. I hope my hon. Friends will appreciate that in anticipation of an application being submitted it would not be appropriate for me to take part in any discussion on the pros and cons of the proposal. That is to ensure that the process is followed correctly and remains fair to all parties.
Before I set out the Government’s policy in relation to the development of strategic rail freight interchanges or SRFIs, I want to provide some important context for today’s debate. The Government recognise the important benefits that rail freight offers to the UK. It plays an important role in helping the Government to meet our greenhouse gas legislative targets, as it is one of the most carbon-efficient ways of moving goods over long distances.
On average, a rail freight train emits around a quarter of the carbon dioxide emissions of a heavy goods vehicle per tonne per kilometre travelled. The sector also delivers economic and social benefits through cost savings to industry, as well as employment and reducing congestion, with rail freight resulting in around 7 million fewer lorry journeys each year. Industry estimates that rail freight provides £2.5 billion in economic and social benefits to the country, 90% of which is likely to accrue to freight customers and wider society outside of London and the south-east.
This Government are committed to the growth of the rail freight sector and recognise the role of rail freight in helping us to achieve net zero carbon emissions by 2050 and supporting resilient supply chains. We have invested £235 million in improving capacity and capability for rail freight during 2014 and 2019, and we continue to explore the case for further investment to the rail network enhancement pipeline.
We also continue to provide £20 million of funding per annum for a freight grant scheme to support the carriage of freight by rail and water on routes where road haulage has an economic advantage. That is expected to remove the equivalent of 900,000 heavy goods vehicles from our roads, and that equates to saving 52,000 tonnes of carbon dioxide emissions.
I take this opportunity to highlight the drivers of the need for strategic rail freight interchanges, which can all be linked to the broader objective for rail freight. The right infrastructure needs to be in place to support our ambition of achieving growth and the benefits that I mentioned. Although rail freight makes up only 9% of the total goods moved in the UK, it is nevertheless an important part of building resilient supply chains. It is, therefore, a Government priority to support the sector in its endeavours to help us to get critical goods, such as medicines or supermarket supplies, to where they need to go. We hope to set out soon a future of freight plan outlining how Government intend to support the sector as a whole.
As I have said, I will not be drawn into what the future of freight plan will set out, as I am sure my hon. Friend will understand. However, I can say that the plan will be coming forward and it will outline how we intend to support the sector as a whole.
My intervention is about that point, and to ask if the Minister could address the point that my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) raised about guarantees. The Minister is making a strong case as to why freight should move from road to rail, but what guarantees can she give that the granting of any application will result in the provision of a rail freight terminal? My right hon. Friend indicated that that was the basis of an application that was granted, but the rail link has not been created.
As I have said, we will have to wait until the plan comes forward. In broader terms, I want to touch on the way in which hon. Members—particularly my hon. Friend the Member for South Leicestershire—and their constituents can engage in the process of consultation.
The national networks national policy statement outlines Government policy to support the development of an expanded network of SRFIs and considers such infra-structure at a certain scale to be of national significance. It states that there is a
“need for an expanded network of…SRFIs”
and provides a framework for developers to bring forward proposals through the nationally significant infrastructure projects regime if they are deemed operationally and commercially viable.
On the process for considering development consent orders for SRFIs, first and foremost it is important to remember that all applications for DCOs need to comply with the relevant legislation, as set out in the Planning Act 2008, and policy, which are tightly bound by statutory timescales. The application and examination into a proposed development is undertaken by the Planning Inspectorate on behalf of the Secretary of State for Transport. The Planning Inspectorate will decide whether the application meets the required standard before proceeding to an examination.
Part of the consideration the Planning Inspectorate must undertake in deciding whether the application can progress to examination is whether it has fulfilled its statutory duty to consult with local communities and local authorities affected by the scheme; that is important. Indeed, community engagement is fundamental to the operation of the NSIP regime. Developers are required to consult extensively before an application is submitted and considered. Where consultation has not been carried out in line with the statutory requirements, the Planning Inspectorate can refuse to accept an application.
Local authorities and communities also have the right to be involved during the examination of a project. They can set out their views in written representations, which will be taken into account in decision making. With that in mind, I reiterate that it is essential that my hon. Friend the Member for South Leicestershire and his constituents take every opportunity to make their concerns heard as part of the consultation process. That includes any concerns regarding Narborough railway station, which he mentioned in his speech today, the level crossing in the village, or any perceived impacts on the local road network.
The Planning Inspectorate has six months to carry out the examination of the proposed development, and a report of the findings and conclusions on the proposed development, including a recommendation, is then issued by the Planning Inspectorate to the Secretary of State. The Secretary of State then has three months to issue a decision on the proposal. If for any reason a decision cannot be issued on time, a written ministerial statement, setting out a new deadline, will need to be read out in Parliament.
To conclude, the rail freight sector is vital to the prosperity of the UK economy and delivers important environmental and social benefits. An expanded network of strategic rail freight interchanges is key to harnessing the benefits of rail freight, and the Government support the development of this work. Although the Government do not specify where the locations should be, it is for private sector developers to bring forward proposals that are viable, and have regard to the guidance of the policy statement. As set out in the Williams-Shapps plan for rail, the Government are committed to exploring
“ways to enable future Strategic Rail Freight Interchanges to be located more appropriately around the country.”
Question put and agreed to.
Future Hydrogen Economy
I beg to move,
That this House has considered the future hydrogen economy.
It is a pleasure to serve under your chairmanship, Sir Edward. Hydrogen is the most abundant element on Earth. The word “hydrogen” derives from “hydro”, meaning water, and “gene”, meaning producing, which is apt, as the product of burning hydrogen in oxygen is pure water. As I will go on to explain, in an era when we are ever more conscious of our carbon emissions and greenhouse gases, hydrogen provides a solution.
The purpose of this debate is, first, to take us on a journey back to the future—we do not need a DeLorean unless it is hydrogen powered—because just as hydrogen is a fuel of the past, it will be a fuel of the future, too. The three primary areas that I want to touch on today are hydrogen for heating our homes, in transportation and freight, and its use in the decarbonisation of industry. This is where I make a link from past to future. For decades, we heated our homes with town gas, containing more than 50% hydrogen; hydrogen was used to power engines throughout the 19th and 20th centuries; and hydrogen, as a by-product in many industrial processes, has been used as a fuel in furnaces since the beginning of the industrial revolution. In recent times, we have turned our gaze to what were once thought to be cleaner and safer fuels, such as methane, and to fuels that have always been easier, such as petrol and diesel, but we know that we cannot go on like this.
The global challenges that we face in relation to climate change and tackling carbon emissions are well worn arguments that I do not intend to go over today. To achieve net zero, we have to realise the hydrogen economy, and even the Government’s own analysis sees 20% to 35% of UK energy consumption being hydrogen based by 2050. To get to that point, a range of vital steps need to be taken to recognise the potential of hydrogen as an innovative solution to our problems, as it was in the past, while realising that technological improvement, increased safety, innovation and popular support make this element even more beneficial than it was before.
An easy first step to take is to ensure that we have the right regulatory regime to support a future hydrogen economy. We must make changes to the gas safety management regulations to allow hydrogen to be blended within the gas network up to 20%. That has already been proven to be safe through programmes such as HyDeploy and the ongoing blend at Winlaton in Gateshead. By blending in 20% hydrogen within the gas network, we can immediately begin decarbonising our gas network, with no impact on consumers and minimal impact on the network, but with a high impact on our emission savings—an estimated 6% saving in heat alone.
That brings me to my next ask of the Government, which is to mandate the roll-out of hydrogen-ready boilers as early as possible. The roll-out of hydrogen-ready boilers, much like that of high-definition-ready TVs, will allow us to install millions of boilers in people’s homes in the coming years, so that we are already ahead of the game when the time comes to decide whether to use 100% hydrogen in the gas network. Some 1.7 million boilers are changed in the UK every year, so if we were to mandate the use of hydrogen-ready boilers today, half of all homes in the UK that are currently connected to the gas network would be ready for the hydrogen switch by 2030, with no additional cost to the taxpayer. This is a no-lose scenario, because even if the Government decide not to go ahead with 100% hydrogen in the gas network, the boilers will continue to function as normal on natural gas.
That brings me to my next ask of the Government, who are rightly seeking evidence through a hydrogen village trial. As the Minister knows, Redcar was successful in receiving Ofgem’s approval for the next stage, alongside Ellesmere Port in the north-west. Over the next year, both Redcar and Ellesmere Port will be putting together their business cases for why their projects should get the go-ahead. Subject to any business case, the Minister should consider greenlighting both proposals. As I said in a debate in this Chamber a few weeks ago, we do not want a hydrogen village; we want a hydrogen UK, and having as much evidence as possible from the trials in Ellesmere Port and Redcar will allow us to progress.
I want to quickly turn to hydrogen in transport, which I believe is vital. Although the Minister is not directly responsible for this area, I would love to see him working alongside the fantastic Under-Secretary of State for Transport, my hon. Friend the Member for Copeland (Trudy Harrison), on amending the renewable transport fuel obligation to include all types of low-carbon hydrogen. Hydrogen has the ability to transform both freight and passenger travel, but it is locked in the same chicken-and-egg situation that we faced with electric cars. Were it not for the roll-out of charging points up and down the country, I do not think we would have seen the electric vehicle take-up that we have.
Today, there are more than 40,000 publicly available electric charging points across Great Britain, compared with a measly 14 hydrogen refuelling stations. Clearly, a key component of expanding the use of hydrogen in both freight and passenger vehicles requires the scaling up of refuelling stations, and I am pleased that decision makers are beginning to recognise this opportunity. In Teesside, we have the UK’s first hydrogen transport hub, which includes an expansion in hydrogen refuelling stations, with one already based at Teesside airport and plans for the UK’s first hydrogen trains to run on the Saltburn-to-Darlington local line.
The final key point that I would like to address is the role that hydrogen can play in decarbonising industry if we provide the storage and distribution networks required to meet its ambitions. I was so pleased to see the Government double their hydrogen targets to 10 gigawatts by 2030, and we in Teesside stand ready to produce a significant portion of that through investments from BP, Kellas Midstream and EDF. There is no use in producing all that hydrogen if it has nowhere to go, however, which is why Project Union—National Grid’s endeavour to create a hydrogen backbone that spans the UK, hopefully starting in Teesside and linking to Humberside—is so important.
As well as distribution, we have to consider storage by looking at underground salt caverns, like those of SSE, and Centrica’s proposal to turn the Rough reservoir—once the nation’s main gas storage—into our future hydrogen store. To do that, however, we need to look at the regulation in this area, and a decision needs to be made this year to avoid having to decommission Rough in line with the North Sea Transition Authority requirements. In my view, the Department for Business, Energy and Industrial Strategy should consider extending Rough’s role in methane storage in the short to medium term, thereby preventing decommissioning, but Rough will be key as the UK’s undersea hydrogen storage in the long term.
I hope I have given the Minister some food for thought. Hydrogen is not a groundbreaking fuel of the past; it offers revolutionary potential for the future. In 1874, Jules Verne wrote:
“Yes, my friends, I believe that water will one day be employed as fuel, that hydrogen and oxygen which constitute it, used singly or together, will furnish an inexhaustible source of heat and light, of an intensity of which coal is not capable.”
We can realise his vision through nurturing innovative and pioneering partnerships between Government and industry to help us to harness the fuel of the future, achieve net zero and build a future hydrogen economy.
What a great pleasure it is to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Redcar (Jacob Young) on securing this debate and on an excellent opening, which really set the scene. It reminded me that the last time I took part in a debate on hydrogen in this Chamber—I think the hon. Member for Warrington South (Andy Carter) was in his place then as well—the Government had not yet decided where they were going to place their favour. The current Secretary of State, who was then the Minister for business, energy and clean growth, responded to that debate. I urged him not to make it into a beauty contest, but to spread the investment around. To be fair to the Government, they have done that, and I welcome the support that they have given.
I find the debate on hydrogen somewhat depressing. Many people in what we might term the green lobby, with whom I share a lot of aims and values, look on the hydrogen project in my area with disdain because it is the wrong type of hydrogen; it is blue hydrogen, not green. I wish people would get behind the programme for all the reasons that the hon. Member for Redcar has just set out, but also because of the basic fact that we are not where we want to be. We are not going to get there yet, but the current proposals—whether for the cluster in the north-east or in my area, with the Mersey Dee Alliance on the Cheshire coastline—will be a stepping stone on the way to those aims.
There is clearly a gap in energy at the moment. Offshore wind provides only 2% of our electricity. I have to say to the Government and Conservative Members that I would increase onshore wind as well to help with the production of hydrogen. However, for all the reasons the hon. Member for Redcar mentioned, I still think that hydrogen is the way forward, particularly in my area, where are there are lots of energy intensive users. It is well known that in the small area of coastline that stretches from Eastham through Ellesmere Port—just north of Chester, I hasten to add—and around through Runcorn and Widnes, 5% of the nation’s entire electricity is consumed in about 14 miles. That is why my area is such an important place for hydrogen investment.
The HyNet North West scheme, which I support, has been demand-driven by big industry in our region. Incidentally, one reason for that is that it differentiates companies for their customers. I have heard about one manufacturer, whose customers are looking to ensure that their supply chain is greened and becomes net zero, taking us forward in that aim. Anything that can reduce the industry’s carbon footprint—even a step towards that aim—should be welcomed.
I agree with the hon. Member for Redcar that we need to double the 2030 aspirations. Production of 10 GW is good, but at the moment we might not have more than 1 GW available on either coast. There is real demand, particularly from industrial users, to go faster, to increase pace and ambition and to improve storage and distribution capacity; the hon. Gentleman made that point perfectly. It is great making all this hydrogen, but if we have nowhere to put it and nothing to do with it, it is, frankly, a waste.
I have talked about industrial users, but I make a plea for commercial and passenger vehicle usage. I wrote an article not long ago with the hon. Member for North Antrim (Ian Paisley), in whose constituency Wrightbus is based, about potentially having a Government scrappage scheme for older passenger buses and passenger coaches to help to convert them to hydrogen more quickly.
I was very fortunate to go on a delegation to the United States a couple of weeks ago, through the British-American Parliamentary Group, to look at electric and autonomous vehicles. They are absolutely seeing hydrogen as a complementary technology that will play its part, next to fully electric vehicles, particularly, again, for long-distance distribution—lorries, essentially—and for buses. They are well ahead of us.
I will finish by making a plea, and a plug, to the Minister. My area, which is a cross-border area—Cheshire, Merseyside and north Wales—operates the Mersey Dee Alliance. We try to break down the barriers that exist politically and administratively, but do not exist for businesses, to get the most strategic approach. Energy has been one of our big areas of interest and investment.
The Mersey Dee Alliance, which runs that cross-border area, is seeking £150,000 to undertake a feasibility study into the establishment of a UK hydrogen demonstration skill centre, to be located in the University of Chester’s Thornton science park, in the constituency of my neighbour, the hon. Member for Ellesmere Port and Neston (Justin Madders). The proposal has been made in partnership with the University of Chester, HyNet, the Mersey Dee Alliance, our local authorities and the Welsh Government.
The proposed hydrogen demonstration centre has its origin in the Mersey Dee Alliance’s strategic partnership with HyNet, the proximity of the University of Chester’s Thornton science park to the plentiful hydrogen supply at the Essar refinery in Stanlow, and the pressing need to switch the fuel of our local economy’s industrial base from carbon-based sources to blue hydrogen, with carbon capture and storage, of course.
The intention of the proposed centre is to support the transition of the UK economy from using carbon-based fuels—
Thank you, Sir Edward; I will do what I can on that. It is a pleasure to serve with you in the Chair. I congratulate my hon. Friend the Member for Redcar (Jacob Young) on securing this debate.
The Government have adopted a cluster approach to the promotion of the hydrogen economy. I fully understand the rationale for doing so, but the regulatory framework must be sufficiently flexible, so that more decentralised areas, such as the east of England, are able to realise their full potential. That way, we can not only more readily realise our decarbonisation goals but create new and exciting jobs.
In East Anglia we have a real opportunity to be a major producer, user and exporter of hydrogen. We have an abundance of resources, infrastructure—both on land and at sea—that can be readily retrofitted, and developers keen to step up to the plate, provided that the right policies are in place. Hydrogen East, last month, produced its proposal and proposed next steps for developing a clean hydrogen cluster in the east of England, which I shall forward to my right hon. Friend the Minister for his bedside reading.
I shall briefly highlight the projects that have already been initiated and outline those bigger opportunities that are at the design stage, which can have a national—and quite likely an international—impact. There are some exciting projects, as I said, that are already in the pipeline that highlight the role that hydrogen can play across the East Anglian region. Those include the Freeport East project centred on Felixstowe and Harwich, which could see the early adoption of hydrogen for portside related operation and other local uses.
In Lowestoft, in my constituency, there is the Lowestoft PowerPark project, which can lead to hydrogen being used to power municipal buses and the refuse fleet, as well as the development of flexible generation, or flexgen. There is also the Bacton energy hub project, using the infrastructure laid down over 60 years to serve the oil and gas industry in the southern North sea. In addition, work is ongoing on the switchover of agricultural and other off-road vehicles, especially in remote rural areas.
Those schemes are very much paving the way and laying the foundations for larger projects, including the development of electrolysis capacity in conjunction with nuclear energy and heat to support the proposed development at Sizewell C, which will be the first ever major construction project to use hydrogen vehicles at scale.
Cadent and National Grid’s new project, Capital Hydrogen, which is due to be launched in the autumn, will produce hydrogen in East Anglia not only to serve homes and businesses in the area, but to power London. Cadent has also identified five points in the east of England where hydrogen could be injected almost immediately to kick-start the move towards the 20% hydrogen blend that can be used in the existing gas network, with no need to change appliances or adjust the network. That project will help to stimulate rapid growth in the amount of low-carbon hydrogen produced in the region, but to make it happen, the Government need to change the regulations and allow hydrogen into the network.
In conclusion, East Anglia does not want a hydrogen economy in which we adopt second-generation or third-generation technologies and assets from other areas. What we want is to maximise our own potential and build our very own bespoke network; what we need is a framework that incentivises small-scale projects to be developed, in the knowledge that they can be scaled up in due course. I hope that in his summing up, my right hon. Friend the Minister will confirm that he is up for that challenge.
It is a pleasure to serve under your chairmanship, Sir Edward, and I am grateful to the hon. Member for Redcar (Jacob Young) for securing this important debate.
There was much to criticise in the Government’s energy security strategy, from its wholly unrealistic targets on new nuclear to its refusal to stand up to the nimbyism of Tory Back Benchers by making the reforms to planning law that are needed to unleash the full potential of onshore wind. At least, though, there are signs of genuine progress when it comes to hydrogen, with the UK’s hydrogen production target more than doubling to at least 10 GW by 2030. The Government’s stated commitment to a hydrogen-powered economy will no doubt come as welcome news to people living across the north-west of England and in north Wales. We are proudly home to the HyNet low-carbon industrial cluster, which by 2030 will be leading the way in carbon capture and storage technology and the production of low-carbon hydrogen. The extraordinary potential of that world-leading project was recognised last year, when it was successful in its efforts to become one of the first two carbon capture and storage clusters in the UK.
However, while the success of HyNet in our region hints at what is possible when we invest in the future of hydrogen, Ministers are yet to prove convincingly that they are capable of delivering on the promise of a hydrogen revolution, and we should not play down just how big a challenge we face. Low-carbon hydrogen remains in its infancy. If we are serious about making the UK a world leader in low-carbon hydrogen production, we must be prepared to use every resource at our disposal, including the extraordinary expertise and innovation that can be found today in businesses in every corner of the country.
That is why I am so concerned that the UK Government continue to make the regions and nations of the UK compete against one another to secure vital investment. I know that the hon. Member for Redcar took as much pride in the success of the east coast cluster last year as I did in HyNet’s, but our Scottish colleagues have every right to bemoan the lack of success of the Acorn development in north-east Scotland. Surely the time has come for the Government to accept that these projects deserve to be allowed to progress at their natural pace, rather than being held back by Ministers’ continued insistence on using a failed and entirely arbitrary sequencing process. All those projects will be essential to realising the potential of a hydrogen-powered economy, and they all deserve our support.
We also need to seriously consider whether enough is being done to support the development of green hydrogen. While it is undeniable that investing in blue hydrogen is necessary in the short to medium term, I am sure we all agree that the ultimate goal is to see our country powered by clean, green hydrogen produced from wholly renewable sources. However, I am afraid the Government are responsible for a serious lack of ambition in that space. While our neighbours in Europe invest heavily in green hydrogen production, the Government are aiming for just half of their 10 GW hydrogen power target to be produced through electrolysis. Even then, there is little evidence that sufficient progress is being made to make that target a reality.
In fact, the case for investing in green hydrogen has become all the more inarguable since the Russian invasion of Ukraine earlier this year. Putin’s appalling onslaught on that country has provided the west with important lessons on the necessity of ending our reliance on foreign energy supplies and has sent gas prices soaring, leading industry experts to conclude that it is now more affordable in Europe to produce green hydrogen than it is blue.
I urge the Minister to look at what more the Government could be doing to support green hydrogen, including considering whether grants would be a more appropriate funding mechanism for green hydrogen than the contracts for difference scheme. Too often before, we have seen the Prime Minister make grand pronouncements about the green transition but failed miserably to follow up with meaningful action. That must not be allowed to happen again. It is time for the Government to prove that they are able to make the promise of a hydrogen-powered economy a reality.
Thank you for calling me, Sir Edward. It is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Redcar (Jacob Young) for calling this important debate. As I am both a Member of Parliament from the midlands and co-chair of the all-party parliamentary group on the midlands engine, I want to focus my remarks on the midlands region.
In February 2022, the midlands engine set out its hydrogen technologies strategy, which draws on the exceptional manufacturing capabilities in the midlands and the immense potential to expand renewable energy production within the region. Expanding the hydrogen economy of the midlands will act as a catalyst for driving economic growth and new job markets in the region. The midlands has always led on manufacturing and has the infrastructure in place to be a world leader in hydrogen production. It is essential that that potential is not wasted.
The potential benefits on offer include the opportunity to create 85,000 jobs through production, supply and storage of hydrogen, more than 60,000 jobs through the decarbonisation of heavy goods vehicles and refuelling infrastructure and almost 2,000 jobs supporting the use of hydrogen as an alternative aviation fuel, all with the potential to contribute £10 billion gross value added to the midlands economy. The midlands plan for hydrogen goes as far as to set out industries in which there is potential to create more job and apprenticeship opportunities, such as domestic and commercial heating, low-carbon energy generation, public transport, freight, logistics and construction equipment.
There are already some fantastic businesses in the midlands, working to put the UK on the map for hydrogen production. One such business is GeoPura in the east midlands, which I have been lucky enough to visit in my capacity as co-chair of the all-party parliamentary group. GeoPura uses renewable energy, usually solar PV or wind, to create hydrogen and, in turn, hydrogen-based zero-emission fuels. That is then transported to areas where a local generator converts it into electrical power. From start to finish, the process is completely clean and carbon-free and the only by-product from the process is water. GeoPura energy is currently being used in transport, construction, film and television, as well as outdoor events such as festivals. Businesses such as that in the midlands have the potential to ensure that the UK leads in hydrogen technology and production.
I will conclude today by saying that the Government have made it clear that in order to achieve net zero by 2050, we must ensure that we are leading on the low-carbon hydrogen technologies front. Industrial heartlands such as the midlands are ready to be at the forefront of the hydrogen economy and ensure that the UK continues to take a global lead on the green industrial revolution that we hope for.
It is always a pleasure to speak in Westminster Hall, no matter what. I congratulate the hon. Member for Redcar (Jacob Young) on setting the scene so very well and giving us all the opportunity to participate by doing that. The thrust of my contribution will be to insist—in a gentle, nice way—that Northern Ireland should be very much a part of the planned future hydrogen strategy. I am ever mindful of the Government’s legally binding targets under the Climate Change Act 2008, and the fact that the Climate Change Committee’s 2018 report, “Hydrogen in a low-carbon economy”, found hydrogen to be a credible option. The Government have committed themselves very much to the net zero target and to ensuring that hydrogen is an energy opportunity that we can all take advantage of.
A hydrogen economy has the potential to create or safeguard a massive 167,000 jobs—we cannot ignore that, and we look forward to some of those jobs coming to Northern Ireland—to provide £10 billion in gross value added to the UK economy, as mentioned by the hon. Member for Broxtowe (Darren Henry), and to reduce CO2 emissions in the region by 29%. These are helpful targets, and they show that the Government are totally committed to this project. I look forward to the Minister’s response; he always speaks with knowledge in responding to our questions.
Recent work to drive the hydrogen agenda has seen progress move beyond the midlands, with plans to link key transport hubs: Immingham, the UK’s largest port by tonnage and the biggest deep-water port on the Humber; East Midlands airport, the UK’s busiest pure cargo airport; and the Tees valley, where plans are already in motion to develop a multi-modal hydrogen transport hub. Northern Ireland has also launched an ambitious new energy strategy, which includes plans for hydrogen as a key energy source for the future. I am keen to reiterate that and to push for that to happen.
The hydrogen strategy set out a number of things that should happen to expand domestic hydrogen production. They include setting aside £240 million for the net zero hydrogen fund, the significant development and scale-up of hydrogen network and storage infra-structure, with a £68 million commitment, and scaling up the use of low-carbon hydrogen, with heating buildings and transport trials and pilot projects planned—the hon. Member for Redcar (Jacob Young) referred to that. The strategy also talks about a market framework for hydrogen and a “supportive regulatory framework”. Northern Ireland wants to be part of that hydrogen plan, Minister. I know from the answers that he has given to me in the past, and also to my hon. Friend the Member for North Antrim (Ian Paisley), that he is committed to that, but it would be nice to have it in Hansard.
The hon. Member for Redcar referred to the village-scale trial that his constituency hopes to be part of. I do not care where it is, as long as it happens, although I would love to know the time scale for whenever the Minister thinks it would be completed and, then, how the plan would be developed for the rest of the United Kingdom.
My hon. Friend the Member for North Antrim has previously referred in questions to building hydrogen products that the public will ultimately use, such as buses, trains and heavy goods vehicles. The Minister replied to that in a very positive fashion—I think he referred to Glasgow City Council’s commitment—but I would like to see what is actually meant by
“further engagement with the Northern Ireland Executive”.—[Official Report, 22 February 2022; Vol. 709, c. 160.]
My hon. Friend also previously referred in a question to the “golden thread”, which I thought was quite a good saying—the golden thread that keeps together all this great United Kingdom of Great Britain and Northern Ireland, where all of us, in all the regions, can benefit. The Minister without Portfolio, the right hon. Member for Selby and Ainsty (Nigel Adams), referred to
“£100 million of new funding for the net zero innovation portfolio”.—[Official Report, 13 January 2022; Vol. 706, c. 630.]
I very much want Northern Ireland to be a part of that.
To conclude, “The Path to Net Zero Energy”, published in December, has set long-term sustainability targets for the region’s energy sector, including plans to fully decarbonise by 2050. Cost is also a key focus in the plan, in order to increase the affordability of low-carbon forms of energy. Other targets include the delivery of energy savings of 25% from buildings and industry by 2030, as well as doubling the size of Northern Ireland’s low-carbon and renewable energy economy.
It is a pleasure to take part in this debate. I thank my hon. Friend the Member for Redcar (Jacob Young) for securing it. It is always a pleasure to follow the hon. Member for Strangford (Jim Shannon) and to speak in the same debate as my hon. Friend the Member for City of Chester (Christian Matheson). I always worry when I speak after him that he may well have said everything I want to say. I will talk specifically about HyNet and will expand on some of the points that he has already raised.
HyNet was a momentous moment for the region. Securing track 1 status was a very strong signal for businesses in Warrington and the wider Cheshire/Mersey/Dee network area that we are serious about levelling up, serious about creating and securing well-paid jobs and about making our environment a greener place to live and work. The Minister knows that, because he came to Warrington when we launched the HyNet project and saw the transition work at the UK’s largest can recycling plant at Novelis in Latchford, which is going to transfer over to hydrogen fuel.
For the past two years, I have been pressing his colleagues and the Secretary of State to proceed with the plans so that we can get maximum benefit to the region and the country. HyNet will give a massive boost to the supply chain and will work with younger people and apprentices to upskill and make the energy sector a more attractive industry to work in. In fact, one of my local colleges that I visited yesterday spoke to me about the opportunity to create more T-levels in the green sector. The Department for Business, Energy and Industrial Strategy and the Department for Education should work together on that to join up skills for the future.
As the Minister will know, we are now in phase two of the process, focusing on the individual projects that will realise the ambitions of both the Government and HyNet. In order for the ambitious targets to be met, careful consideration of the correct level of allocations is required.
Our net zero target and the private sector’s environmental commitment have led to significant demand from industry to invest in green transition. That is really good news, but the current caps on the support contracts under the industrial decarbonisation and hydrogen revenue support scheme fall substantially short of the level of demand from industry and below that required to achieve net zero. Without a significant increase in those caps, there is a danger that hydrogen deployment will not deliver the initial scale required to gain the momentum that this fledging sector needs, potentially losing the global lead we have already made in the UK in the hydrogen economy.
The current target of about 6 million tonnes per annum for industrial carbon capture by 2030 is part of the overall target of 20 million to 30 million tonnes per annum. However, it is narrowed down to about 3 million tonnes per annum for the initial allocation under the industrial decarbonisation scheme, and that is an inadequate target to kick-start a new industry. If we split that evenly between HyNet and the East Coast Cluster, it would potentially only allow for one or two of HyNet’s flagship projects to be delivered, resulting in organisations being unable to decarbonise their industrial processes. We need to go bigger.
If the Government are to achieve their stated target, they should be proceeding with about 6 million tonnes per annum in total industrial capture in the first clusters by 2027. That is the lowest cost approach to achieving the 20 million to 30 million tonnes per annum target by 2030. At the same time, the Government should be looking towards a road map for future allocations to give confidence to other projects to proceed into further development.
In addition, to get a functioning hydrogen market, with hydrogen producers connected to hydrogen users, we need business models that are consistent with hydrogen production targets. That means that 2025 will be too late for these business models to be put in place, resulting in the 10 GW target that the hon. Member for City of Chester mentioned being missed.
The message to the Government is really clear: the private sector that is investing in this area wants to proceed and is keen to expand the operation, but it would like Government support to do that. Will the Minister confirm that his Department has done a proper assessment of the impact that the current plans may have on companies reliant on HyNet hydrogen production and infrastructure to decarbonise? Does it leave them facing increased risks and uncertainty from the impact of carbon cost and market share?
I recognise the importance of moving towards decarbonisation and I know that the Government are committed to ensuring that we have the tools in place to achieve net zero by 2050, but it is ambitious projects such as HyNet, bringing together businesses, creating jobs and bringing investment, that pave the way for achieving our target. It is critical that we listen to the needs of those working in the sector to make sure we get this right. I urge the Minister to take heed of the challenges HyNet is currently facing and to seek to resolve them as soon as possible.
Thank you very much, Sir Edward. There has been a great deal of impassioned debate around the room, and lots of important points have been made about using hydrogen for heating, refuelling stations and buses.
Of course, people do not need to go to America to see or hear about hydrogen buses; they need only come to Aberdeen, where we have not just one but multiple hydrogen buses. And as well as hydrogen buses, we have hydrogen refuelling stations, road sweepers and bin lorries, and a hydrogen hub is about to be set up. SGN is looking at the potential for blending hydrogen into the grid directly from St Fergus into Aberdeen itself. A great deal of hydrogen activity is already going on in Aberdeen, the wonderful city that I represent, as well as across Scotland. Glasgow has the green hydrogen for Glasgow scheme, and Fife has the H100 scheme, which is looking at ensuring that homes are powered purely by hydrogen. A lot of important and powerful work is under way.
That all fits in with the Scottish Government’s target of 5 GW of hydrogen by 2030, and 25 GW by 2045. There is a great deal of potential in that technology, and that is important for someone like me. Scotland’s economy has for a long time been reliant on the oil and gas sector, which is still, and will continue to be, incredibly important. We need to consider what comes next, and hydrogen, of course, has a role to play.
A key question that has perhaps not been touched on in enough detail in the debate is that of blue or green hydrogen. The hon. Member for Birkenhead (Mick Whitley) made the excellent point about CCUS—or the lack of it—in the north-east of Scotland. He is absolutely right: the Government’s completely illogical decision not to progress with the Acorn project causes us a great deal of consternation, given the potential of CCUS. Key to the Acorn project is the production of blue hydrogen, but as we move forward, that discussion changes. Will it still be possible to have a blue hydrogen economy in the same way when the green hydrogen economy is building up at such a pace? In Scotland, the capacity for 25 GW of offshore wind is being built, so the potential for green hydrogen is enormous.
It is incredibly important that we have a clear picture of what we want to deliver and how we can deliver it. I have absolute confidence that my colleagues in the Scottish Government will be on top of that, and I have hopeful confidence that the Minister will be, too. Irrespective of our constitutional future, there will be integration between Scotland, England, Wales and Northern Ireland when it comes to hydrogen, because we will all ultimately rely heavily on the energy resource that comes from Scotland.
There are still many hydrogen sceptics. I have spoken with them—as, I am sure, have many hon. Members present—and they say, “Why do you not just use the electricity that produces green hydrogen its own natural form?” They are missing the point about heating made by the hon. Member for Redcar (Jacob Young), as well as the export potential for hydrogen compared with electricity. When we weigh up those two, it is clear for us all to see—in this room and among the public—that hydrogen, and certainly green hydrogen, is the route forward to a buoyant energy industry and, I hope, a buoyant Scottish economy.
I congratulate the hon. Member for Redcar (Jacob Young) on securing this important debate. We are at a juncture with regard to the future of hydrogen. We have pretty much got over the debate on whether hydrogen will play an important role in future low-carbon energy. We have had that debate in all sorts of ways over recent years, and I think that it has been resolved. Hydrogen will play a really important and central part in our low-carbon energy structures of the future. We are now charged with ensuring that we get it right as far as the distribution, development and production of hydrogen are concerned, and that it is used in the right places and for the right things. As the hon. Member for Aberdeen South (Stephen Flynn) intimated, this is a question of using hydrogen to get to the places where electricity cannot be used.
The hon. Member for Redcar mentioned trains and HGVs. It is improbable that HGVs on batteries will be ploughing up and down our roads for 300 or 400 miles with a little bit of freight on top. It will be hydrogen; it has to be hydrogen. We have to get the infrastructure in place to get that right, and we have to get the production of hydrogen right to fuel that new network of long-distance logistics.
The hon. Member mentioned heat, which I would put third in the hierarchy of uses for hydrogen. We certainly have an early win of putting hydrogen into the system up to 20%, but it is unlikely that we will run the whole of our heat on hydrogen, not least because if we put blue hydrogen in to replace the 80% of boilers that run on gas, we would increase our gas imports by about 10%. We would increase gas coming into the country rather than decrease it, which is what we want.
That brings me to the green-blue debate. It is not that we should have no blue and only green. As my hon. Friend the Member for City of Chester (Christian Matheson) said, in the industrial clusters there are some first-rate projects that integrate carbon capture and the use of hydrogen in the right place, which will, in the first instance, need blue hydrogen to get going. We must be clear that the longer-term future is green hydrogen and it should be in our planning from the start, not least because since the Government made their calculations about the relative cost of blue and green hydrogen in the hydrogen strategy, the cost of blue hydrogen has increased by 36%. It is now generally recognised that, by 2025, assuming that gas prices continue at their present level, if we look at future gas prices, as I am sure the Minister has, we will see that blue hydrogen will be something like £85 per MWh and green hydrogen £58 per MWh, and that is before the conclusion of the debates about the roll-out of green hydrogen.
It really has to be green, not because one is against blue but because of the way in which the gas debate is going and the fact that we need to get electrolysis in place to get green hydrogen in the volumes required for the future. That means, as the hon. Member for Redcar has said, that we will need a lot of storage. We know that SSE is already producing salt caverns for the East Coast Cluster. The Rough field will, we hope, come into commission for hydrogen in the future, but we are going to need a lot more storage than that and it will have to be strategically located around the country. We will also need the networks mentioned by the hon. Member to get hydrogen to where it is needed. There is a lot of work to be done to get hydrogen properly in the place where it is needed for the future low-carbon economy. There is a lot of thinking to be done about the relative priorities that we give to different uses of hydrogen in the economy, to ensure that it has the best effects.
If I can pay a slight compliment to the Government, they have begun to do a lot of thinking about the hydrogen strategy, but a lot more needs to be done to get us in the right place and, most importantly, to get the right instruments to encourage hydrogen development and to ensure that we get hydrogen production properly aligned with how we are going to use it. We do not want to look back in 10 years’ time and say, “If only we had done this, this and this, we could have got so much more going with our hydrogen.” That should be the Government’s priority and what they need to concentrate on over the next period, so that the hydrogen economy takes off.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Redcar (Jacob Young) on securing this important debate, on his incredible work and passionate advocacy for hydrogen ever since he arrived in the House, and on his chairing of the APPG on hydrogen.
This Government recognise that now, more than ever, we must focus on generating cheaper, cleaner power in Britain to support our long-term energy security and to achieve net zero by 2050. Hydrogen has the potential to help decarbonise vital UK industry sectors and to provide flexible energy across power, transport and, potentially, heat. Our drive for renewables makes hydrogen especially valuable. Excess renewable electricity can be used to produce hydrogen, which can be stored over time and used to generate electricity when there is less sun or wind to power the grid.
That is why in the British energy security strategy, published this April, we committed to doubling our ambition, as my hon. Friend the Member for Redcar and others have pointed out, to up to 10 GW of low-carbon hydrogen production capacity by 2030. As the hon. Member for Southampton, Test (Dr Whitehead) mentioned, at least half of that will come from green hydrogen, or electrolytic hydrogen, drawing on the scale of the UK’s offshore wind ambitions.
The energy security Bill announced in the Queen’s Speech will deliver on the commitment to build a sustainable homegrown energy system that is more secure, clean and affordable, and will include measures to facilitate the delivery of the hydrogen business model, driving investment across the UK.
The enormous potential of hydrogen for our economy is plain to see. In the UK alone, the sector could support 12,000 jobs by 2030 and unlock over £9 billion in private investment in the UK. By 2050—net zero date—the UK’s hydrogen economy could be worth up to £13 billion and support up to 100,000 jobs, many of which will be in our industrial heartlands.
I will address the specific points made by my hon. Friend the Member for Redcar, which were delivered with passionate advocacy in his excellent speech. On blending, we are on track to make a policy decision in 2023 and we are exploring whether to enable blending of up to 20% of hydrogen into GB gas networks.
We have invested £25 million in the BEIS Hy4Heat programme to develop hydrogen-ready boilers. We have to have certainty around the safety and efficiency of these systems, and assurances that consumers will not face a premium from the introduction of these boilers, but that remains an area of active work.
My hon. Friend the Member for Redcar passionately advocated for bringing the hydrogen village trial to Redcar. We expect the final location to be selected in 2023 and for it to become operational by 2025. We expect the trial to last a minimum of two years.
I heard directly from National Grid about Project Union a few weeks ago. It is a fascinating project that we will continue to study. My hon. Friend’s plea to extend the gas storage at Rough is a live conversation with Centrica, and it would not be appropriate for me to comment on that today.
This is a very friendly intervention. For the record, will the Minister state the importance of the role hydrogen will play in industrial decarbonisation, particularly in industries such as steel, ceramics and cement? I am sure he will want to put that into the mix, as it were, as far as the deployment of hydrogen is concerned.
The hon. Gentleman is absolutely right about the importance of industrial decarbonisation. That is one reason why we are following the cluster approach, to make sure that those hard to decarbonise industry sectors are close to those clusters.
I will group my response to the two contributions from the HyNet group—the hon. Member for City of Chester (Christian Matheson) and my hon. Friend the Member for Warrington South (Andy Carter)—if I may call them that. The hon. Member for City of Chester also mentioned powered aircraft and maritime, which are very much in the mix for using hydrogen for transport. I had an excellent visit to the constituency of my hon. Friend the Member for Warrington South towards the end of last year, when I saw the potential for the Novelis canning factory to use hydrogen and other means. I have just come from meeting my co-chair of the green jobs delivery group to make sure that the skills are there. On the caps and the impact on companies in the HyNet process, my Department is in regular contact with major cluster projects, including HyNet, about how the Government and the industry can work together to realise our 10 GW ambition as part of the CCUS cluster sequencing process. I am happy to write to my hon. Friend with further details about the companies in HyNet.
My hon. Friend the Member for Waveney (Peter Aldous), who is a passionate supporter of green energy right the way across the board, told us about the clean hydrogen cluster in East Anglia and the Lowestoft power plant project using hydrogen for municipal buses and the refuse fleet, which was also mentioned by the hon. Member for Aberdeen South (Stephen Flynn). On one of my many visits to Scotland, I was really excited to see the Whitelee wind farm just south of Glasgow, which is the second largest onshore wind farm anywhere in Europe. Last autumn, we launched a £9.4 million project with Scottish Power to take the excess onshore wind power generated at Whitelee and turn it into hydrogen for Glasgow’s buses and refuse carts—similar to the scheme mentioned by the hon. Member. By the way, I am looking forward to being in Aberdeen again this week for the fourth time in my nine months as Energy Minister.
The hon. Member for Birkenhead (Mick Whitley) made some good points about hydrogen. I think he also managed to squeeze in a quick swipe at the nuclear industry, so I urge him to think again. I am a bit surprised that he took a swipe at the nuclear industry, as I know that he is sponsored by Unite and other unions. The unions are among the biggest supporters of nuclear in this country, so I urge him to listen a bit more closely to his union sponsors’ support for the nuclear industry. I also note that he is on the Liverpool city region freeport management board, so he is clearly able to embrace new Government policies and take advantage of them bringing things to his district. I urge him to think again on nuclear.
My hon. Friend the Member for Broxtowe (Darren Henry), who is co-chair of the midlands engine APPG, is absolutely right to say that we need to lead on low-carbon hydrogen technology. The technology side of this issue is incredibly important.
As it happens, today I have talked about renewable and low-carbon energy with Gordon Lyons, the Northern Ireland Economy Minister and a party colleague of the hon. Member for Strangford (Jim Shannon), who is absolutely right to say that Northern Ireland will play a key role in the production and export of hydrogen.
In the brief time available, I will outline the next steps. We recently published a hydrogen investment package, which set out the key policy detail that industry has been waiting for, and paved the way for the launch of two significant funding mechanisms: the net zero hydrogen fund, and our hydrogen business model. The net zero hydrogen fund will be coming this summer, and we aim to run annual allocation rounds for electrolytic hydrogen as soon as legislation and market conditions allow, moving to price-competitive allocation by 2025. In July, we will announce the blue hydrogen projects that we will negotiate with the CCUS cluster sequencing process.
We have developed an investor road map to give more clarity on what we have done, what we are doing and what we are committed to doing in developing the UK hydrogen opportunity. We have already mentioned hydrogen transport storage infrastructure, and we have committed to design new business models for that by 2025. We have published a UK low-carbon hydrogen standard, because it is really important that we have a standard for what defines low-carbon hydrogen, and we have also published a hydrogen sector development action plan on supporting the UK supply chain for hydrogen.
I hope that my hon. Friend the Member for Redcar agrees that the Government have provided a clear long-term signal that we are committed to building a world-leading UK hydrogen economy. I thank him again for securing this timely and informative debate, and for allowing us to explore the role of hydrogen in our clean and affordable UK energy system.
My final point is that I was in Berlin in January and met my German opposite number, whose name is Stefan Kaufmann. I found out in advance that his expertise in hydrogen is so extensive that he is called Mr Hydrogen. I said to him, “Stefan, one day I want to be called Mr Hydrogen,” but then I thought that, actually, the person who really deserves the title of Mr Hydrogen in this country is my hon. Friend the Member for Redcar.
I have not found many points of disagreement during the course of the debate, so I am grateful to everyone who has contributed. I want to put a final challenge to the Minister. He touched on hydrogen boilers and whether we can promise that there will be no cost to the consumer. I say to him that there is no cost to the consumer, because we can make this decision and get ahead with the roll-out. As I said in my speech, it is a no-lose situation, because we do not have to go down the 100% hydrogen route in 2026.
Question put and agreed to.
That this House has considered future hydrogen economy.