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Commons Chamber

Volume 730: debated on Tuesday 21 March 2023

House of Commons

Tuesday 21 March 2023

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Treasury

The Chancellor of the Exchequer was asked—

Taxation

Like all Conservatives, I believe in reducing the burden of taxation wherever possible, while always demonstrating a responsible approach to public finances.

While I appreciate that this is largely as a result of the idiotic decision to lock down the country and the economy for the best part of two years, the Chancellor nevertheless finds himself presiding over a high-tax, high-spend, low-growth, quasi-socialist economy. When can those of us who remain Conservatives expect to see some tax cuts and a reduction in the burden of taxation?

I thank my hon. Friend for the inimitable way in which he asked his question. I hope that he was reassured to some extent by the £9 billion cut in the planned level of corporation tax in the Budget, and, if we make the arrangement for capital allowances permanent, as I should like to, that will give us the best investment incentives anywhere in the OECD.

May I be the first to defend the Chancellor, and indeed the shadow Chancellor, against any accusation of socialism?

Can the Chancellor explain why the Cameronbridge distillery in my constituency, which is a major employer in an area of high unemployment, faces an increase of about £350 million in its excise tax bill this year? That is more than the additional amount that the Chancellor claims to be giving to the whole of Scotland. Will he explain why my constituents, and the companies that employ my constituents, are having to contribute additional taxes to pay for his economic failure?

Let me gently say to the hon. Member that the freeze in alcohol duty which we introduced in the autumn of 2021, and which will continue until August this year, has constituted a £2.7 billion tax cut over four years. We do everything we can to help the vital Scottish whisky industry.

There was a significant tax cut in the Budget that has been greatly welcomed by drivers in my constituency and elsewhere, namely the extension of the 5p cut in fuel duty and the freezing of the escalator, but does the Chancellor accept that by postponing that decision until an election year—next year—he is simply continuing the fuel duty fiction that our Committee has highlighted?

I am delighted that my hon. Friend welcomed the freezing of fuel duty, which means that over the period for which it has been frozen, the average motorist will have saved £200. There is a specific reason why I wanted to continue to freeze it this year: combined with the extension of the energy price guarantee, it will reduce CPI inflation by 0.7% in a year in which headline inflation is still over 10%.

How is it fair that the Government are picking the pockets of working people through frozen income tax thresholds while at the same time allowing the super-rich non-doms to effectively opt out of paying tax in this country, which is costing us £3.2 billion this year?

Let me remind the hon. Gentleman what we have done for people on low incomes. Because of the increase in the income tax and national insurance thresholds which was completed last year, those on the average wage of £28,000 pay £1,000 less in tax and national insurance than they would have paid at 2010 levels—that is a tax cut that his party opposed at each and every stage.

Ultra Low Emission Zones

Responsibility for transport and air quality within Greater London is devolved to the Mayor of London and Transport for London via the Greater London Authority Act 1999. It is for the Mayor to assess the economic impact of the proposed expansion of the ULEZ, and to consult properly to ensure that it is not just a tax on the poorest motorists.

Small business owners and elderly and disabled residents affected by the ULEZ in my constituency are concerned about the fact that the Mayor’s process has not been as independent or robust as it should be. Will my right hon. Friend consider commissioning the Treasury’s own independent assessment of the impact of the ULEZ, so that my constituents and local business owners can really understand how it will affect them?

As the Prime Minister said just last week,

“the Mayor of London should listen to the voices of commuters, families”—

including many of my hon. Friend’s constituents—

“and small businesses as he inflicts his…tax on them.”—[Official Report, 15 March 2023; Vol. 729, c. 832.]

As the House has just heard, our Budget last week supported hard-pressed motorists by cancelling the planned increase of about 11p in fuel duty, saving drivers about £5 billion this year.

Cost of Energy

The Government have provided unprecedented support to help households and businesses with energy costs, totalling £94 billion for households and £8 billion for businesses. That is more than £100 billion over 2022 and 2023.

One of my local foundry businesses based in Keighley, Leach & Thompson, has kindly contacted me to say that British Gas wants to charge it £41.50 a day as a standing charge and that its unit rate has doubled. That is having a dramatic impact on the business. The Government have helped with the unit charge, but will the Chancellor outline what steps he is taking to help support small and medium-sized businesses with the extortionate standing charges being quoted by energy companies?

I thank my hon. Friend for raising this issue, which I know is shared by many Members across the House. That is why on 9 January I wrote to Ofgem asking it to update me on its investigation into the business market, which is not a regulated market like the consumer market. It has replied saying that it has concerns. It is concerned about significant changes in standing charges, about an increasing number of suppliers asking for security deposits and raising the cost of those deposits, and about potential breaches of the rules of the energy bill relief scheme. It will get back to me with its solutions as soon as possible.

When I was talking to businesses in York on Friday, they stressed to me that energy bills were still a major worry for many of them, especially in the hospitality sector, which is so important to our city. It is clear that the next six months will be critical for many of those businesses, so can the Chancellor provide any more targeted support, especially to the hospitality sector?

I ask my hon. Friend to keep me updated on what is happening with the hospitality sector in his constituency, but he will know that we have already introduced support for business rates, with a 75% reduction in business rates up to a cap of £110,000, and that the energy bills discount scheme is providing more than £8 billion of support over this year and last. We are doing everything we can.

Does my right hon. Friend agree that a long-term energy strategy is critical to helping people with the cost of living? Will he outline what steps the Government are taking to enable this through the funding of nuclear energy?

My hon. Friend is absolutely right to raise this issue, as is my hon. Friend the Member for Ynys Môn (Virginia Crosbie), who does so on every single occasion she can. Nuclear is important because there will be times when the weather does not generate the energy we need from renewable sources. That is why we announced in the Budget that we are going ahead with Great British Nuclear and with the competition for small modular reactors, provided that an investigation this year finds that that is viable, and we will class nuclear power as environmentally sustainable, subject to consultation.

A number of small businesses in my constituency are struggling with their energy costs, and two have recently gone to the wall, but major companies in the whisky sector are also struggling. The Chancellor says that the Government are doing what they can to support them, but does he appreciate that that is not how it feels in Scotland? This major industry, with its high-intensity use of energy in distilling, is facing a 10% increase, which will mean that something like 75% of the price of a bottle of whisky goes to the Exchequer. The industry does not feel like it is being helped. Does he appreciate that it feels like it is being kicked at a very difficult time?

I recognise the challenges that the distilling industry and many other industries are facing. That is why we are giving more than £100 billion of support to businesses and consumers, but I would say to the hon. Lady that Scotch whisky has received nine cuts or freezes in the last 10 Budgets, so we are doing everything we can.

It is all fine and well for the Chancellor to say that he is in correspondence with Ofgem, but the business energy sector remains unregulated and many businesses in my constituency are stuck on very high tariffs because of the increase in prices, which have now to some degree gone down. What will he do about those people who are marooned on higher tariffs? It is costing their businesses dearly and those businesses may not even survive.

That is exactly why I wrote to Ofgem. Wholesale gas prices are now lower than they were before the Ukraine invasion. The hon. Lady is right to say it is not a regulated market and I want to find out from Ofgem what it thinks should happen to avoid precisely the problem she talks about.

Many pubs and breweries are locked into energy bill contracts that are staggeringly high, and they are calling for an opportunity to renegotiate them. What further support will Ministers offer the sector with its energy bills, particularly recognising the financial impact that the increase in alcohol duty will have?

We are doing a great deal. As the hon. Lady will know, we set up a new scheme, the energy bills discount scheme, to help businesses in the coming year. As I mentioned to my hon. Friend the Member for York Outer (Julian Sturdy), we are also giving them 75% relief on their business rates. We will continue to do everything we can for this very important sector.

People on Lower Incomes

In addition to extending the energy price guarantee, and to help people further, cost of living payments for vulnerable households will kick in next year. We are also uprating benefits and increasing the national living wage to £10.42 an hour.

What assessment has my right hon. Friend made of the saving a typical family will achieve as a result of his fuel duty measures announced in last week’s Budget?

I thank my hon. Friend for saying that. We think the average driver has saved about £200 in total since the 5p cut was introduced, but we are also introducing draught relief for beer drinkers in pubs and 30 hours of free childcare for young parents who are struggling with childcare costs. There are a lot of cost of living measures in the Budget.

I thank the Chancellor for all he does, and for his hard work. It is more than just beer drinkers, of course. Carers who also work part time are precluded from receiving carer’s allowance if they earn just over the threshold. Will he consider uplifting the carer’s allowance earnings threshold in line with inflation?

I thank the hon. Gentleman for mentioning carers, who do an amazing job. It is fair to say that our NHS and care systems would fall over without the incredible job carers do. We will always keep under review what we can do to help these very important people.

Economic Outlook: Lincolnshire and Cleethorpes

5. What assessment he has made of the economic outlook for (a) Greater Lincolnshire and (b) Cleethorpes constituency. (904212)

The Government are committed to creating an environment in which economic growth benefits all. The latest data indicates that productivity in Greater Lincolnshire grew by 8.4% from 2010 to 2020, compared with UK productivity growth of 7.9% over the same period. Coastal communities such as Cleethorpes play a vital role in the economy. I am pleased that, following the announcements on the second levelling-up fund, more than £18 million has been granted for the Cleethorpes masterplan.

The county of Lincolnshire has great opportunities for economic development in both rural and urban areas. In particular, the Cleethorpes constituency is a major centre for the renewable energy sector and contains a major port at Immingham. Freeport status has been granted for the Humber freeport, but I understand that we are awaiting final Treasury sign-off. Can the Minister give us an indication of when that will happen?

I am pleased to confirm that the full business case for the Humber freeport has now been conditionally approved by the Treasury, with full approval subject to the customs site being designated and the freeport signing a memorandum of understanding with the Department for Levelling Up, Housing and Communities. The Humber freeport is already open for business, supporting the regeneration of the region by creating jobs and attracting new business investment. I am sorry that Treasury processes can sometimes appear tortuous.

Tax-free Childcare

7. If he will make an assessment with Cabinet colleagues of the potential impact of increasing the tax-free childcare allowance on the ability of parents to work. (904214)

Tax-free childcare provides financial support for working parents with their childcare costs. In addition to tax-free childcare, the Chancellor announced at the spring Budget that all eligible working parents in England will be able to access 30 hours of free childcare a week for 38 weeks of the year, from when their child is nine months old until they start school.

I thank the Minister for his response. When will the Government start to reward the working families of this United Kingdom? We have a Chancellor who is giving tax breaks to the wealthy to top up their pension pots, yet he cannot support working families by increasing the personal allowance or by offering tax-free childcare that supports all families with childcare needs, particularly families with older children. The high-income child benefit charge remains untouched, leaving households that earn much less than others unaffected. Can the Chancellor update us on his plans to reform this deeply unfair practice?

I do not accept the overall characterisation that the hon. Lady has given. Just in November last year, 428,000 families and 511,000 children benefited from tax-free childcare. The announcements last week will make a significant contribution, and of course that work will start immediately, with the Department for Education consultation. We have a commitment of £204 million for the coming financial year, and £288 million for the following year, to increase supply so that we can deliver this as quickly as possible.

I congratulate the Treasury team on the excellent new policy of providing much more childcare support to families. Will my right hon. Friend persuade the Chancellor to meet me and a small group of colleagues to talk about the policy in the round and about how we can give more support to all families, providing more flexibility where informal childcare is provided—for example, by grandparents—and ensuring that families who want to look after their children at home are not, in effect, left out and left in poverty as a result of the decisions they make for their family?

I thank my right hon. Friend for her question, and I welcomed the chance to discuss this matter at length with her recently. The Chancellor has indicated that he would be happy to meet her, and I would also be happy to meet her again.

Budget: Gender Equality

8. If he will make an assessment with Cabinet colleagues of the potential impact of the spring Budget on gender equality. (904215)

The Government remain committed to full genuine gender equality and to supporting women. In particular, we are supporting women into work through our new childcare package, which I just mentioned, allowing people to return to work sooner; encouraging business investment through schemes such as the community investment tax relief; and creating new job opportunities with our labour market package. In developing proposals for the spring Budget, the Treasury takes care to consider the equality impacts on those sharing protected characteristics, including gender, in line with our legal obligations and the Government’s strong commitment to promoting fairness.

I thank the Minister for his response. Let me help him out. If he had made an adequate assessment, he would have found that the spring Budget failed women. It failed young women, women in work and pensioners. Women are more likely to rely on and work in public services, and this Budget made their lives worse, not better. Most of the UK’s poorest pensioners are single women, and the gender pensions gap needs to be addressed. Will he agree to urgently put forward a compensation package to deal with the injustice faced by 1950s women—the WASPI women?

I do not accept that. I think the WASPI issue has been covered many times, by Ministers from the Department for Work and Pensions and elsewhere. We are putting in £4.1 billion by 2027-28 to expand free childcare. This Government have a record to be proud of: we have increased the number of women in full-time work; we introduced shared parental leave; we introduced the Domestic Abuse Act 2021; and we made a range of interventions last week that many women up and down the country will be very pleased with.

Mortgage Rates

10. Whether he is taking steps with Cabinet colleagues to support homeowners with increases in mortgage rates. (904217)

16. Whether he is taking steps with Cabinet colleagues to support homeowners with increases in mortgage rates. (904223)

Mortgage lenders are required to offer a range of tailored support to borrowers in financial difficulty. The Chancellor and I have made clear our expectation that they live up to those responsibilities.

A typical family are now paying up to £2,000 more for their mortgage, partially as a result of the former Prime Minister. First, will the Chancellor apologise to those people, who number about 20,000 in my constituency? Secondly, will he seriously do something about it?

The Government are supporting households with a £94 billion package of support. We have kept the energy price guarantee for an additional three months and we are bearing down—I hope the hon. Gentleman joins us in doing this—on the biggest cost of living challenge faced by families, which is inflation.

Thirteen years of failed Tory economic policies, alongside last year’s disastrous mini-Budget, have, as my hon. Friend the Member for Weaver Vale (Mike Amesbury) says, left thousands and thousands of mortgage holders subject to high interest rates and sky-high inflation. So I repeat his call: will any member of the Treasury team have the decency to apologise to the very many hard-pressed families who are currently subject to the Tory mortgage penalty?

Interest rates are not only falling but are still below the level at which they peaked under the last Labour Government, despite the fact that we have had a covid pandemic and war in Ukraine. I welcome the news last week from the Office for Budget Responsibility that the country is on track to avoid a recession, and we must never forget the words of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne): there is no money left.

A competitive and viable banking sector is essential to offer competitive mortgages to constituents right across the country. What assessment has my hon. Friend made of the treatment of additional tier 1 bonds in relation to the Credit Suisse takeover, which could well undermine the sector elsewhere, and what assessment has he made of the value of those bonds here in the UK?

I thank my right hon. Friend for his comments. The Government join the Bank of England in welcoming the comprehensive set of actions taken yesterday by the Swiss authorities to ensure financial stability. It would not be for me to talk from the Dispatch Box about the treatment of creditors, but the UK’s bank resolution framework has a clear statutory order in which shareholders and creditors would bear losses in a resolution or insolvency scenario.

The Conservative party wants to pretend that last September’s mini-Budget and its impact on mortgages was all a bad dream, but it is more than a bad dream for the 4 million households who will face a mortgage rise this year on either fixed or variable rates. The average two-year fixed rate deal is now around £2,000 a year more than it cost in August last year. That is real money and real costs. What is the Government’s estimate of the total cost of September’s mini-Budget to UK homeowners?

The hon. Member—[Interruption.] Forgive me, the right hon. Member will be aware that interest rates have been increasing globally. Interest rates in the UK are now lower than the equivalent in the US and are lower than they were last autumn. The Government have a range of measures to help hard-pressed mortgage payers, but above all else, our strong stewardship of the economy is bringing down interest rates and means that we are on track to halve inflation this year.

The OBR has confirmed that the UK economy will avoid a technical recession and was the fastest growing economy in the G7 for the past two years.

The Minister either does not know or will not say what the total cost was. Is it not interesting that it is always someone else’s fault? One of the first things that the Prime Minister did when he took office was to give in to his Back Benchers on house building targets. The Home Builders Federation now says that the supply of new housing is likely to fall to its lowest level since the second world war—less than half the Government’s target. How will building fewer homes as a result of a back-stairs deal inside the Conservative party help young people in our constituencies who dream of owning their own home and getting on the property ladder?

We share the aspiration of young people to own their own home, but the best way to help them do that is to have a vibrant, growing economy. We are on the side of doing that. We are taking actions that will restore the economy to growth. Every Labour Government who have ever taken office have left unemployment at a higher rate than when they came in.

Last August, there were 75,000 mortgage approvals. That number halved by December. We are all aware of the reports from late last year of the number of mortgage products that were removed and the troubling reports of mortgage offers being withdrawn. Before we even get to the issue of support for mortgage holders, what is the Treasury doing to ensure the availability of mortgages, a good range of mortgage products and an end to offers being withdrawn unless there is a very, very good reason to do so?

We have recently renewed the mortgage guarantee scheme, which helps the availability of high loan to value ratio mortgages. We are looking very clearly at the mortgage market and at things that we can do to help first-time buyers. The right hon. Member should also know that mortgage arrears, which we monitor very closely, remain low. In fact, they are lower now than they were prior to the pandemic.

Of course, 18 months ago a two-year fixed-rate mortgage with a 5% deposit was under 3%. It is now north of 6%. A two-year fixed-interest mortgage with a 25% deposit, which was 1.25%, is now also north of 6%. How can it possibly be fair that somebody buying an average-priced house in Scotland worth around £190,000, putting down a £50,000 deposit, could face an interest rate that has gone up by 500% in that time?

Interest rates are now falling, something the right hon. Gentleman declined to mention. The best thing we can do to help with those interest rates is to deliver on the Prime Minister’s objective of halving inflation, and I am encouraged that we are on track to do so.

Net Zero

11. What fiscal steps he is taking with Cabinet colleagues to support the economy in reaching net-zero carbon emissions. (904218)

17. What fiscal steps he is taking with Cabinet colleagues to support the economy in reaching net-zero carbon emissions. (904224)

20. What fiscal steps he is taking with Cabinet colleagues to support the economy in reaching net-zero carbon emissions. (904227)

22. What fiscal steps he is taking with Cabinet colleagues to support the economy in reaching net-zero carbon emissions. (904229)

At the spending review 2021, we confirmed that since March 2021 the Government will have committed a total £30 billion of public investment for the green industrial revolution. Since then, the Government have made new announcements to provide long-term certainty on our investment plans, including £6 billion for energy efficiency from 2025 and up to £20 billion for carbon capture, usage and storage. The Government will set out further action shortly to support green industries in the UK and meet our net zero 2050 commitment.

Yesterday, the Intergovernmental Panel on Climate Change published its report on the latest data, warning that the world is fast approaching irreversible levels of global heating. Why is the Treasury still giving energy companies an easy ride through lucrative loopholes in the energy windfall tax? The Treasury should be prioritising investments in renewables so that over time, our bills can come down.

This country should be proud of our record, which has seen emissions fall faster in this country than in any country in the G7—down 44% since 1990—but we have to balance that against energy security. Surely, if there is one thing we have learned from what has happened with Ukraine’s invasion by Russia, it is that we need to maximise domestic energy production. The investment allowance in our windfall tax is not a loophole; it is there precisely to incentivise investment so that we maximise domestic energy production.

While the sector would have liked more, I welcome the £20 billion over 20 years for carbon capture, use and storage in the Budget. Will the Minister now confirm that the Teesside-Humber project will go ahead and how additional clusters will be selected through the track-2 process?

I pay tribute to the hon. Gentleman for his consistency—he raised this with me on Thursday in my winding-up speech on the Budget debate. As I said then, we will announce further details soon, but I can confirm that I will be meeting the Carbon Capture and Storage Association tomorrow. I look forward to the meeting. This is an incredibly important step forward, because we must remember that carbon capture does not just give us clean energy, but enables heavy industry to decarbonise.

Why does the Chancellor not rewire local economies by taking inspiration from President Biden and backing Labour’s policy for a national wealth fund to support half a million new jobs this decade?

I am grateful to the hon. Gentleman for raising the Inflation Reduction Act; I hope we all welcome what the United States is doing, because the climate is a global phenomenon and, if we are to make progress, we need the United States and other countries to do their bit. Let me be clear: we should be proud of our record to date and confident in our future, because we have huge competitive advantages on green industry. We have a brilliant record to date, we have the shallow North sea, where we have developed the biggest coastal array of offshore wind in the whole of Europe, we have a brilliant scientific base and, with the City of London and our financial institutions, we should be confident about our green future.

The Institute of Directors has warned that

“the UK will find itself left behind in the accelerating race to lead the green economy.”

After a lacklustre Budget, does the Minister agree?

To give just one example of why we should be confident, last year 40% of our electricity came from renewables. The figure in the United States was 20%. We have a very strong record, but we are going to keep building on it. That is why we announced the £20 billion for carbon capture and storage and why we announced Great British Nuclear, because we need that baseload power to go alongside renewables and give us energy security.

The truth is that it is under this Conservative Government that the greatest strides have been accomplished in harnessing the British economy to achieve net zero, with the leadership of COP26, the establishment of the Glasgow Financial Alliance for Net Zero, and the introduction of corporate reporting on carbon emissions for our major corporations. Will my hon. Friend work with British business to continue that progress and ensure that we can all move forward successfully to achieve net zero?

My hon. Friend speaks with passion, experience and expertise, and he is absolutely right. Of course we work closely with investors and business—one key example is the contracts for difference regime. Last July, we had the largest ever allocation of contracts through the contracts for difference process, contracting about 11 GW of clean power, which is enough clean energy for 12 million homes. That is a huge step forward, and it shows that we are delivering on net zero. As a party, we will balance that with energy security so that we learn the lessons of the last 12 months.

Ynys Môn is known as energy island. It has wind, wave, tidal and solar, and will have, I hope, new nuclear at Wylfa. For more than three years, I have campaigned for Anglesey to be a freeport, which would turbocharge the island’s economy and help the Government to deliver net zero. We are due to hear from the Welsh Government and the UK Government by early spring on whether our island’s bid has been successful. It feels like early spring in my Holyhead garden. Does it feel like early spring in the Chancellor’s garden?

My hon. Friend’s constituency is an island, and she is its rock—there is no doubt about that; she champions these issues consistently. I am assured that the Chief Secretary to the Treasury is giving careful consideration to her proposition, and that just underlines that she has been a champion for her constituency. By delivering on our green plans, we can generate green jobs and green investment in every part of the United Kingdom, including Wales.

As my hon. Friend the Member for Portsmouth South (Stephen Morgan) just said, the Institute of Directors has warned that

“the UK will find itself left behind in the accelerating race to lead the green economy.”

The Confederation of British Industry says that we are investing five times less in green industries than Germany—five times less. Meanwhile, the United Nations issues warnings of a climate disaster. Where is the urgency and action from the Conservatives to decarbonise our economy and win the global race for green jobs?

What the IOD actually said about the Budget was that it was “hugely encouraging”, and I strongly agree. We have an extraordinary track record—the fastest-falling emissions in the whole of the G7 and extraordinary success in offshore wind—but we want to go further. That is why we have announced £20 billion for carbon capture and storage, and we will soon announce many more positive measures.

Regeneration of Brownfield Sites

12. If he will make an assessment with Cabinet colleagues of the potential economic impact of creating a regeneration fund to support the conversion of brownfield former industrial sites into mixed-use properties. (904219)

The Government strongly encourage the effective utilisation of brownfield land, whether it was industrial, commercial or residential in its former use. We invest heavily in brownfield remediation programmes, including £1.8 billion at spending review 2021, as well as the levelling-up fund. National planning policy also sets out what planning policies and decisions should give substantial weight to the value of using suitable brownfield land.

Bolton town centre is in a parlous state. We lost out in the latest round of levelling-up funding, and the Tory council failed even to send the earlier application for funding. As an ex-industrial town, we have large brownfield mill sites standing derelict and unused, and they are eyesores. We could retrofit them to create affordable social housing to alleviate our housing crisis, develop retail units for new businesses, and support local charities and community groups with such units. With that in mind, what discussion has the Treasury had with Bolton Council and the Department for Levelling Up, Housing and Communities about the merits of such a scheme for the borough?

I agree with the hon. Lady that Bolton has great opportunities. Its brownfield register shows that it has more than 100 brownfield sites. Of course, the Government have given the Greater Manchester Combined Authority £150 million—£27 million just last year—to deliver local brownfield remediation. The breadth of the existing funds means that specific land remediation funding is not required, but there is provision in the Greater Manchester area, and I think that she should speak to the metro Mayor about it.

The west midlands trailblazer devolution deal, launched yesterday, brings further support for regeneration and infrastructure along with £100 million of brownfield funding, which is good news for areas such as mine. Does my right hon. Friend agree that this issue is key to delivering homes and jobs while protecting our precious greenbelt and will he consider that in any impact assessment study that he undertakes?

My right hon. Friend makes a very sensible point. This is about finding appropriate development in different communities, and a range of factors will obviously be involved. We have worked closely with local authorities to ensure that we get the right package of measures and legislative changes to enable the development she and her constituents aspire to.

Withdrawal from the EU: Economic Impact

13. What recent assessment his Department has made of the impact of withdrawal from the EU on the economy. (904220)

It remains challenging to separate the effects on the UK economy of Brexit and of wider global trends, such as the invasion of Ukraine by Russia, that add pressures on trade, prices and the wider economy. The Government have been working to take advantage of leaving the EU, including through the Edinburgh reforms, new freeports and the opportunity to shape new trading relationships with the rest of the world.

It is not that difficult, is it? Last week, the Office for Budget Responsibility published its report and, at the bottom of page 46, it says quite clearly that the OBR predicts that Brexit means that the UK economy will shrink by 4% and trade will go down by 15%. Is it not time to get over this denial phase and actually admit that Brexit has caused irreparable harm to the UK economy? Or is the OBR wrong?

If I may, I will gently point out to the hon. Gentleman that the OBR has previously stated that it is too early to reach definitive conclusions. The Government are focused on seizing the opportunities provided by Brexit, including the world’s biggest zero-tariff, zero-quota trade deal. Indeed, Scotland itself will benefit from 71 new trade deals secured with non-EU countries and control of our fishing waters. I hope that the hon. Gentleman also welcomes the £8.6 million invested in Scotland’s festival economy at the Budget last week.

Now that the Windsor agreement has been reached, I am sure that the Minister will agree that there is ample opportunity to have a constructive working relationship with the European Union. In light of that, and for the sake of struggling British businesses, may I ask the Minister whether she will finally get behind Labour’s proposals for a bespoke veterinary agreement on the mutual recognition of professional qualifications and for a memorandum of understanding on regulatory co-operation for our financial services?

I am very grateful to the hon. Lady for her question and I urge her to get behind our trade and co-operation agreement. As I say, it is the world’s largest zero-tariff, zero-quota deal. I am delighted to say that the Chief Secretary has just confirmed that we have signed the memorandum.

Social and Affordable Housing

The Government are committed to delivering social and affordable housing and are investing £115 billion in the affordable homes programme from 2021 to 2026. That is the largest investment in affordable housing in a decade and includes investment in supported housing, social and affordable rent and shared ownership.

The affordable homes programme will deliver just 32,000 homes over five years while 1.2 million households are waiting for social houses, yet there was no mention of new money in the Budget last week, which was a massive disappointment in the light of the scale of the housing crisis. In York, we are seeing a net loss of social housing. Will the Chief Secretary ensure that social housing is prioritised, that money comes forward and that we see a real boost to the affordable homes programme so that York, and places like it, can have the housing they need?

That is a top priority of this Government and I continue to work with colleagues across the Department for Levelling Up, Housing and Communities and other Departments to deliver it.

Economic Inactivity

If we had the same economic inactivity rate as Holland, there would be 2.7 million more people in work, filling every vacancy in the economy nearly three times over. That is why we focused on the issue in the Budget.

I thank my right hon. Friend for that answer, and for the measures he set out in the Budget. I support the fiscal measures he has taken regarding the pensions lifetime allowance, which doctors in Norwich tell me will enable them to deliver more appointments and more operations. Can I go on to ask him, though, what he expects to see in the forthcoming state pension age review?

I thank my right hon. Friend for asking that question, and for all the work she has done in the Department for Work and Pensions on economic inactivity. As she knows, there is an ongoing statutory Government review of the state pension age, and that review will need to carefully balance important factors, including fiscal sustainability, the economic context, the latest life expectancy data, and fairness to both pensioners and taxpayers.

One of the key ways to promote economic activity is to make sure that people have a stable, affordable roof over their head. Only last week a constituent visited me who cannot earn enough to be able to afford to rent privately in London, so he is restricted in how much he can work. Surely, if the Chancellor believes in growth, he must see the common sense in investing in social housing?

I do, but I also point out to the hon. Lady that we took a range of other measures in the Budget that will help such people, including increasing the help that we give them to find appropriate work, and helping those who have a long-term sickness or disability to get the support they need to get back into work. Doing all those things will make a big difference.

Topical Questions

This Conservative Government believe in the virtue of work, and that is why last week’s Budget set out to remove barriers for long-term sick and disabled, for jobseekers, for older people with our pension tax reforms, and for parents with the biggest expansion of childcare in memory.

With Orbital O2 in Orkney and MeyGen—the largest tidal stream site in the world—Scotland leads the way in tidal stream generation. That industry is at a stage where it needs to expand and scale up, but to do so, it needs a bigger ringfenced budget. In the renewables auction announced last week, the Government propose to halve the budget for tidal stream instead of increasing it. Will the Chancellor meet me to discuss the impact and the opportunities for business?

We are interested in giving support to all forms of renewable energy, and the Exchequer Secretary to the Treasury is very happy to meet the hon. Gentleman to discuss those issues further.

T5. Delaying the lower Thames crossing will have a detrimental impact on Dartford’s economy and on its traffic problems, so does the Chancellor of the Exchequer agree that the completion of the lower Thames crossing is vital if we are to promote economic growth, not just in Dartford but throughout the south-east of the country? (904236)

I am grateful to my hon. Friend, who has met me on a number of occasions to make the case for the Dartford crossing. Obviously, in the current difficult circumstances with inflationary pressures, we have had to make some tough choices, but I want to be very clear with my hon. Friend: we remain committed to delivering it. This is a two-year delay on construction, not a cancellation, and I will continue to update him in due course.

Confidence has been shaken by the recent bank failures and stock market falls across the world. Is the Chancellor confident that our ringfencing regime is adequate to protect taxpayers and depositors, when we have seen how fast these problems can spread? Can the Chancellor reassure the House that there are no other UK banks or subsidiaries that are vulnerable, and in light of recent developments, is he confident about the Financial Stability Board, or does it need to widen the number of banks regarded as systemically important?

I thank the shadow Chancellor for her question. The Government recognise that there is some volatility in the market, but we believe the UK financial system is fundamentally strong and UK banks are well capitalised. They now have core capital ratios that are three times higher than before the 2008 global financial crisis, but we continue to monitor the situation carefully.

I thank the Chancellor for that response, and am pleased that he continues to monitor the situation carefully, but the collapse of Silicon Valley Bank UK shows how our vibrant start-up sector—particularly in life sciences and tech—had become reliant on a single financial institution. The impact of these bank failures may be that other banks become more risk averse, restricting lending and raising interest rates, resulting in a credit squeeze, possibly even beyond the start-up sector. That would damage an already weak economy, so how will the Chancellor monitor the situation there and ensure that businesses have access to the long-term capital that they need to grow and to thrive?

The right hon. Lady is absolutely right to raise that issue. I said in the Budget that I would return with a full solution to those issues in the autumn statement, but ahead of that we will be making announcements on: pension industry reform, because we want to unlock the £5 trillion of assets in the pension industry; reforms to help companies scale up, so that they do not feel they have to move to other countries when they want to list; and, reforms to green finance so that people can access the capital they need. All those things will be a part of a comprehensive solution that we will be announcing shortly.

T7. For quite some time, GPs and consultants in Birmingham tab="yes" have expressed their frustration and concern with the pension lifetime allowance cap. I welcome the measures in the Budget last week to abolish it altogether, which will mean that we will see more GPs and consultants practising. Does my hon. Friend agree that it will also mean we will see more teachers and headteachers in the classroom and more police officers on the beat? (904238)

My hon. Friend is absolutely right. The measure will help public servants, hospital consultants, prison governors, headteachers and senior police leaders, which is why I agree with the hon. Member for Ilford North (Wes Streeting) when he said that removing the cap would save lives and that he himself would scrap the “crazy” cap.

T2. The Resolution Foundation recently found that if wage growth had continued on the same trajectory as pre-2008, the average UK worker would be £11,000 a year better off. Does the Minister accept that hard-working households can no longer afford to lose £11,000 a year as a result of this Government’s perpetual mismanagement of the economy? (904233)

I welcome the universal credit reforms we have made, and also the fact that under this Government, by raising the basic income tax threshold, we have taken up to 3 million workers out of income tax altogether.

T8.   I warmly welcome the Chancellor’s big decision to invest in childcare and the early years in this Budget. One witness to the Education Committee—a long-standing campaigner on these issues—said they were elated to see the commitment the Chancellor made. Going forward, may I encourage him to continue to listen to the concerns of the independent and voluntary sector, which is crucial to the success of reforms in this space? I know he is a fan of workforce plans, so may I encourage him to consider the case for an early years workforce plan? (904239)

I thank my hon. Friend for his campaigning on this issue. He has long been a voice for reforms to childcare. He is absolutely right that this is one of the biggest sets of childcare reforms we have ever seen. That is why we are taking two and a half years to scale it up. We want to make sure that parents who want to take advantage of the new free hours offer can get the supply of childcare they need, and we will listen very carefully to what the Select Committee says.

T3.   When the Chancellor chaired the Health and Social Care Committee, the British Medical Association told him that pension reforms just for doctors would be a fraction of the cost of what he announced in the Budget. Can he tell us precisely how many doctors the Treasury estimates will stay in work due to this untargeted tax giveaway for the top 1%? (904234)

It is not just about doctors leaving the profession, but doctors reducing their hours. The Royal College of Surgeons says that 69% of its members have reduced their hours as a result of the way that pension taxes used to work. Doctors themselves have welcomed the Budget warmly and as potentially transformative for the NHS.

T10. On behalf of all the residents of Rother Valley and especially Dinnington, I thank the Chancellor for the £12 million that we got in the Budget out of the new fund for capital regeneration projects to revitalise our high street, taking out the burnt-out building and rejuvenating the whole high street. Of course, there are other high streets across Rother Valley, such as in Maltby, Thurcroft and Swallownest, that also need help. Can the Chancellor therefore look favourably on future applications for those high streets so that they, too, can get the money that Dinnington has so necessarily got? (904241)

I hesitate, because my hon. Friend is so effective in campaigning for his constituency. I am glad that we were able to confirm that extra £20 million in the Budget. We will continue to look with a constructive mindset at all the many bids that he brings forward to the Treasury.

T4.   At the same time as the Chancellor has been dishing out tax cuts for the pensions of the richest earners, the Tories are considering making millions of people work even longer than they had planned before they can get their state pension. Will the Chancellor today rule out changing the state pension timetable? (904235)

What the hon. Member forgets is that it is not just doctors or, indeed, millionaires who want to save for a decent pension pot; it is ordinary people, and that is who we are on the side of in this Government. When it comes to reforms to the state pension age, we follow a process that balances the interests of taxpayers and the interests of pensioners, and also looks at life expectancy.

Given that the Chancellor has protected the new hospitals budget, may I express the huge frustration of my constituents at delays in the announcement that the RAAC-ravaged—reinforced autoclaved aerated concrete-ravaged—Queen Elizabeth Hospital in King’s Lynn will be part of the programme and urge that decisions are announced as soon as possible?

Given that I answered this question five weeks ago, I admire my hon. Friend’s consistency. I very much regret that we have not been able to make that decision yet. As I think I said last time, it is a matter for the Secretary of State for Health and Social Care, and conversations have developed. We have made a commitment on the quantum of money, and I will leave it for my colleague to make that announcement imminently.

T6. The head of the Institute for Fiscal Studies has said of the Chancellor:“Continuing to muddle through, massage the figures, and implement poorly designed policies will only make the problems worse.”That is a pretty damning verdict on his Budget, is it not? (904237)

It would be if his comment had not been quoted out of context, as the hon. Gentleman just did, because he also said that he could see in the Budget a growth plan and he strongly welcomed measures such as the childcare reform.

In the light of the current pressures on the international banking system, can the Chancellor give an assurance about and an update on the actions he will be taking to ensure that credit flows to small and medium-sized enterprises, our rural businesses and, indeed, start-ups, because at the end of the day they should never be penalised for the misdemeanours of large banks?

Yes, I can give my right hon. Friend that assurance. This Government are very keen to make sure that there is a strong flow of credit to the very smallest businesses in society.

T9.   OBR analysis of last week’s Budget has shown that there will be no real-terms growth in public services in 2023-24 and just 1% in 2024-25. Given the recent Patriotic Millionaires UK survey showing that more than seven in 10 millionaires want to have a fair tax on their wealth—by wealth, we are talking about £10 million of investable assets—will the Chancellor look at this? (904240)

What I say to the hon. Lady, whom I greatly respect, is that we did a lot for public services in the autumn statement, including a £3 billion increase in the annual schools budget and an £8 billion increase in the annual health and care budget. We are always focusing on public services, and we do support a progressive tax system.[Official Report, 22 March 2023, Vol. 730, c. 4MC.]

Will the Chancellor tweak the childcare initiative to enable families in which one parent wants to care for children full-time to have a realistic prospect of being able to afford to do so?

We think these reforms will make a big difference to all parents. Our priority is parents who want to work and who are prevented from working by the expense of the current system. I would remind my right hon. Friend that we still have a 15-hour free childcare offer for all parents, irrespective of whether they work, for three and four-year-olds.

Researchers at Warwick University and the London School of Economics estimate that the non-dom regime denies the Exchequer about £3.2 billion per year. Why did the Chancellor not take steps to abolish that in last week’s Budget, instead of creating more hoops for universal credit claimants to jump through?

We have looked very carefully at this, because we know that many in the House have been citing this figure. What concerns us about that analysis is that the study does not appear to take into account the behavioural ramifications of changing the current regime or of making it less competitive than that of our international partners. We do have to remind ourselves that non-domiciled taxpayers pay UK tax on their UK earnings to the tune of £7.9 billion.

The Leader of the Opposition led his charge against the Budget by saying that the UK was the sick man of Europe, yet the IMF shows that the UK had the fastest-growing economy in the G7 not just last year but the year before, and that since the Conservatives came to power in 2010 the UK has had the fastest-growing economy of the major economies in Europe. Does my right hon. Friend the Chancellor agree that, although there are clearly major economic challenges, there are many reasons—not least the tech sector in South Cambridgeshire—to be confident about the future of the UK economy?

I completely agree and, thanks to the brilliant efforts of the tech sector in South Cambridgeshire, we have now become the third largest tech sector in the world, after the United States and China, thanks to the Conservative Government.

My constituent Fiona Cooper was seeking to close the national insurance contribution gaps in her pension just before retirement and was frustrated that the advice she got about her missing years from HMRC needed validating by the Department for Work and Pensions. Does the Chancellor agree that one set of numbers is the cornerstone of any enterprise, and is he also frustrated that she has been advised that she will need to close full years before she can close part years?

If the hon. Gentleman would like to write to me about this, I will look into it, but I remind him that I issued a written ministerial statement recently, extending the deadlines precisely to help women in the situation he describes.

The Chancellor and I sat for three years on the Health Committee hearing evidence of just how restrictive the pension rules were for the likes of doctors. The fact that he has now been able to make that change is fantastic. Will he take that approach to dealing with some of the other red tape around retention and recruitment for other professions in the health service because, as the British Medical Association said, it is making a real difference?

Few people know as much about this issue as my hon. Friend, given his background in the NHS. He is right, and I know that my right hon. Friend the Secretary of State for Health and Social Care is looking closely at the issue of retention, which has an equally important role to play.

Industry stakeholders have been clear that Ministers must now focus on long-term solutions to support people with ongoing high energy prices through improved home energy efficiency. What steps will Ministers take to support households with the rising costs of energy in the long term?

The hon. Lady makes an excellent point. We have put in place a huge amount of support to help people through this immediate challenge with their energy bills, but we do need to think long term. That is why the Chancellor has put in place the 15% target to reduce energy consumption in both domestic and non-domestic buildings, but alongside that, and crucially, we have to increase the supply of UK energy, both renewables and in the North sea.

Thanks to the quick thinking and quick moves by the Chancellor, the Prime Minister and the Treasury, the tech sector was saved from almost certain oblivion, and at no cost to the taxpayer. Can my right hon. Friend confirm that he is still ambitious for the tech sector, and can he confirm that the merger with HSBC will ensure that our fantastic tech sector, especially our start-ups, will have access to the funding they need?

My hon. Friend is right. We have a very good solution to the Silicon Valley bank issue with the HSBC takeover. In the long run, we would like our brilliant tech superstar companies to have more choice about how they finance their expansion, and we will bring forward plans to make sure that happens.

On a point of order, Mr Speaker. The Minister said to me in her response that the Chief Secretary had just confirmed with her that we had signed the memorandum of understanding on regulatory co-operation with the EU. Could you please advise me whether she meant that both sides had signed and the agreement has been secured with the EU? I cannot find the details anywhere. Can you advise me where MPs are able to see the agreement?

Further to that point of order, Mr Speaker. I can confirm that we have always been ready to sign the MOU, from two years ago—[Interruption.] Well, we have made it very clear to the EU that we are ready to sign. It is a matter for it to come to the table, and we very much hope it will be able to do that. What happened was that as the Financial Secretary came to the Dispatch Box she did not quite hear exactly what I said, and for that I apologise on behalf of the Government. It was my fault.

Metropolitan Police: Casey Review

Given the importance of the issues raised by the statement we are about to hear, I am waiving the House’s sub judice resolution. However, I would ask Members to exercise caution and avoid referring to the detail of any cases that are currently or soon to be before the courts, to avoid any risk of prejudicing proceedings, particularly criminal ones. I call the Home Secretary.

With permission, Mr Speaker, I would like to make a statement on Baroness Casey’s review of the Metropolitan police. I wish to put on record my thanks to Baroness Casey for undertaking the review on such a difficult and sensitive topic with the utmost professionalism.

The Metropolitan Police Service plays a big role in our country: tackling crime throughout the capital and keeping 9 million Londoners safe; preventing terrorism nationally; and managing significant threats to our capital and country. I back the police. I trust them to put their safety before ours, to step into danger to protect the most vulnerable, and to support all of us at our most fearful, painful and tragic moments. Many of us can never imagine the challenges that regular police officers face every day. That is particularly poignant as tomorrow marks the sixth anniversary of the murder of PC Keith Palmer in the line of duty while he was protecting all of us in this place. For their contribution, I am sure all Members will join me in thanking the police for their work.

But there have been growing concerns around the performance of the Metropolitan police and its ability to command the confidence and trust of Londoners. That follows a series of abhorrent cases of officers who betrayed the public’s trust and hideously abused their powers. In June last year, His Majesty’s inspectorate of constabulary and fire and rescue services announced that the force would be put into an Engage phase. In July, the Government appointed Sir Mark Rowley to the post of Metropolitan Police Commissioner, with the express purpose of turning the organisation around.

Today’s report, commissioned by Sir Mark’s predecessor, makes for very concerning reading. It is clear that there have been serious failures of culture, leadership and standards in the Metropolitan police. That is why Sir Mark Rowley’s top priority since becoming commissioner has been to deliver a plan to turn around the Met and restore confidence in policing in London. Baroness Casey’s report finds: deep-seated cultural issues in the force; persistent poor planning and short-termism; a failure of local accountability; insularity and defensiveness; and a lack of focus on core areas of policing, including public protection. She also highlights the recent decline in trust and confidence in the Met among London’s diverse communities.

The report underlines the fact that the Met faces a long road to recovery. Improvements must be made as swiftly as possible, but some of the huge challenges for the organisation may take years to fully address. Baroness Casey is clear that Sir Mark and deputy commissioner Lynne Owens accept the scale of those challenges. I know that to be true from my own work with them. I will ensure that the Metropolitan police has all the support it needs from central Government to deliver on Sir Mark’s pledge of more trust, less crime and high standards. Every officer in the force needs to be part of making those changes happen.

As I said as soon as I became Home Secretary, I want all forces to focus relentlessly on common sense policing that stops crime and keeps the public safe. The Government are already providing the Metropolitan police with support to do just that. Funding for the force will be up to £3.3 billion in 2023, a cash increase of £178 million compared with 2010, and the force has by far the highest funding per capita in England and Wales. As a result of the Government’s police uplift programme, the Metropolitan police has more officers than ever before—over 35,000 as of December. The Home Office is providing funding to the force to deliver innovative projects to tackle drug misuse and county lines. We are working with police and health partners to roll out a national “right care, right person” model, to free up frontline officers to focus on investigating, fighting crime and ensuring that people in mental health crises get the right care from the right agency at the right time.

It is vital that the law-abiding public do not face a threat from the police themselves. Those who are not fit to wear the uniform must be prevented from doing so. Where they are revealed, they must be driven out of the force and face justice. We have taken steps to ensure that forces tackle weaknesses in their vetting systems. I have listened to Sir Mark and his colleagues; the Home Office is reviewing the police dismissals process to ensure that officers who fall short of expected standards can be quickly dismissed. The findings of Baroness Casey’s review will help to inform the work of Lady Angiolini, whose independent inquiry, established by the Government, will look at broader issues of police standards and culture.

I would like to turn to two particularly concerning aspects of Baroness Casey’s report. First, it addresses questions of racism, misogyny and homophobia within the Metropolitan police. Baroness Casey has identified evidence of discriminatory behaviour among officers. I commend those officers who came forward to share their awful experiences with the review team. Discrimination must be tackled in all its forms, and I welcome Sir Mark’s commitment to do so. I will be holding the Metropolitan police and the Mayor of London to account by measuring their progress. I ask Londoners to judge Sir Mark and the Mayor of London not on their words but on their actions to stamp out racist, misogynistic and homophobic behaviour. Action not words has been something that victims of police misconduct and criminal activity have asked for.

Secondly, officers working in the parliamentary and diplomatic protection command perform a vital function in protecting our embassies and keeping us, as Members of Parliament, safe on the parliamentary estate. Baroness Casey’s report is scathing in its analysis of the command’s culture. The whole House will be acutely aware of two recent cases of officers working in that command committing the most abhorrent crimes. I expect the Metropolitan police to ensure that reforms reflect the gravity of her findings, while ensuring that the command’s critical security functions are maintained. The Home Office and the parliamentary security department will work closely with the Metropolitan police to ensure that that happens.

Although I work closely with the Metropolitan police, primary and political accountability sits with the Mayor of London, as Baroness Casey makes clear. I spoke with the Mayor yesterday; we are united in our support for the new commissioner and his plan to turn around the Met so that Londoners get the police service they deserve. We all depend on the police, who overwhelmingly do a very difficult job bravely and well. It is vital that all officers maintain the very highest standards that the public expect of them. Londoners demand nothing less. I have every confidence that Sir Mark Rowley and his team will deliver that for them. I commend this statement to the House.

The report published today by Louise Casey, commissioned by the Mayor of London, into standards and culture in the Metropolitan police service is thorough, forensic and truly damning. It finds that consent is broken, management of the force has failed and frontline policing,—especially neighbourhood policing—has been deprioritised and degraded after a decade of austerity in which the Met has ended up with £0.7 billion less than at the beginning of the decade. It finds that the Met is failing women and children, and that predatory and unacceptable behaviour has been allowed to flourish. It finds institutional racism, misogyny and homophobia.

Baroness Casey pays tribute to the work that police officers do and the bravery that they show every day, as we all should, because across the country we depend on the work that police officers do to keep us all safe—catching criminals, protecting the vulnerable and saving lives. We support them in that vital work. But that is what makes it all the more important that the highest standards are maintained and the confidence of those the police serve is sustained, otherwise communities and the vital work that police officers do are let down. We support the work the new Met commissioner is doing now to start turning the Met around. He and his team must now go much further in response to the Casey review, but I am concerned that the Home Secretary’s statement is dangerously complacent. Astonishingly, there is no new action set out in her response, simply words saying that the Met must change. This is a continuation of the hands-off Home Office response that Baroness Casey criticises in her report. Some of the issues raised are particular to the Met because of its size, history and particular culture, where the Home Secretary and Mayor are jointly responsible for oversight and where the commissioner is responsible for delivering, but the report also raises serious wider issues for the Home Office.

The failure to root out officers who have been involved in domestic abuse or sexual assault also applies in other forces. The failure to tackle culture has gone wrong in other forces too, with problems in Gwent, Hampshire, Police Scotland, Sussex, Leicestershire and more. It is a disgrace that there are still not mandatory requirements on vetting and training, underpinned by law, and that misconduct systems are still too weak. I urge the Home Secretary to commit now that anyone under investigation for domestic abuse or sexual assault will be automatically suspended from their role as a police officer, and that anyone with any kind of history of domestic abuse or sexual assault will not be given any chance to become a police officer. We need an urgent overhaul, underpinned by law. Will she give us that commitment today?

The Home Office approach more widely to standards is also failing. Six police forces are in so-called special measures, but it is still too easy for forces to ignore the recommendations from the inspectorate and the intervention processes are too weak. Where is the Home Secretary’s plan to turn that around?

The report is damning about the decimation of frontline policing, but neighbourhood policing has been decimated everywhere, not just in the Met. There are 6,000 fewer police officers in neighbourhood teams and 8,000 fewer police community support officers than just in 2016, and it is worse than that because officers are routinely abstracted for other duties. So where is the plan to restore neighbourhood policing? Labour has set out a plan. We would work with the Government on this, but where is the Government’s plan?

The report is devastating on the lack of proper public protection arrangements for women and children who have been let down, but again we know that across the country prosecutions for rape and domestic abuse have plummeted and serious cases have too often been dismissed. Again, where is the national action plan to improve public protection? Where is the commitment to specialist rape investigation units in every force and specialist domestic abuse experts in 999 control rooms? It is not happening.

The findings on institutional misogyny, racism and homophobia are based on evidence and clear criteria that Baroness Casey has set out for measuring change with recommendations. The Home Secretary rightly says she wants discrimination tackled in all its forms, but she has been telling police forces the opposite in telling them not to focus on those issues. Where is her plan now to turn that around? Where is the Home Office plan in response to this, on standards, on neighbourhood policing, on violence against women and girls, and on systemic or institutional discrimination? Where are those plans?

The British policing model is precious. The Peel principles, which started in London— policing by consent—said

“that the police are the public and that the public are the police”.

They are our guardians, not our guards, but that precious policing model is in peril. The Home Office and the Home Secretary are the custodians of that tradition, but the lack of any plan to restore trust, to stand up for policing or to turn things around is letting everyone down. It is not standing up for the police; it is letting both the police and communities down. It is because we believe in policing and because we believe in those Peel principles that we know standing up for the police also means working with the police to deliver change and to restore the trust, confidence and effective policing that all police officers and communities properly deserve.

I must say that I am disappointed by the right hon. Lady’s tone. Today is not a day for crass political point scoring; it is a day for serious and sober consideration of the Met’s shortcomings and how those shortcomings have a devastating impact on people’s lives. The victims have asked for actions, not words, and I, along with the Mayor of London, have every confidence that Sir Mark Rowley and his team will deliver their plan to turn around the Met. Accepting Baroness Casey’s findings is not incompatible with supporting the institution of policing and the vast majority of brave men and women who uphold the highest professional standards. I back the police; I trust them to put their safety before ours.

On the topic of national standards, I am working with chief constables on a programme to drive up standards and improve culture across police forces at a national level. On the topic of institutional racism, I agree with Sir Mark Rowley. It is not a helpful term to use; it is an ambiguous, contested and politically charged term that is much misused and risks making it harder for officers to win back the trust of communities. Sir Mark is committed to rooting out discrimination, in all forms, from the Met. I believe that it is how the Met police respond to the issues that is important, not whether they accept a label.

Trust in the police is fundamental, and I will work to support Sir Mark Rowley in his work to change culture and provide the leadership that the Met needs, but I would point out to the shadow Home Secretary that her crass political attacks really would be more accurately directed at the person with actual and political responsibility for overseeing the performance of the Met: that is the Mayor of London, Labour’s Sadiq Khan. The Labour Mayor has been in charge of the Met for the past seven years. Baroness Casey is unflinching and unequivocal about the dysfunctional relationship between the Mayor’s office and the Met, and her recommendation that the Mayor takes a more hands-on approach. It was frankly shocking to learn that the Labour Mayor does not already chair a quarterly board meeting to exercise accountability over the Met. I trust the shadow Home Secretary will agree that the Mayor accepts Baroness Casey’s recommendation that he do so.

Londoners have been let down by the Met. The shadow Home Secretary knows who is ultimately responsible for that. She should not be looking to score political points today: it is a disappointment, and frankly she should know better.

Everyone in the House will back up what the Home Secretary, Baroness Casey and the shadow Home Secretary have said about our reliance on the police and our support for them, but there are times when we have to look at how often the police, the police authority, the Mayor and the Home Secretary have not put things right.

I will give as an example the high-profile case of the Sikh police officer Gurpal Virdi, who 25 years ago was in effect accused of doing something he had not done. We had the Muir report at the end of 2001, which showed what the police ought to do to do things right. We had the report by Sir William Morris, as he then was, in 2004. Before that we had had the Stephen Lawrence inquiry by Sir William Macpherson, advised by the former police officer Tom Cook, by the human rights expert Dr Richard Stone and by John Sentamu, who later became the Archbishop of York. What they recommended has not happened.

Now we have the Casey report. I say to the commissioner of the Met police, to the Mayor and to my right hon. and learned Friend the Home Secretary: have a review into what happened in the Gurpal Virdi case, including his prosecution eight years ago for a non-offence, where the only evidence exonerated him. Until that is done, people will not have confidence in people putting things right. It may be one case, and many other examples will be given in the next few minutes, but Sergeant Gurpal Virdi has been the victim of more injustice from the police, over decades, than I have ever seen in my life.

My hon. Friend is absolutely right about the devastating stories of misconduct, inappropriate behaviour, discrimination and poor standards. No one is denying that. Baroness Casey’s review is unequivocal about the failings, cultural and more widespread, within the Met. It is right now that we need to see real change. The Met commissioner has put in place a plan. He is already working and making progress on increasing standards, improving behaviour and ridding the force of those who do not deserve to wear the badge. We should all get behind him in that objective.

The findings of institutional racism in the Met made 24 years ago, the findings of institutional corruption in the case of Daniel Morgan more recently, the homophobia in the botched Stephen Port investigation, the misogyny, homophobia and racism in the Charing Cross inquiry, the criminal misconduct of police officers in the murders of Bibaa Henry and Nicole Smallman, the strip-searching of Child Q, the numerous Independent Office for Police Conduct investigations and damning HMICFRS reports, the abduction, rape and murder by a serving police officer and the case of the serial sex offender David Carrick were all not enough to provoke real change, so can the Home Secretary say what is now different about this report? Is she confident that the Met can change?

It is clear just from the examples to which the right hon. Lady refers and from this report that all the behaviour, including instances of racism, homophobia and misogyny, is completely unacceptable and that standards must improve. Sir Mark has been clear that he is not shying away from the enormity of the challenge. He has a plan in place to ensure that standards are increased, that more rigour is instilled in the Met and that there is a better and more robust response when standards fall short. It is absolutely vital that they rebuild trust and improve standards so that all Londoners have confidence in the Met.

This is a shocking report, and it is particularly galling for the majority of decent officers who do an outstanding job day in, day out. Whether or not we think the Met is institutionally racist, misogynist or homophobic, it is certainly institutionally incapable of bringing in strong and consistent leadership, although I exclude the new commissioner from that, or of recruiting enough people of sufficient calibre to make good officers. Does the Home Secretary share my concerns that the police’s solutions are still too much about bringing in more police to mark the homework of other police? Has she given thought to bringing in leading people from other disciplines such as the Army or business to provide proper, independent executive scrutiny and promote new ways of working?

My hon. Friend is absolutely right that standards need to improve and that doing more of the same is not acceptable. Ultimately, independent scrutiny is provided for by the Mayor of London’s office; those are independent, publicly accountable individuals who bring that outside scrutiny. Baroness Casey’s report is clear that that has not been good enough to date. That is why we all need to get behind the Met to ensure that standards improve.

I am struggling to establish the point of the Home Secretary when it comes to the Met. With this hands-off approach, it is as though nothing is the her responsibility. When the Mayor of London got rid of the last commissioner, the Home Secretary continually attacked the Mayor of London’s correct decision. We have heard about all the other reports, including the 1981 Scarman report on the Brixton riots, the 1999 Stephen Lawrence report, the 2021 IOPC report on Nicole Smallman and Bibaa Henry, and the 2021 report on Daniel Morgan, which found that the police were institutionally corrupt. The IOPC report on the Stephen Port murders found that the police were homophobic, and some of them are still working in Barking. Operation Hotton made 15 recommendations; those recommendations have still not been implemented in the Met. Why is the Home Secretary not taking any responsibility in her role in the Met? If she does not want the responsibility, for goodness’ sake, will she just stand down?

I am afraid that the hon. Lady needs to direct some of her criticism towards the person who is directly responsible for the performance of the Met: that is, unfortunately, her Labour colleague the Mayor of London. He has been on the receiving end of particular criticism in the report, although I am glad to hear that he is forward-leaning in accepting the recommendations and turning around the way in which he is holding the Met to account. When it comes to changing the law or introducing any frameworks that are necessary, we in the Home Office will do that—we are already consulting on the dismissals process, and we have instituted a regime of better vetting with the College of Policing—but I am afraid that, ultimately, the hon. Lady’s ire should be focused on her colleague in London.

The sad reality is that, as Opposition Members have just highlighted, over the past 18 months we have seen report after report, and it is now incumbent on us, if we are to secure the whole notion of policing by consent and to elevate public trust and confidence in policing, to see action going forward. The Casey review identifies a range of directions that are required across the board. May I suggest to the Home Secretary, and indeed the Mayor of London, that we should start to see a performance plan for the Metropolitan police to ensure that individuals are held to account? We have strong leaders in the new commissioner and his deputy, and we need to back them, but given the amount of money that goes into the Metropolitan police, I think that that money should bring about the outcomes, such as performance changes, that the British public, and the people of London in particular, desperately want to see.

My right hon. Friend is absolutely right, and I pay tribute to her leadership in respect of positive change and improving police standards when she was in this role. I do back Sir Mark and his team: he is the right person to lead the organisation towards reform and improvement. He has set out a turnaround plan and is making progress in realising its objectives, and it is vital that we support him in that.

Like many London MPs, I deal with constituency cases—from modern slavery to stalking—in which ethnicity, gender or sexuality is a factor, but the victims complain that those factors are not taken seriously by police investigators. What can I tell them that the Home Secretary will do, following this damning report, to give them dignity, respect and, above all, justice?

Discriminatory attitudes and homophobic, racist or misogynistic behaviour have no place in policing. All the case studies and references in the report make for shocking reading. The ability of the police to fulfil their duties is essential, but what we have seen is a real impediment preventing chief constables from dismissing and getting rid of officers who are not fit to wear the badge, for a host of reasons. We in the Home Office are currently consulting on the dismissals process, and if necessary I will change the law to empower chief constables to better control the quality of the officers in their ranks.

For anyone who, like me, has worked with the Metropolitan police over many years, this is a dark if not catastrophic day. While our thoughts are primarily with the many victims who have been let down and failed by the force, obviously we all reserve a huge amount of disappointment for the officers who do a startlingly good job every single day. Many of us who have visited the Met will have seen their work over the years.

I hope the Home Secretary will agree that key to turning the force around is ensuring that this becomes a joint enterprise between City Hall and the Home Office. There has clearly been a failure of local accountability—and I speak as someone who has urged the Mayor, both in public and in private, to lean into the governance of the Metropolitan police during his time in office. On that note, would it be possible for the Policing Minister to sit on the new board that Baroness Casey wants to be convened to supervise changes within the Met, and will the Home Secretary discuss that with the Mayor?

I hope that the Home Secretary will also agree that key to turning around policing in general is the professionalisation of the workforce. She recently decided to cancel the policing education qualifications framework route into policing, although it held out the promise of the kind of continuing professional development that many people believe police officers need during their careers to keep them on the straight and narrow, in terms of values and operational practice. Will she reconsider her decision to cancel that project?

My right hon. Friend makes an important point about the quality of accountability. The report identified a dysfunctional relationship between the force and the Mayor’s Office for Policing and Crime, and the Mayor needs to ensure it is reset as a matter of urgency. That local accountability is absolutely critical if we are to see meaningful improvement. My right hon. Friend also referred to leadership training within the ranks, which is something I am very interested in. We are making progress with the College of Policing, in particular, towards rolling out better leadership training in order to create a good cohort of leaders in policing for the future.

Nearly 25 years after the Macpherson report, it is damning that the Casey review has found that the Met remains institutionally racist, and is now misogynistic and homophobic as well. Its actions can seriously undermine policing by consent, and without wholesale reform it will be impossible to rebuild trust and confidence in our communities in London. My constituents in Battersea deserve a force they can trust, so will the Home Secretary end the postcode lottery that exists in place of standards by implementing national standards in relation to vetting, misconduct and training?

We are already working with the College of Policing to ensure that there is a statutory code setting out the standards for vetting and recruitment. However, as Baroness Casey makes clear, it is vital that the law-abiding public never face a threat from the police themselves. Those who are not fit to wear the badge should be rooted out, but they should never enter the force in the first place.

My right hon. Friend is absolutely right to say that every police officer has to be part of the solution, but when a female officer comments to Baroness Casey that she would have been better off suffering in silence, that does not engender confidence in women across the capital—including, importantly, women serving in the Metropolitan Police Service—that they will be empowered to speak out. What specific measures can my right hon. Friend reassure us will be put in place to ensure that those good officers, who we know make up the bulk of the Metropolitan Police Service, are supported when they speak out, and do not see their own careers suffer?

The turnaround plan deals specifically with how to institute a better framework so that people who are on the receiving end of unacceptable behaviour can report incidents in the knowledge that they will not be penalised for doing so, and ensuring that those who are perpetrators of, or responsible for, unacceptable behaviour receive meaningful sanction and are no longer permitted to wear the badge.

While there are many dedicated and decent police officers who serve our capital with integrity and professionalism, Londoners’ confidence in the Met police will be utterly shattered by the horrors and systemic failures revealed in Baroness Casey’s report—and I dare say that the party political point scoring we are hearing from the Dispatch Box will not help. Does the Home Secretary really think that next time I visit a school or college in my constituency, I shall be able to look a young woman or person of colour in the eye and tell them to pick up the phone to the police when they are in danger, or indeed consider a career in the Met?

The report is scathing in tracking and describing incidents of misogyny and the way in which confidence has been broken among women and girls, and it is therefore vital that we work with the Met police to restore that confidence. The Soteria programme, to which Baroness Casey expressly refers, must be rolled out and implemented meaningfully when it comes to the investigation and prosecution of rape and serious sexual offences. We are already seeing some improvement in police referrals of rape complaints to the Crown Prosecution Service, but it is clear that, although we are on the right track, more must be done.

The immediate political acceptance of Baroness Casey’s report demonstrates that nothing has changed since the publication of the Macpherson report 24 years ago. Many think that the report in itself is a panacea to change. Does the Home Secretary not agree that it would be more effective to abolish the Metropolitan Police Service, transfer the specialist operations to the remit of the Home Office and establish a police service for London to focus solely on the maintenance of law and order?

I do not agree that we must abolish the Metropolitan Police Service. I think we need to institute a wide-ranging programme of profound reform, and that is why I think that Sir Mark is absolutely right in his turnaround plan, which deals specifically with the systemic problems—problems that, unfortunately, are not new but of which we are all aware—that need root-and-branch reform. That is why he is in the right position to effect that change.

I want to put on record my thanks to Baroness Casey for her report, but it has reached the damning verdict that London’s women and children have been left even further behind. The report states:

“The de-prioritisation and de-specialisation of public protection has put women and children at greater risk than necessary. Despite some outstanding, experienced senior officers, an overworked, inexperienced workforce polices child protection, rape and serious sexual offences.”

Her report recommends specialist units to deal with violence against women and girls, and it is clear that this must happen across the country. Will the Home Secretary today back Labour’s plans to introduce 999 specialist call handlers for domestic abuse and specialist rape units in every police force, or bring forward her own urgent plans to do so?

I take violence against women and girls extremely seriously. That is why I added VAWG to the strategic policing requirement, meaning that it is set out as a national threat for forces to deal with specifically. We are funding the first full-time national policing lead for VAWG, DCC Maggie Blyth, who is driving improvements in the police responses. We are also providing up to £3.3 million for domestic abuse matters and consulting on increasing the powers that police have in responding to this heinous crime. There are many measures and initiatives that we have brought in over the years, and I am proud of this Government’s track record on supporting women and girls.

Baroness Casey’s review makes for grim reading, and I pay tribute to her hard work and forensic gathering of evidence. We must remember that that evidence is available thanks to the many police officers who were brave enough to speak to Baroness Casey for her review. Next month marks the 30th anniversary of Stephen Lawrence’s murder, and we have seen from Baroness Casey’s review that things have not progressed, even though we have had inquiry after inquiry. Does my right hon. Friend the Home Secretary agree that the time has now ended and we must ensure that the Metropolitan Police Service cleans itself up, and that the Mayor of London has a major part to play in ensuring that police officers are held to account?

My hon. Friend is right to say that discriminatory attitudes and behaviours, whether racism, misogyny or homophobia, have no place in policing. I was appalled to read the shocking stories in the report. We need to ensure that the police act with the highest levels of honesty and integrity. We have to ensure that standards are improved, that we strengthen vetting, and that there is better police training and a more diverse leadership pipeline. All those measures, supported by the Mayor of London, will bring about real change.

I associate myself with the words of the Father of the House about Gurpal Virdi. The relationship between the Metropolitan police and the Asian community, particularly in west London, was damaged by that case and also by the failure of the Met to properly investigate the death of my constituent Ricky Reel 25 years ago. It was subsequently discovered, when Ricky’s family were appealing for more police resources, that police resources were being applied to surveilling the family and the campaign itself.

The new commissioner has launched a new inquiry with a new inquiry team, but we need the assistance of the Home Secretary in releasing the confidential report that was undertaken by the Police Complaints Authority in the late 1990s exposing the failures of the original investigation, as well as the family liaison officer logs that were kept during that period, so that we can again look at what happened to Ricky subsequent to the racial attack that he suffered. The ownership of those documents is with the Home Secretary, not with the Met commissioner. I wrote to the Home Secretary in February about this. Please can I have a positive reply as soon as possible, to reassure the family?

It is clear that the Met needs to command the confidence of all communities, including those from black and ethnic groups, in London. That is why Sir Mark’s turnaround plan specifically covers better engagement with communities; it is vital that trust is rebuilt within those communities. There are lots of measures in train and I know that the Met commissioner takes very seriously the relationship and the trust among communities. I will look into the specific issue to which the right hon. Gentleman refers.

Today’s findings are very concerning and I know that my right hon. and learned Friend will do what she can to hold the Met and the Labour Mayor—the police and crime commissioner for London—to account after seven years of failure. What assurances can she provide that the thousands of decent and hard-working police officers can continue to focus on fighting crime, which I believe is the best way to restore public trust? Will she please urge the Met to reverse Sadiq Khan’s tri-borough policing policy, which continues to negatively impact policing in Bexley and starve it of resources?

Thanks to this Government, the Met now has a record number of police officers—the highest it has ever known in its history. That increase in meaningful resource on the frontline will make a difference to how it effectively polices and safeguards Londoners. We have also seen a cash increase in Met funding since 2010, and that is being put into increased resources. It is vital that we now work with Sir Mark and his team to ensure that there is a proper turnaround.

It is clear that some basic policies and procedures have gone seriously wrong. When an individual is raped, the advice is to keep the specimens in a refrigerator, so how can it be that during a hot spell last summer the refrigerator broke down and there was no back-up plan? How can that be? What is the Home Secretary going to do for every victim whose evidence was in that refrigerator? What is the plan? Is it to go back to those victims, apologise and explain what happens next?

The particular incident to which the hon. Lady refers is shocking and unacceptable. It must not happen again. It is absolutely clear that that is true.

Progress has been made. I have emphasised the importance that I attach to VAWG and the investigation and prosecution of rape. It is clear that police forces all around the country need to do better. We are seeing progress on the timeliness of investigations and the number of cases referred to the Crown Prosecution Service for charge; there is an increase in the number of independent sexual violence advisers and independent domestic violence advisers, who significantly increase the chances of a successful prosecution; and we have introduced special measures so that victims of rape and serious sexual offences can give evidence in a better way. There are many measures, but I am clear that I am not going to rest until we really succeed on this problem.

I met the Met police a few weeks back with the Home Affairs Committee, and I was astounded to learn that officers who have been there for over 20 years are now investigating a culture that is well over 20 years old. Does my right hon. and learned Friend think it would be a good idea for more independent people to come into the Met force to investigate?

As Baroness Casey accepted, the vast majority of police officers uphold the highest professional standards, and I pay tribute to them for their everyday bravery in keeping Londoners safe. We must make sure that the Met continues to attract the best and brightest people from all walks of life so that they can bring diversity, expertise, experience and skills to ensure that it is the best force that we can have.

I represent a constituency in Lambeth, where trust in policing is at the lowest level of anywhere in London. Instead of addressing the abuses of existing police powers, the Government seem to be creating new unaccountable powers. My constituency has sadly seen the death of two young people at the hands of police officers in the past two years alone, with the tragic murder of Sarah Everard in March 2021 and the fatal shooting of Chris Kaba in September 2022. This report is not the first to highlight institutional racism, sexism and homophobia, which the Home Secretary seems unwilling to accept.

We have to undergo a security check, including police checks, to work in this House. How hard is it to ensure that every single officer is run through a similar check? Will the Home Secretary commit today to doing that? I asked the new commissioner who is responsible for suspending officers for misconduct, and he said that, under the law, it is the Home Secretary’s responsibility. In November 2022, a response from the Minister for Crime, Policing and Fire said it was the commissioner’s responsibility. The Home Secretary has said today that there are impediments and that she could potentially change the law to make sure that this happens. Can she please explain who is in charge and exactly what is going on?

I have taken action by consulting on the disciplinary process. Vetting standards are set by the College of Policing, via its statutory code of practice and its authorised professional practice guidance on vetting, to ensure that standards are improved. I asked the inspectorate to conduct a rapid review of all forces and their responses to the report’s findings. The Policing Minister has led a lot of work with the College of Policing to strengthen its statutory code of practice for police vetting, making the obligations that all forces must legally follow stricter and clearer. We are doing work in the Home Office, but I am afraid that, ultimately, political accountability lies with the Mayor of London.

I note the Home Secretary’s support for the commissioner, but could it be the case that the future of the Met hangs on one word: “ambiguous”? Not “institutional” but “ambiguous”. Is there anything ambiguous in either the findings, the recommendations or the terminology that the Home Secretary has seen in the Casey report?

Baroness Casey is clear that the vast majority of serving police officers in the Met uphold the highest professional and cultural standards. This report is not about them but about the unambiguous systemic failings of culture, management and accountability. I am very keen for us all to learn from this diagnosis, from which reform must grow.

The Home Secretary is primarily responsible for the funding, which has seesawed, the vetting, which she just touched on, and, critically, the structure of the Metropolitan police. On the latter point, she has talked about the need for reform. Can she tell the House whether she has had any discussions about, or whether she is even considering, breaking up the Metropolitan police to take out counter-terrorism and leave a London police force for Londoners?

Even Baroness Casey does not recommend breaking up the Metropolitan police, so I do not support that proposal. The hon. Lady mentions funding, so let me be clear that cash funding for the Met has increased since 2010. The Met gets 57% more funding per capita than the rest of England and Wales, and 24% more than the next highest-funded force, Merseyside, which has a higher level of crime. On all accounts, there is funding for the Met and there should be no reason for a failure to improve.

Baroness Casey’s review makes stark reading: “too little humility”, “denial”, a culture of covering up problems and a lack of emphasis on the issues that matter most to those the Met is meant to serve. That is compounded by, in the report’s words,

“institutional racism, misogyny and homophobia”.

When the Home Affairs Committee has been to meet Sir Mark and his team over recent months, it has been clear that they are working hard to turn around this culture and to root out the officers at the heart of doing so much harm to the public’s view of the force, but the public can wait only so long for this turnaround to happen. Can my right hon. and learned Friend confirm by what time and what metrics she will be looking to see whether the right reforms are taking root?

The new Met commissioner has been in place for only six months. From the moment he was appointed, he has been clear and unequivocal about the size of the challenge he faces and what it will take to turn it around, which is why he set out in detail his plan to restore trust and raise standards. He now needs all our support to ensure he can achieve that plan as quickly as possible.

My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) specifically asked the Home Secretary about the seesawing, as well as the inadequacy, of funding. The report has a chapter on the inexperience of new officers. Does the Home Secretary now regret her Government’s decision to cut 20,000 officers?