Wednesday 17 May 2023
[Mr Clive Betts in the Chair]
Public Bodies and VAT
I beg to move,
That this House has considered public bodies and VAT.
It is a pleasure to serve under your chairmanship, Mr Betts. Hon. Members will be well aware that His Majesty’s Treasury tends jealously to guard its primacy on tax matters. Indeed, I remember as a Minister frequently being given a briefing inviting me to respond to questions about tax with the simple words, “This is a Treasury matter.” If I ever sent officials to the Treasury to raise an idea or discuss a particular matter, they would go away with a look of trepidation in their eyes and come back looking rather chastened. However, I never accepted that tax is a matter for the Treasury alone. I have always believed that it is a matter for the Government as a whole because tax affects every industry, every public body and every Department. Its effect on all those things means there is also a vital role for Parliament in scrutinising tax policy.
I want to focus on the Value Added Tax Act 1994 and the way we treat public bodies—especially the unfair treatment of further education colleges. The United Kingdom was forced to introduce VAT when we joined the European Economic Community in 1973, and over the years VAT became one of the big three tools used by Government to raise revenue. It has also been the main go-to tool for Governments when they are trying to deal with a crisis. VAT was slashed after the financial crisis of 2008, and again during the covid pandemic.
Under the VAT rules, tax can be levied on goods at either the standard rate—the full 20% tax is levied on sales—or at a reduced rate of 5% for certain items, such as children’s car seats. There are also zero-rated goods—principally food and children’s clothing. Finally, there is another category—exempt goods. That applies to many services, including insurance, finance and, notably, education.
The 1994 Act established a basis for public bodies to reclaim the VAT on their purchases, even though their services were exempt. That applies in particular to councils, the police, schools or academies and, notably, museums. However, there is an anomaly in the way the tax system works, in that FE colleges are not on the section 33 list that would make them exempt.
The right hon. Gentleman is making an important and useful speech. Does he agree that the VAT trap has sometimes been used as a way to lure institutions out of the maintained sector and into academisation and that that is another lever that the Government have used the VAT system to create? That has affected institutions such as Hills Road Sixth Form College, Long Road Sixth Form College and Cambridge Regional College.
The hon. Gentleman makes an important point, but academies are included on the exempt list, which the Government amended specifically when academisation started, so that schools would not be placed at a disadvantage by leaving the local authority. Councils are also on the list, so they can reclaim their VAT inputs.
My argument is that His Majesty’s Treasury should, at the earliest opportunity, introduce a statutory instrument with respect to section 33 of the 1994 Act to ensure that FE colleges are treated fairly and that this anomaly is corrected. FE colleges would therefore be able to reclaim VAT on their inputs.
The Treasury guards tax policy ferociously, but it also has a duty to be fair and consistent and to at least have defensible policies in these areas. Under the current arrangements, there is a ludicrous situation whereby a school with a sixth form can reclaim its VAT, but an FE college with a sixth form cannot. That makes no sense whatever.
My right hon. Friend is making a really important point. Chelmsford College in my constituency provides an outstanding education to young people from all over Essex, providing skills and training, as well as education. It pays around half a million pounds a year in unrecoverable VAT, which means it cannot pay the same level of remuneration to its staff as a local school with a sixth form can. That is not fair, not just for the college, as compared with a school or academy, but for the young people involved.
My right hon. Friend raises an incredibly important point. It is profoundly unfair on the young people who choose to attend an FE college, and perhaps even to do A-levels in its sixth form, that the college is treated differently—almost as a second-rate institution—when a school with a sixth form enjoys the higher funding and benefits that come with being able to reclaim VAT.
I apologise to my right hon. Friend and the Minister that I cannot stay, but I will read very carefully what the Minister says. Perhaps she could quantify what she thinks the VAT take from FE colleges is, so that we know what we are discussing.
Does my right hon. Friend the Member for Camborne and Redruth (George Eustice) agree that we are not discussing a free gift to FE colleges? Like Colchester Institute, which serves my constituency, they are suffering an unparalleled financial squeeze at the moment and are having to inflict redundancies and cost reductions against a background of very low pay for most of the academic staff. Unless the Government can resolve that anomaly, FE colleges will face a crisis.
My hon. Friend raises an important issue, which is affecting colleges in Colchester, the rest of Essex, Cornwall and the whole country. The cost of having staff at an FE college to run courses in practical skills such as electrical engineering or bricklaying and construction is probably higher than at a university, which can just cram a couple of hundred students into a lecture theatre and simply deliver a lecture. The cost of providing those important skills, which are vital to our economy, is higher. My hon. Friend is right that it is incredibly difficult for FE colleges to recruit and retain staff, because of the squeeze on their budgets, so we need to do better.
During the EU era, the Government were able to blame EU law for the fact that FE colleges had to be treated differently. I have done my share of blaming EU law in the past for various things that were my responsibility, but EU law is no longer a barrier and cannot be used as an excuse or a reason for not doing the fair and just thing. We have now vanquished EU law and we have the freedom and power to set a coherent tax policy that is consistent and fair.
Doubts have sometimes been expressed about whether FE colleges are public bodies per se, but that has now been settled. I understand that, last autumn, the Office for National Statistics, which has been going through a rather tortuous classification exercise, has deemed that all sorts of bodies that might have been considered private are now public. It has cleared the issue up and said that FE colleges are public bodies, and in my view they should therefore be included in the section 33 list of public bodies that can reclaim VAT.
I have looked at parliamentary questions that have been raised in this area, and Treasury Ministers have sought to insist that the ONS designation does not change anything and, indeed, that it does not change the Treasury’s right to set out what it considers the right bodies to be included in the section 33 list. That might be the case, but the House is entitled to a rational answer as to why FE colleges are treated differently. We are entitled to insist on consistency and fairness in the tax system and, therefore, to request and require the Government to bring forward a statutory instrument to remedy this unfair situation.
This issue matters because the FE sector really matters. I declare an interest: as a teenager, I attended Cornwall College, which has a campus in my constituency and is the leading FE college there. My hon. Friend the Member for St Austell and Newquay (Steve Double) is also passionate about the interests of the college, which has a site in his constituency. I learned to arc weld at the college; I was not particularly good at it—indeed, I returned recently and tried my hand at it, and if I was not good then, I am certainly not very good now. I also attended a course on business studies and management, and a second course on farm management, and the skills and knowledge I gained were invaluable to me, not just during my first career, when I went into the farming business, but for things I have done since.
A succession of Ministers in this Government have been passionate about the FE sector and have recognised the importance of apprenticeships. The Government can be proud of the way they have tried to raise the status of vocational courses through apprenticeships. That is one of their great achievements; it started under the coalition Government and has been maintained. That is important, because apprenticeships add real value to the real economy, but we have to put our money where our mouth is, and at the moment FE colleges just do not have a fair financial settlement.
We often point to the success in technical skills of other countries in Europe and elsewhere, and we argue that we want to match that. We have lots of good ideas about apprenticeships and raising the standard and consistency of the courses, but sadly it feels like we do not follow through by providing the funding offered by countries that have shown us how to do technical skills properly.
Last year, schools were rightly given an injection of about £2 billion to help them with the cost of energy and the pressures on labour charges and wages. We all have schools in our constituencies that are suffering those pressures, but FE colleges, although they had some uplift, received just a fraction of what schools were given. Again, it is difficult to escape the impression that they were treated unfairly.
FE colleges are really struggling to recruit staff. They have the difficulty of running courses that are much more hands-on. There are all sorts of health and safety considerations for courses such as bricklaying, carpentry or electrical engineering, and the tutor-to-learner ratios are probably much higher than in universities, where everyone is just sat in a lecture theatre with their notebooks out. The situation is very different, and it is much harder for FE colleges to cope with fewer staff. Because these are successful parts of the economy—wages have been rising for technical skills such as electrical engineering and construction—it is difficult for colleges to lure people back from the private sector. They often find that people do the work partly out of a sense of duty or public service.
It is important that we recognise that, because the FE sector really matters. It gives us the skills we need for the economy of the future. We increasingly recognise that if we want to level up economic growth around this country, we need to rekindle and start to respect again manufacturing industries and the sectors of the economy that require technical skills. We cannot just get by with people in pen-pushing roles and the service industry; we have to recognise the value of those skills and fund them.
Even in new sectors of the economy, such as computer software and coding, the best way to learn those skills is often in a business, so that an apprentice can actually learn the approach taken by an individual computer software company and really learn on the job, while getting generic training in computer coding from the local FE college as well. As my right hon. Friend the Member for Chelmsford (Vicky Ford) said, we should value young people who have chosen such a career and to train in something that will be of real value to our economy.
The Budget earlier this spring had much in it to welcome. In particular, I welcomed the introduction of investment allowances, which will benefit the manufacturing sector and help it to get tax relief and capital allowances for investments in business, but I must say that it feels like there was a failure to support FE colleges in the Budget. That was disappointing for many Members on the Government Benches, and dozens of us wrote to the Chancellor asking him to take the plight of FE colleges seriously and to look at whether additional funding to help FE colleges could be found, but that appeared to fall on deaf ears. I hope the Chancellor will take the earliest opportunity to put that right and rectify that unjustified omission.
I invite the Minister simply to commit to bring forward a statutory instrument under section 33 of the 1994 Act. I appreciate that she may need to do a bit of a Government write-round before being able to commit fully, but I hope she will at least express an openness to the idea and give us a clear explanation, if she is able to, of why a school with a sixth form can reclaim VAT, but an FE college with a sixth form cannot. That is the key question, which highlights this terrible unfairness.
In conclusion, many hon. Members on both sides of the House want to see fairer funding for FE colleges. Introducing the change I have set out would help; it would not involve a huge amount of money, but it would probably give FE colleges somewhere in the region of a 2% to 4% respite on their budget. They would probably all use that money immediately to help retain and recruit staff. It is a relatively small amount of money but, like my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin), I am interested to hear what the Minister considers it would cost. Among those who support the change is my hon. Friend the Member for Worcester (Mr Walker), who is Chair of the Education Committee. There is widespread support for this, and I very much hope that the Minister will give us positive news in her response.
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my right hon. Friend the Member for Camborne and Redruth (George Eustice) on securing this very worthwhile debate. I agree with much of what he said about the impact this issue has on the further education sector, and that will be the focus of my remarks as well.
For background, there are 10,000 public sector organisations in the UK, the vast majority of which can claim the VAT they pay back from His Majesty’s Revenue and Customs, on the basis that that simplifies budgeting. Although public bodies may account for VAT on supplies of goods and services in the same way as any other business, they will often undertake non-business activities, which are outside the scope of VAT. As HMRC’s own guidance for local authorities and other public bodies explains:
“the general rule is that where a public body is funded by way of public expenditure (such as grant-in-aid) to do something for the public good, it’s unlikely to be engaging in business activities for VAT purposes.”
In that context, the term “public body” already includes Government Departments, non-departmental public bodies, NHS bodies, local government bodies, the police and fire and rescue services.
The impact of VAT on further education and sixth-form colleges—in particular, South Devon College in Paignton —is significant. The crucial background to the argument being made today is this: 228 further education and sixth- form colleges, operating from around 850 campuses across England, were reclassified as public sector organisations in November 2022 and are now subject to the same controls as academies and other local organisations, but they must still pay VAT, without having an opportunity to recover it, because they are not part of the refund scheme.
That has significant consequences. It means that money that Parliament voted to have spent on 16-to-19 education is taxed if spent on colleges. Colleges account for the vast majority of students taking T-levels, and their students in general are more likely to come from disadvantaged backgrounds, so those courses are essential to providing young people with the skills that they will need in a wide variety of sectors, including construction, engineering and health. Those funds would not be taxed in the same way if they were spent on schools, which, as my right hon. Friend the Member for Camborne and Redruth outlined, may similarly provide education for 16 to 19-year-olds on a range of subjects.
As my right hon. Friend will know from discussions in our previous roles, the skills that we are talking about are often those over which there is a debate about the balance between immigration and domestic supply. It is vital that we look to fill more of these skills gaps domestically, and ensure that colleges can step up and provide that training. He touched on his training in arc welding. For many jobs in which there are skills shortages across the economy, it is colleges that will be training people to meet that skills demand, so that they can then access the rewarding salary packages and careers that often come with them.
The impact on South Devon College is clear. Unlike Torbay’s schools or others in the public sector, South Devon College pays VAT that it cannot claim back, which gives it an immediate 20% disadvantage in spending power compared with a school. This becomes even more odd when we consider that South Devon College has South Devon High School within it. South Devon College’s non-pay spending each year is approximately £15 million, including VAT, so if it could reclaim the applicable VAT, it would have in the region of another £1 million to £2 million each year to invest directly in education, skills and training. That would obviously make a significant contribution to what the college can offer its students and the wider community that it serves across Torbay and south Devon.
Given the impact on South Devon College, I would be interested to hear the Minister’s thoughts on a few specific points. First, what assessment have the Government made of the financial impact on the further education sector of not being able to reclaim VAT? Secondly, why was that not changed during the reclassification of organisations as public sector organisations in November 2022? It would be a simple decision for Government to amend the Value Added Tax Act 1994, so that colleges such as South Devon College were included in the refund scheme, in the same way that previous Governments extended the refund rules to cover academies, national museums and various new regulatory bodies. The position of colleges seems even more odd when we consider the decisions taken previously. This is a logical step to take that will boost vital skills training and help provide the opportunities that our next generation needs, so I hope that this decision can be taken very quickly.
It is a pleasure to serve under your chairmanship, Mr Betts. I thank the right hon. Member for Camborne and Redruth (George Eustice) for securing this important debate. I think we all want an active, high-skill economy that further education colleges play a leading role in developing, not just in his constituency and south-east England, but across the UK.
I start by talking about some of the general issues we have experienced in Scotland with regard to VAT. The SNP’s 2021 manifesto said:
“A re-elected SNP Government will use the fiscal framework review to push for an urgent increase to Holyrood’s devolved financial powers, including…Strengthening…Scotland’s tax powers with the devolution of VAT, and full powers over income tax and National Insurance contributions.”
I can imagine Treasury Ministers squirming at that potential change in taxation across the UK. VAT is a huge part of the UK’s tax income, and it is forecast to raise £162 billion in this financial year. Only income tax and national insurance contributions raise more; income tax accounts for £268 billion, and the three represent two thirds of total tax receipts across the UK. We are talking about massive sums of money. Compared with the massive income that comes in through VAT, the right hon. Member for Camborne and Redruth is asking for a tiny speck of financial support for FE colleges.
The Office for Budget Responsibility notes that around half of household expenditure is subject to VAT at the 20% rate, and around 3% of expenditure is subject to the 5% rate. Although public bodies may account for VAT on supplies, goods and services, like any other business, they often make the point that their non-business activities can be outwith the scope of VAT.
HMRC’s guidance for local authorities and other public bodies says that the general rule is:
“where a public body is funded by way of public expenditure…to do something for the public good, it’s unlikely to be engaging in business activities for VAT purposes.”
That definition should include FE colleges, as the right hon. Member for Camborne and Redruth has said. Public bodies such as Government Departments, non-departmental public bodies, NHS bodies, local government, the police and fire and rescue services should all fall within that scope. VAT incurred in the course of non-business activities is not generally recoverable, although special provision is made for local authorities and certain other specified bodies to recover that VAT. I believe that what the right hon. Member is promoting this morning fits with Treasury rules. It even fits with previous EU rules. Indeed, VAT was introduced under the auspices of the European Commission, and public bodies are generally not regarded as taxable persons under EU VAT law for most of their activities.
When it comes to VAT on FE colleges, we in Scotland feel the pain of the right hon. Member for Camborne and Redruth. The Tories’ dreadful and shameful treatment of Police Scotland and Scottish fire and rescue services cannot be forgotten. In 2011, the Scottish Tories campaigned to unify the police forces into a single force, supporting SNP policy at the time. However, after that happened, the UK Treasury refused to extend to Scotland’s police service, operating under its new name, the same VAT exemptions that it had had for many years prior to the change. The same was true when Scottish fire and rescue services were amalgamated into a single body. Despite emergency services in England having relief from VAT, the UK Government failed to deliver the same relief for Police Scotland and the Scottish Fire and Rescue Service. That cost Scottish taxpayers more than £175 million over five years.
In 2013, when the services were formed, right through to 2017 when the then Chancellor of the Exchequer, Philip Hammond, finally caved in, in the Budget, those emergency services paid around £170 million in VAT. Maybe this Minister and this Chancellor can also cave in and give that right to England’s FE colleges.
Many hon. Members from across the House will remember my former colleague Roger Mullin, who campaigned on this throughout his time in Parliament. It is a shame that there was not immediate action from the UK Government to make sure that the Scottish Fire and Rescue Service and Police Scotland were not disadvantaged. However, it has to be said that 318 Tory MPs, including the right hon. Member for Camborne and Redruth, voted on 26 October 2015 against Roger’s amendment to remove VAT from those vital services in Scotland. I regard that as a shameful act. We had to find £170 million in the Scottish budget to make up the difference. That shows that we got through and won the argument eventually, and that SNP MPs stand up for Scotland. Perhaps something similar can be said of the right hon. and hon. Members with us today from the Conservative party: they are standing up for England’s FE colleges.
The controls that Westminster retains over devolution are still quite strong. We cannot know with certainty that future decisions will not disadvantage Scotland again. For example, we do not know whether the national care service, which is being introduced in Scotland as we speak, will be VAT-exempt. I hope we get clarity from the Minister this morning on that.
The right hon. Member for Camborne and Redruth talks about the FE sector, and the uneven playing field when it comes to VAT. We in Scotland could say, “Welcome to our world,” because we have lots of experience of that. I have great sympathy with his arguments. As I said at the start, FE colleges support skills, young people, small and medium-sized enterprises and, above all, exports. Those are areas we cannot ignore. We should try to give FE colleges every single advantage that we can, so that they can train more people, and work more closely with small businesses across different parts of the country. FE colleges are a critical building block of successful high-skill economies. I hope that the Minister will support the right hon. Member’s ambitions, and also ensure that VAT is devolved from the Treasury to other Parliaments across the UK.
It is a pleasure to serve under your chairship, Mr Betts. I congratulate the right hon. Member for Camborne and Redruth (George Eustice) on securing the debate, and raising the issue of the important role that further education colleges play in training the workforce of the future, and upskilling the existing workforce.
I am happy to be here on behalf of the Opposition. I thank hon. Members for their contributions to today’s debate, particularly the hon. Member for Torbay (Kevin Foster), and my hon. Friend the Member for Cambridge (Daniel Zeichner). We have heard today about the role that further education plays in the lives of constituents, and the challenges they face, such as the struggle to recruit staff. As the right hon. Member for Camborne and Redruth has explained, section 33 of the Value Added Tax Act 1994 specifies that special provision is made for local authorities and specified bodies to recover VAT incurred on goods and services purchased in relation to non-business activities. The section sets out a list of public bodies eligible to recover VAT, which the Treasury can amend via secondary legislation. Guidance from HMRC says:
“Treasury will consider applications from bodies that meet both the following criteria—the body must undertake a function ordinarily carried on by local government and have the power to draw its funding directly from local taxation.”
I note that last October, the Office for National Statistics deemed that further education colleges should be public bodies. That is the basis of the right hon. Gentleman’s case that further education colleges should be added to the section 33 list. That will allow them to reclaim the VAT that they are charged in the same way that schools can.
This is a very topical debate, and real concerns have been raised about the financial stability of further education colleges. FE college funding fell by 27% in real terms between 2010 and 2019. In that same period, growth stalled, wages fell and prices rose. That has meant that the cost of everybody’s inputs, from energy to textbooks, have become more burdensome and unmanageable, and things have grown more difficult for colleges across the country.
One of Labour’s missions for government is to break down the barriers to opportunity for every young person. We are determined that every child and young person should have access to excellent education, so that the opportunities open up to help them thrive. Thirteen years of Conservative failure have weakened our education system, meaning that all too often young people are held back, unable to fulfil their potential. With our green prosperity plan, we will make Britain a world leader in the industries of the future and ensure that people have the skills to benefit from opportunities. Institutions such as FE colleges can play a vital role in that endeavour.
As the world’s economy changes, Britain needs to grasp opportunities to get ahead in the race, and we need to give British people the tools and skills they need to succeed. As I have laid out, the Labour party believes very strongly in the role of skills, and believes that FE colleges are key to getting Britain growing. We want the education system improved, and we want skills provision updated for a modern economy.
The right hon. Gentleman has raised important matters in this debate. The Labour party will evaluate the situation properly before putting any proposal forward. I look forward to the Minister’s response. It is really important to hear from the Government on this issue, and I hope she will address the points raised by the right hon. Member for Camborne and Redruth.
It is a pleasure to serve under your chairmanship, Mr Betts. I thank my right hon. Friend the Member for Camborne and Redruth (George Eustice) for securing today’s debate; I know his great personal commitment to the issue. I was extremely interested in his description of how officials from his former Department viewed meetings with Treasury officials—I do not know whether that is a badge of pride for the Treasury or whether we should take some learning from it.
We are a nation that takes enormous pride in its education system, and rightly so. May I take this opportunity to celebrate the news, which we heard yesterday, that England has risen up the international league tables and is fourth in the world for progress in literacy? That is an extraordinary achievement that has been made possible by the intense concentration that the Government have put on phonics and on driving up standards in schools. It is right that we applaud the teaching sector and everybody else involved in education for their significant achievements, and the students themselves for working so hard.
I note the constructive way in which the SNP has contributed to this debate. I genuinely hope that Scotland will be able to join us in rising up the league table in due course, because we know that sadly it is not there yet. However, I am sure we will have many more discussions about standards of education in Scotland.
Students from around the world flock to our schools, universities and institutions of learning throughout the country, where they have a tremendous diversity of subjects to study and people to meet. For example, a pupil from a disadvantaged background is something like 83% more likely to go to university now than they would have been in 2010-11, because we have put the expansion of life chances at the heart of our education programme.
The further education sector has a huge role to play in preparing young people for university, and indeed for whatever life they wish to live as they leave their teenage years behind. That is an important distinction to make, because the education structure that we have known for decades has undergone significant change in recent years. We now have vocational study, T-levels, technical colleges, academies, state schools, independent schools and free schools all catering to the unique needs of young people and our local communities.
Of course, further education can continue through one’s career when one leaves formal education. I had the great pleasure of visiting Brompton Bikes recently. I saw not just that it had taken advantage of the Government’s super deduction and capital allowance schemes in recent years, but that it was doing wonderful work to train its workforce at various stages of workers’ careers. That has an enormous benefit not just for the individual’s career path but for the business.
I am pleased to be having this discussion with hon. Members today. We want to support the FE sector and ensure that it continues to be able to cater for people’s various needs. If I may, however, I will take a step back, because although our focus today is on a particular provision in the Value Added Tax Act, it is important to look at investment in the FE sector over recent years. We have invested £300 million before the end of the previous financial year to eliminate the current deficit in funding experienced by March each year. That completes a move to a more even profile of funding that better matches the needs of FE colleges, recognising the challenging environment that the sector faces. We have also provided an additional £150 million allocation of capital grant funding in this financial year to support and protect colleges that are planning to invest in their infrastructure or estate.
We have made other changes, including opening a new college capital loan scheme and allowing colleges to continue to retain surpluses and proceeds from asset sales. At the most recent spending review, we announced large-scale investment in skills, including funding to increase the average hours funded in 16-to-19 education by an additional 40 hours per pupil per year, bringing us closer to high-performing countries such as Sweden. We have also committed to increased capital funding in FE, including £1 billion over the spending review period to transform the FE college estate.
All that funding is, of course, welcome—indeed, Cornwall College would acknowledge that it has had a very good capital investment settlement—but the real problem is not the capital departmental expenditure limit. Welcome though it is, there is no point in colleges having that capital if they cannot afford to recruit the lecturers and teaching staff to run the courses. The increase in budget to extend the hours of teaching is also welcome, but it still does not address the core problem of the difficulty that colleges are having in properly funding, recruiting and retaining staff to run the courses.
If I may, I shall develop my argument. I have taken careful note of the issues raised by my right hon. Friend, and I hope to respond to them through the rest of my speech.
Let me give a little overview of VAT. I think it is fair to say that VAT is the most complicated area of tax law, which itself is pretty complicated, to put it mildly. I have a whole team of very erudite experts who advise me on all aspects of VAT. It is charged on most goods and services. Taxable businesses can recover the VAT cost on their inputs, but public bodies, which generally engage in non-business activity, cannot. That is why there are several VAT refund schemes in the Value Added Tax Act 1994 that allow some public bodies to recover, to differing degrees, the VAT on goods and services purchased in the course of non-business activities. Section 33, to which my right hon. Friend alluded, provides a scheme that allows local authorities and similar public bodies to recover the VAT incurred on purchases of goods and services relating to their statutory non-business activities. Its rationale is to prevent VAT costs from falling as a burden on local taxation.
Funding for maintained schools is channelled via local authorities, which benefit from the scheme. We allow academies to recover their VAT through section 33B, which we introduced in April 2011 to ensure that academies were not disincentivised from leaving local authority control. The hon. Member for Cambridge (Daniel Zeichner), who is no longer in his place, intervened on my right hon. Friend the Member for Camborne and Redruth, but I was not clear whether he was supporting academies or was agin them. We are certainly very proud of the academy system and the benefits that it provides to our education system. Again, that is a point of contrast between the parties.
Sixth-form colleges and FE colleges are not included in the section 33 or section 33B refund schemes as they do not fit the rationale for either, which is to protect local taxation or encourage academisation. Like many other providers of public services, FE colleges and sixth-form colleges are expected to cover their VAT costs from their funding allocations. Sixth-form colleges have the choice to restructure as academies, enabling the recovery of VAT under the refund scheme, but many choose not to. That is their decision.
My right hon. Friend raised the comparison with a school that has a sixth form. More widely, FE colleges are different from schools and academies in that they provide a range of different services for a broader range of students. In my constituency, Boston College is moving into Horncastle, and we are very excited about it. I fully hope and expect that it will offer a range of services not only to 16 to 19-year-olds, but to a wider field of people. Because FE colleges have a different, more autonomous way of operating, they benefit as eligible bodies from an advantageous VAT exemption when competing with commercial providers of higher levels of training. That is a difference.
I think I understand my hon. Friend’s argument, but I am not sure that it is a very persuasive one, since academies are independent for all intents and purposes. They run their own ship. They are not funded out of local taxation—if that were the objective of section 33, we would not have protected academies in that way, as they are funded directly by central Government grant. The ONS has effectively now said that FE colleges are public bodies. I really do not see the difference between an independent academy, funded by central grant, and an FE college that is also funded through central Government funding.
We have to be a little careful about the ONS argument. The ONS has many attributes, but it is the Office for National Statistics; the eligibility for VAT refunds is not related to ONS classification. There are a number of public bodies and publicly funded activities that make significant contributions to our lives but are not eligible for VAT refunds, such as the Bank of England or university research grants. We are hoping to encourage even more university research with some of the measures set out in the Chancellor’s Budget, including through investment zones, but these are not eligible for VAT refunds. These colleges have never been eligible for refunds, regardless of their classification by the ONS. Where public bodies cannot recover VAT, we provide overall funding with the irrecoverable VAT in mind.
My hon. Friends the Members for Torbay (Kevin Foster) and for Harwich and North Essex (Sir Bernard Jenkin) asked for an estimate of the cost of allowing FE colleges to join the section 33 scheme. The estimate is £200 million a year, which is a significant sum. As I always find myself saying when I am at the Dispatch Box or the lectern, there is a balancing act. We have to look at these extremely large numbers in a whole variety of areas, particularly VAT: I am asked frequently by colleagues to move something out of the VAT scheme, but we have to look at the figures.
It was interesting that when my right hon. Friend the Member for Camborne and Redruth asked the shadow Minister, the hon. Member for Erith and Thamesmead (Abena Oppong-Asare), whether Labour would commit to adding FE colleges to the section 33 scheme, she did not commit. We all recognise that there is a significant cost, but those are the figures that we have to work with. We know, because we believe fundamentally in sound money, that if we allocate £200 million to this scheme, we will have to find that £200 million from elsewhere in our vital public spending priorities such as the schools budget.
The Minister is being very generous in accepting my interventions. As you have said, Mr Betts, we have plenty of time, and sometimes these sorts of discussion are better had via intervention.
I want to return to the point about the ONS classification exercise. In most other fields of Government policy, in other Departments, the Treasury allows the ONS tail to wag the Government dog. For example, the ONS has a view about how the Flood Re scheme should be treated in the public accounts; as a result, the Treasury insists on the Department for Environment, Food and Rural Affairs applying all sorts of public sector restrictions, including salary restrictions, to the way it operates. We have seen a similar approach to the Agriculture and Horticulture Development Board and the extended producer responsibility scheme.
With all those schemes, when the ONS says, “These are public bodies,” the Treasury is first in line to tell the Department, “You must now change your behaviour, change your laws and change your approach as a result.” That is what it says to other Government Departments, so what is different here? Now that the ONS has confirmed that FE colleges are a public body, should the Treasury not bring them in line with academies, schools and local authorities?
I hope my right hon. Friend will forgive me, but I do not have an intimate knowledge of the treatment of the bodies that he describes. I respect the fact that as a former Secretary of State he knows a lot about those schemes. I do, however, hear him kicking back against the seeming power of public bodies or of those who have a role in our national life in ensuring that statistics, budgets and so on are certified and scrutinised. If he is complaining about that power, I am not sure that that is an argument for extending it.
I think what I am trying to say is that it would be a legitimate approach for the Government to say, “We are going to disempower the ONS. It is out of control. It is doing all sorts of things that cause chaos with Government policy and is driving a coach and horses through it. We are not going to allow this to go on, and we will pass emergency legislation to overrule it.” However, in the absence of that—and I have only ever detected intense reverence for the ONS in the Minister’s Department—she has to fall in line with what the ONS says. I think that that requires her to bring FE colleges into line with academies.
For the sake of avoiding any headlines, I do not agree with or accept my right hon. Friend’s description of the ONS. As I said, I appreciate that he has a particular set of experiences with ONS classifications; I do not know whether that is replicated in other Departments. I gently point to the range of public bodies that do not have VAT refunds or VAT exemptions, even though they have publicly funded activities. I am not sure that I can improve on that point. If it was not right when he was in the role, I am not sure we should be replicating that on his account going forward.
On the estimated cost, as I say, we know that there will be an impact elsewhere in the Budget, but it is the Department for Education and the Secretary of State for Education who make those decisions. I must not trespass on that Department’s funding decisions, but the funding that we provide does bear in mind the VAT issue.
On VAT, I mentioned that colleagues have a great many helpful suggestions as to how we could improve the VAT scheme. I have had this debate at least once or twice in Westminster Hall already, but we have had requests for more than £50 billion-worth of relief from VAT since the EU referendum. I know colleagues feel passionately about each and every request, but sadly the job of Treasury and of Ministers is to ensure that we keep our tax base in place because, of course, we have to pay for the services we care so much about.
I have very much enjoyed the debate, but I regret to inform my right hon. Friend the Member for Camborne and Redruth that at the moment we have no plans to make changes here. We will, of course, keep the matter under review. He has raised some important points that I will take away and mull over. I thank him for this debate.
As the Chair, I obviously have to be scrupulously independent in these debates, but I just have to say that Angela Foulkes, the principal of the Sheffield College, wrote to me to draw my attention to this issue. I said that I was chairing the debate and could not contribute, and I am not going to.
I thank all hon. Members for attending the debate. I appreciate that at 9.30 am on a Wednesday, the subject of the debate—public bodies and VAT—might have felt daunting for many. As the Minister herself said, tax is complicated and VAT is the most complicated part of tax.
I thank everybody for contributing to the discussion. In particular, I am grateful for the support that I received from my hon. Friend the Member for Torbay (Kevin Foster), and for the supportive interventions from my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) and my right hon. Friend the Member for Chelmsford (Vicky Ford). As a former Minister in the Department for Education, she knows about the issue; it was great to have her support. There were also very good contributions from all the Front Benchers.
A parting thought: the Minister says that it is important for the Treasury to protect its tax base and that that is why it is reluctant to make changes. We all understand the importance of balancing the books and protecting the tax base, but in doing so the Government and the Treasury must seek to have fairness and consistency. My point today is there is an inconsistency. If the Treasury wanted to raise taxes somewhere else and then bring consistency to the VAT system, we would all understand and appreciate that by all means.
This debate will conclude early. The really good thing about debates that conclude early, when you are a Minister, is that they mean a whole half-hour with nothing in the diary. I used to find that when debates wrapped up early, rather than rushing off to the next thing, it was sometimes quite useful to have half an hour to give instructions to the officials—they are currently sat behind my right hon. Friend—about further work in the area. I hope that she will take up that opportunity.
Question put and agreed to.
That this House has considered public bodies and VAT.
Future of Stoma Care
I beg to move,
That this House has considered the future of stoma care.
It is an honour to serve under your chairmanship, Mr Betts. In July last year, I hosted a truly inspirational event called Stomas in Parliament, which welcomed participants in a unique relay race from a London hospital to Parliament. For colleagues who might be unaware, a stoma is an opening on the abdomen that can be connected to either the digestive or the urinary system to allow waste to be diverted from the body. The race was led by people of all ages who have a stoma, including a seven-year-old girl called Jessica, and other members of the stoma community, such as incredible nurses and charities, and suppliers of stoma services and products, as well as my hon. Friend the Member for Peterborough (Paul Bristow). Sadly, I did not and do not have the legs for such running, but the event was a symbolic display of the activities that people with a stoma can do when they receive high-quality care and support. I am delighted to see representatives here today. Thank you so much for coming.
The purpose of the race was to deliver a “calls to action” statement, which was passed to me in Victoria Tower Gardens, just outside Parliament. The statement was developed by people with stomas, and it sets out the improvements needed to ensure that everyone with a stoma has access to optimal care so that they can live their life to the full. It was good to see people doing that, but sadly many individuals still receive suboptimal care, which has a significant impact on their quality of life, including their ability to work, as well as placing additional pressure on the NHS through potentially avoidable GP or nurse appointments and emergency admissions.
I thank the hon. Gentleman for making such a powerful and significant speech to open the debate. I had a stoma in my late 20s, so I understand and recognise the significance of having great care. Does he agree that much more needs to be done to ensure that people get the care and support they need when they have a stoma?
The hon. Lady is absolutely right. This is the message I intend to deliver today: we need more care, and we need to get it right and give it at the right time to the right people. This is about individual cases, as I shall touch on later.
Complications with a stoma can include leakage, which in turn can lead to painful skin rashes, unpleasant odour and isolation, all of which can lead to career and relationship difficulties. I admit that before I was approached about taking part in the Stomas in Parliament event, I had little knowledge or understanding of stomas, or of how many people of all ages across the country are living with stomas. In my Clacton constituency, there are at least 300 people living with a stoma. In the UK, there are between 165,000 and 205,000 people living with a stoma.
People with a stoma face many physical and emotional challenges in their post-surgery life. However, access to specialist stoma care is highly variable across the health system. In addition, such intimate healthcare conditions are often stigmatised and under-prioritised. That leaves too many people suffering in silence, which should not happen.
As I have learned more from people with intimate healthcare needs, I have realised that patient choice and shared decision making are essential. I have with me a fantastic prosthetic, which gives some idea of what a stoma looks and feels like. People live with the condition day in, day out. Unless people are users of particular stoma care services or products, they will not realise how transformative such positive treatment can be.
That message came across strongly during the Stomas in Parliament event. The attendees gave me a strong understanding of how important personal appliance choice is, and needs to be, to help people to live their life to the full. Of course, everybody is different and bodies change over time, which means that getting the right stoma appliance is vital. I hope my hon. Friend the Minister will commit to ensuring that people living with stomas are able to access the right products for them at the right time. I know that work is continuing on the next stage of the Department’s medtech strategy.
The formation of a stoma is a lifesaving procedure for many, but it also produces difficulties. More needs to be done to address those difficulties, and providing equitable access to defined specialist pathways will improve the consistency and quality of care and patient outcomes. Getting that right will support the NHS prevention and self-care agendas while reducing pressure on emergency hospital services and, in the long run, saving the NHS money.
Great work on patient pathways is under way in the stoma community. Just this month, the Getting It Right First Time programme was formed. It is led by the industry and joined by the charities and the surgery lead for the NHS, and its work includes applying an NHS Getting It Right First Time approach. As part of that much-needed work, the group will be undertaking a national audit and developing a best practice and evidence-based stoma care pathway to address the postcode lottery of stoma care, ensure long-term, follow-up services and ensure equity of access to care.
I wish to mention that I have spoken separately with Crohn’s and Colitis UK, which is the leading charity for the 500,000 people affected by Crohn’s and colitis in the UK; I have with me a briefing note from the charity, which I will be happy to share with colleagues. I have also received representations from the Urostomy Association, which has asked me to highlight, regarding the choice of equipment, that one size does not fit all: we need the choice of a variety of products from different companies. In some cases, people can have serious skin issues with a particular type of adhesive used by one company and may therefore need to change suppliers.
I turn to the issue of access to a specialist care stoma nurse. Ideally, annual checks with a stoma nurse would be useful, but in the main that is not possible. Some people with a stoma may rarely need to see a nurse, but others may have constant leakage problems and would benefit from more regular specialist nursing advice. Finally, GP surgeries are required to approve prescriptions for stoma supplies but have been known to delete items requested on a cost basis, not realising that doing so will cause suffering for patients.
I turn to my asks of the Minister. First, I would be most grateful if he committed to a meeting with me and the Stomas in Parliament organisers, Colostomy UK, the Urostomy Association, the Ileostomy and Internal Pouch Association, and Coloplast UK, to discuss the calls to action and the possible impacts of the medtech strategy on stoma.
Secondly, many people in the stoma community and the industry are concerned that the UK is sleepwalking into a position in which our science medtech industry is so stretched that it is seriously considering not having the UK as a primary market for research and development investment. Will the Minister commit to discussing those issues with me and the stoma community?
Finally, will the Minister commit to meeting the group working on the first NHS Getting It Right First Time stoma care pathway and ensure equitable care in the UK for every person with a stoma?
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Clacton (Giles Watling), my near neighbour, on securing this important debate. He is a tireless advocate for his constituents and for patients across the country who suffer from conditions such as bowel cancer. They are fortunate to have him as their advocate.
Let me start by touching on the importance of reducing stigma. Stoma care is a topic that not everyone feels comfortable talking about, and as a Minister at the Department for Health and Social Care I want to play my part in reducing the stigma around living with a stoma. I hope that this debate and the event to which my hon. Friend referred will play some part in encouraging people to talk more about stomas and to come forward for services such as bowel cancer screening. I am hugely grateful to him for the opportunity to discuss this important issue in Parliament.
We know how important prevention and early detection are to health. Bowel cancer screening is available to everyone in England aged 60 to 74, and since 2021 we have been expanding the screening offer in England to younger patients so that everyone aged 50 to 59 will be included by 2025. We also know that the early proactive management of bowel disease is far better for patients, as my hon. Friend rightly pointed out. In many cases, it will reduce the amount of surgery resulting from stomas.
My hon. Friend referred to patient choice and the differing quality of stoma products. I know how important patient choice is, not just in this area but in so many areas across our NHS. I also know—my hon. Friend put this point eloquently and articulately—that one stoma product does not always work for all patients, which is why it is so important that there is patient choice. I recognise that having the right stoma product to support patients’ quality of life is as important as the medical need itself. My hon. Friend raised a serious point about general practitioners deleting items; I will ask my officials in the Department to investigate that point and write to him.
I am grateful for the opportunity to update the House on the levels of NHS spend. Current NHS expenditure in this field is about £350 million every year, which is predominantly used to provide stoma products to patients. Over 9,500 different stoma products are available on the NHS, and these products are prescribed to patients under part IX of the drug tariff. I am pleased to remind colleagues that one area of focus in our inaugural medtech strategy published in February this year, which has been widely and largely welcomed by industry, is medical devices used in the community, which include prescribed stoma products.
We have a stoma products consultation, which I will touch on, and the Department of Health and Social Care is leading a piece of work to review how the tariff operates in order to ensure that appropriate and effective products are prescribed to patients. I acknowledge that it is currently difficult to know the position and to compare the differences between products on the drug tariff. We will work to make things as transparent as possible so that clinicians are far better informed and can provide the right product for each and every individual patient.
We will also continue to support the provision of a range of stoma products through part IX of the drug tariff to ensure equitable access for patients, an issue that my hon. Friend touched on. We do not want a postcode lottery. I want to make sure that patients, regardless of where in the country they live, have a voice in determining the product range available on the tariff, so that the interests of patients are at the heart of how the tariff operates.
I thank the Minister for responding to the questions that have been asked. When the Government are looking to purchase products for people who have a stoma, will there be some consultation with patients so that they can help to make a decision as to the types of product that they feel will work for them?
I thank the hon. Lady for her intervention and for sharing her personal experience, which is a hugely valuable part of this debate. As I have said, a large number of products are already available on the NHS. She is absolutely right to say that we should engage with patients, because product selection should always be based on the clinical need of individual patients, not on manufacturing brand, pressure from particular companies or relationships with individual trusts. Yes, patients will be at the heart of the decision-making process, and rightly so. We are currently engaging on that exact point with a number of patient groups and with the industry, which is an important part of this as well. We will launch a targeted consultation over the summer, and I encourage patients, charities, organisations and industry to take part; I think they naturally will. We must ensure that the tariff continues to provide effective products to patients, wherever they live in the country.
My hon. Friend the Member for Clacton touched on patient care. I, too, recognise that the patient pathway for stoma care differs depending on the model of care that commissioners have adopted, hence my reference to a postcode lottery. Stoma service delivery models have been supported nationally through past NHS initiatives such as the QIPP, the national quality, innovation, productivity and prevention programme—it is a mouthful —which published recommendations on best practice for delivering stoma services. There are already really good examples across the country, such as in Rotherham, Nottingham and the midlands, of stoma services being delivered effectively based on those fundamental principles. It is important that we share that best practice and ensure that it is rolled out across all the country’s integrated care systems.
I totally agree. It has to be based on clinical need and on the choice of the individual patient. However, when we look at the examples of the areas that do this really well and get those pathways so right, we can see that patients are followed up with regularly, receive annual reviews and have a wide range and choice of products. As my hon. Friend rightly points out, it is based on independent clinical advice on the best product for their need that they know best suits them as a patient. That is the exemplar, if you like—the model that we want to see across the country.
My hon. Friend talked about medtech and research and development investment in life sciences, a passion of mine. Colleagues may previously have heard me speaking about the Department’s work to ensure that the UK has a flourishing life sciences sector with a focus on innovation. I want to make sure that we always bring the best possible medtech, medicines and therapies to UK patients as quickly as possible.
The Medicines and Healthcare products Regulatory Agency is currently updating the medical devices regulatory regime, which is designed to support innovation and improve patient access to innovative medical devices by improving the regulation of novel and growing areas such as artificial intelligence, which we know will play such a big role. The medtech strategy is a meaty document, but I recommend that hon. Members look at it: it sets out a clear ambition to provide a streamlined pathway from pre-registration products through, ultimately, to adoption within the NHS.
My hon. Friend is right to say that we must work with industry to make sure that the UK is its launch platform or country of choice, because we want UK patients to be the very first to get access to the most cutting-edge and innovative medtech. We work closely with industry and across the system to implement actions to address the barriers to adoption in the UK. That predominantly involves removing duplicative evaluations to ensure that procurement processes are as streamlined as possible for companies, thus making the UK a best-in-class destination.
The medtech community is a key focus area for implementation of the strategy. As part of my Department’s engagement with industry and patient groups on its upcoming consultation on part IX of the drug tariff, officials have planned various roundtables and engagement points with stakeholders. That engagement will include industry and patients, which speaks to the point that the hon. Member for Lewisham East (Janet Daby) made about the importance of putting the patient voice at the heart of everything we do. As my hon. Friend the Member for Clacton knows, the Government’s medtech strategy sets out how we will ensure that the health and social care system can reliably access safe, effective and innovative medical devices. I am pleased to assure my hon. Friend that it is absolutely a priority for me, for the Department and for the Government.
I thank my hon. Friend the Member for Clacton and the hon. Member for Lewisham East once again for bringing this issue to the Government’s attention and for flagging particular areas. I look forward to continuing to work with charities and hon. Members across the House on the matter. Finally, on my hon. Friend’s most significant ask, I would be absolutely delighted to meet him, charities and Coloplast to take this forward.
Question put and agreed to.
Eye Health: National Strategy
[Carolyn Harris in the Chair]
I beg to move,
That this House has considered the potential merits of a national eye health strategy.
It is an absolute pleasure to serve under your chairmanship, Mrs Harris, and I am pleased to have secured today’s debate. Let me begin by placing on the record my thanks to the many organisations that have sent through their briefings and shared their knowledge and expertise, including the Association of Optometrists, the Royal College of Ophthalmologists, Specsavers, SeeAbility and the Royal National Institute of Blind People, which have all supported my National Eye Health Strategy Bill as well.
There is no question but that we need the Government to introduce an eye health strategy in England, because there is an emergency in eye care. Huge backlogs, which were apparent before the pandemic, are leading to people unnecessarily losing their sight. The annual economic cost of sight loss is currently estimated at £37.7 billion. An estimated 2 million people are living with sight loss in the UK, and anyone can be affected by it. As Members, we will all have constituents who have been or are being affected, because 250 people begin to lose their sight every day, with a shocking 21 people a week losing their vision due to a preventable cause. On top of that, we know that 50% of all sight loss is avoidable. We should all be asking why so many people are needlessly losing their sight or going blind.
The backlog for ophthalmology appointments in England is one of the largest in the NHS, with over 630,000 people on waiting lists as of 23 March this year—more than 9% of the total backlog. Ophthalmology has been the busiest NHS out-patient clinic for the last three years, with 7.5 million hospital attendances in England in 2021-22. It is shocking that eye care accounts for only 2.6% of NHS consultants and 1% of the total number of doctors.
I congratulate my hon. Friend on securing this really important debate. She is making a significant point about capacity. Does she agree that there is a need to ensure that the long-awaited workforce plan the Government have promised pays proper attention to this area of specialism and takes account of the need to train more people as part of the provision being made for additional medical training?
I thank my hon. Friend for his intervention, and he is absolutely spot on. I will come to the workforce plan and the Government’s expectations, but he is absolutely right that it must include this specialism. There must also be an element of training and upskilling.
I, too, congratulate my hon. Friend on securing such a significant debate. I recently visited Greenvale School in my constituency, which is a school for children with special educational needs and disabilities. It is one of the schools involved in the initial roll-out of the special school eye care service, and I have met the ophthalmologists, who do absolutely brilliant work. Does my hon. Friend agree that if the Government end this service in the summer they will be neglecting children’s eye care, and a huge responsibility and onus will be placed on families?
My hon. Friend makes a really crucial point about special schools and about ensuring there is enough capacity to support children who have complex needs with sight loss. What is really troubling is that, in many instances, sight loss is not always picked up, so having specialist ophthalmologists in schools is crucial. There absolutely should be no way of reducing that provision—in fact, we need to build capacity.
To respond to the current crisis in eye healthcare, the Government must commit to a national eye health strategy for England, as set out in my Bill. The strategy would include measures to improve eye health outcomes, remove the postcode lottery of care, reduce waiting times, improve patient experiences, increase the capacity and skills of the workforce, and make more effective use of data, research and innovation. An eye strategy would ensure that, regardless of where someone lives, they can have access to good-quality eye healthcare, which would address eye health inequalities and ensure that there is more equity of access to eye care among different communities and people who are more at risk of sight problems but who may not be accessing NHS sight tests.
I thank my hon. Friend for making such an important speech. I pay tribute to the staff in the eye health department at St Thomas’s Hospital in my constituency. Figures show that 650,000 people are on waiting lists in England and that 37% have waited for more than 18 weeks. If the Government had a strategy, would that not address the postcode lottery my hon. Friend highlighted?
I thank my hon. Friend, who highlights the fantastic eye care department at St Thomas’s Hospital. She is absolutely right: my strategy already sets out how to address the backlogs in eye healthcare, and the Government could just say, “Yes, we are going to take it on, reduce those backlogs and address the workforce issues.”
Ensuring that we have equity of eye health must also include people who are homeless and those with learning disabilities, as my hon. Friend the Member for Lewisham East (Janet Daby) mentioned. A strategy would focus on five areas. The first is the eye health and sight loss pathway, which outlines the care and support for those diagnosed with loss of vision. A pathway would focus on the physical and emotional impact of being diagnosed with sight loss. Research has shown that blind and partially sighted people are likely to experience poor mental health outcomes, such as depression and anxiety, in their lifetimes. As part of the pathway, more emphasis should be placed on the provision of non-clinical community support, which would complement the work of community optometrists, ophthalmologists in hospitals and rehabilitation officers. Where is the plan to improve non-clinical and community support as part of the eye health pathway?
The second area the strategy would aim to improve is collaboration between primary and secondary care, and it would emphasise integrated care systems to ensure timely and accurate referrals. Demand for eye care services is expected to increase by 40% over the next 20 years, so we need to pay more attention to joining up care to meet future demand. Some of the burden on hospitals from that increased demand could be eased through more investment in high street community optometrists and by changing the way services are commissioned, to make more use of resources and infrastructure in our communities.
Two million people attend NHS accident and emergency services each year with an injury to or disease of the eye, and over 65% of those cases could have been treated in primary care optometry, which is not only more accessible but saves money—it costs less. Despite that, only 23 out of the 42 integrated care boards commission a minor eye condition service, or MECS, consistently. Five have no MECS provision at all—patients must attend a hospital eye service either via their GP or A&E. That is unfair and inequitable, and it is a waste of NHS resources to have patients go to A&E when they could access something in the community, which is easier for the patient, improves outcomes and saves us money.
I thank my hon. Friend for giving way. Does she agree that the Government party claim to take care of the public purse, but in this case they are clearly not doing that at all? They are actually doing the opposite—wasting money from the public purse—because they are not making sure that the funds address the right issue.
Again, my hon. Friend makes an intervention that is 100% accurate. We obviously have to ensure that spending is done effectively and properly, and ensuring that resources are allocated in the community and alleviate pressures on hospitals will obviously lead only to better outcomes and savings.
At the most recent meeting of the all-party parliamentary group on eye health and visual impairment, ophthalmologist Dr Seema Verma from St Thomas’s Hospital spoke about the importance of MECS and locally commissioned optometry clinics in south-east London, which prevented 32% of referrals from being sent to hospital eye care services. If my hon. Friend the Member for Vauxhall (Florence Eshalomi) does not mind, I would very much like to invite the Minister to visit the eye department at St Thomas’s and the MECS community service, if he has not already done so.
Better joined-up care requires spending on infrastructure. Improved IT connectivity for two-way transfer of patient and clinical data would enable better patient care, and improved use of clinical skills and facilities in primary care, enabling more patients to be seen and treated closer to home. Everyone can get the theme here: community, community, community.
The eye care sector has been championing a single national electronic eye care referral system or EECR—there are so many acronyms—that would facilitate direct optometry to ophthalmology referrals, without people having to go through their GP. That would reduce the administrative burden on GP services, devolving some of the lower-risk cases to optometry and addressing unwarranted variations in referral and follow-up pathways.
I thank my hon. Friend for giving way again, and she really is making a powerful speech. She made the point about the single route of referral in that relationship between primary and secondary care. Does she recognise that that is not only better for patients but—reflecting the comment my hon. Friend the Member for Lewisham East (Janet Daby) made a moment ago—for the NHS, saving it an estimated £2 million a year?
That is exactly the point. Joining up services, which is what my Bill seeks to do, would essentially save the state money, which is crucial.
I have mentioned devolving services and supporting the pathway. When the Minister responds, will he provide an update on where the Government are up to in creating this referral and joined-up pathway system, or EECR, to be specific?
The third area of the strategy would be workforce expansion. There is a significantly uneven distribution of ophthalmology workforces across England, and a quarter of the profession is nearing retirement age. That is extremely concerning, because nearly 80% of eye care units already do not have enough consultants to meet current demand, with over 50% finding it more difficult to recruit for consultant vacancies. In the last year alone, 65% of units had to use locums to fill those consultant vacancies. What do the Government plan to do to respond to this workforce crisis? They say they are bringing forward their plan, but when will it be published?
At the APPG meeting in April, we addressed the challenges of the eye care workforce. Speakers from the Royal College of Ophthalmologists, the College of Optometrists and the Association of Optometrists all made strong recommendations and put forward credible solutions. Again, I would be happy to facilitate a meeting if the Minister is yet to meet those trade bodies. He would hear first hand their strong and credible recommendations, which seek to address some of the workforce challenges.
The Government must make better use of existing workforces while expanding capacity to meet future needs, including by adopting Labour’s call to double medical school places to 15,000 a year. That needs to be complemented with investment in training for wider eye care and multidisciplinary teams and with an expansion in the number of non-medical roles.
The fourth area would be health intelligence and data. For too long, population data has not been utilised effectively to pinpoint the location of need and the places where opportunities for change can be found. A strategy would solve that by focusing on robust data collection to inform decisions and improve the delivery of service. The UK has no national data to identify people at risk of sight loss. There is potentially a case for looking at how registration for the certificate of vision impairment system works to see whether it could be used to map out an evidence base to show where people with sight loss are living. The lack of data means there is likely to be unmet need in the system, with some people who experience visual impairment not being treated, and some developing conditions that could be avoided if they were treated earlier—as I said earlier, 50% of all sight loss is avoidable.
Without that data, we do not know whether public expenditure on eye health is meeting people’s needs, because that expenditure is not based on any evidence. Where there are still no treatments for certain conditions, the Government should increase spending on eye research, which gets a fraction of the investment it desperately needs. According to UK Research and Innovation, the Government, charities and other public bodies invested £1.4 billion in medical research in 2018, but only 1.5% of that was invested in eye research. To put that in context, only £9.60 was spent on research for each person affected by sight loss in the UK. That is worrying, given that 250 people begin to lose their vision every day.
The fifth area would be improving public awareness. As I said earlier, 2 million people each year turn up to A&E or try to get a GP appointment for a problem that could be dealt with by a community optometrist. A strategy would involve campaigns on the importance of maintaining good eye health, educating the public on the difference between eye screening and eye tests, and improving signposting to where people need to go for help.
England is the only country in the UK without an eye health strategy. Strategies can deliver positive outcomes, as has been the case in Scotland. In England, there are health strategies for other conditions, so why not for eyes? The benefits would transform lives, alleviate pressure on health services and reduce economic costs. Our goal should be to ensure that no one loses their sight unnecessarily. Most people in the Chamber know that I have a condition called nystagmus. I have been living with my sight loss all my life, but those who come to sight loss later in life face even more barriers and challenges.
I would like the Minister to address the following questions. He will get fed up of me saying this, but why will the Government not commit to an eye health strategy for England? Will they appoint a Minister—it could be this Minister—whose sole responsibility is eye healthcare? What are they doing to ensure that every integrated care board has a MECS and that their commissioning is consistent with that of the 23 that already have such services? Five ICBs have no form of MECS provision at all, so what will the Minister do to ensure there is consistency in our communities? When will the Government publish their overdue long-term workforce plan? Will there be a focus on ophthalmology? As I have highlighted, only 1.5% of the £1.4 billion going into medical research involves eyes, so will the Government increase spending on eye health research?
It is a pleasure to serve under your chairmanship, Mrs Harris. I congratulate my hon. Friend the Member for Battersea (Marsha De Cordova) on a stunning speech and securing a debate on such an important subject.
Visual impairment is, in many ways, illustrative of so many of the problems that the wider NHS faces, but it is often underacknowledged and goes unnoticed. The Minister responded to my Adjournment debate on Monday, when I went through a lot of documents from our local ICB and council on the NHS. I was scouring them for mention of eye disease, but it did not seem to be anywhere in them—it tends to fall off the radar.
My hon. Friend gave some powerful statistics. There are 2 million people living in this country with sight loss today, and it is expected to be 2.7 million people by 2030 and 4 million by 2050. There are 600,000 people with age-related macular degeneration. Every six minutes someone is told they are going blind, and every day 250 people start to lose their sight in the UK. Some of these problems are intrinsic to our health service, such as the lack of joined-up-ness that she talked about between primary and secondary care, the fact that services are a postcode lottery and the pre-existing backlogs that were worsened by covid.
With 11 million out-patient appointments a year, ophthalmology is the biggest out-patient speciality in the NHS, yet it is forgotten and is often a Cinderella service. Locally, diabetic eye disease, glaucoma and age-related macular degeneration are all big issues. In Ealing, type 2 diabetes is 3.5 times more prevalent among black, Asian and minority ethnic populations than the wider population. The level of diabetes is very high in our borough, at 8.4%, and it is even higher next door in Harrow, at 9.5%—nearly one in 10 people. Diabetic eye disease is a consequence of that, and it is sight-threatening, as my hon. Friend said.
The odd thing is that primary level optometry is private practice. Specsavers is the biggest provider in the country—it sent us all a briefing for the debate—and there is Boots. In Ealing, there are also great local independents such as Eyes on the Common and Hynes Optometrists. But there seems to be a mismatch with the eye hospitals. I was lucky enough to go to Central Middlesex Hospital recently and be shown around its eye department. I also went to the A&E at Western Eye Hospital last year when I had shingles, which was interesting to see. It was a very long wait of half a day on the weekend. They were very good, but I am sure we could join all these things up better, because there seems to be a disconnect for things such as referrals.
That is why I support and am a signatory to my hon. Friend’s private Member’s Bill, the National Eye Health Strategy Bill. Having a national eye strategy is crucial to reversing a situation that has seen eye care become a Cinderella service. It was a step forward when the first ever national clinical director for eye care, Louisa Wickham, was appointed last year, but unlike with other big issues—for example, I talked on Monday about mental health, dementia and cardiovascular issues—there is no national plan for eye care. It is hit and miss, as my hon. Friend says, and the lockdowns have exacerbated all the waiting lists.
I want to flag the work of my constituent, Judith Potts. For seven years, she has been a one-man band with her charity Esme’s Umbrella, looking at the unusual—actually, it is more prevalent than we think—Charles Bonnet syndrome. The disease affects people who are losing their sight, and they see vivid hallucinations of often quite specific images—they can be swirly patterns and shapes, and they can also be gargoyles, world war one soldiers or boys in sailor suits. When that was described to me, I had never heard anything like it. We have had two receptions just across from this Chamber, in the Jubilee Room, for Esme’s Umbrella, which is now becoming constituted as a proper charity.
It was Judith’s mother, Esme, who suffered from Charles Bonnet syndrome. Judith has managed to persuade the World Health Organisation to recognise it as a condition in the ICD-11—the eleventh edition of the “International Classification of Diseases”—but there is no training for it at medical school and it is seen as a side effect of sight loss. It is estimated that the number of people who suffer from the condition is in six figures—some estimates say there could be a million sufferers in this country—yet people do not even know what to google because it is so unheard of. There are no pathways, no magic pill that can make it disappear and most people have never heard of it. More research is needed to cure the condition and to help people cope with it. There is a job to be done.
“Coronation Street” has played a big role, with the actor Richard Hawley, who was at our last reception in the autumn—I think my hon. Friend the Member for Battersea was there as well—playing the character Johnny Connor, who is a sufferer. That has done something to put the condition on the map, but I appeal to the Minister to recognise Charles Bonnet syndrome as part of a comprehensive eye strategy. Proper research needs to be funded. The trustees of the Esme’s Umbrella charity, as it has now been constituted, are highly respected people from Great Ormond Street, Moorfields and the Francis Crick Institute. They are all top consultants, but as the condition is not a recognised thing, they have to do the research on the side. That is not satisfactory. We need to persuade people, take them with us and fund the proper research.
In March, the Health Service Journal reported on a survey carried out by the Royal College of Ophthalmologists, which found that independent providers—my hon. Friend referred to this too—are having a negative effect on patient care. I mentioned this on Monday, so I hope Members will forgive me if they have a sense of déjà vu. Patient choice sounds good and we have backlogs that need clearing, but the independent sector creams off all the stuff aimed at cutting the cataract waiting list, which is low-risk, routine work—and I have to say that those patients are usually from majority white populations—when it could do out-patient appointments or follow-ups too. The NHS is left with serious and costly cases of high complexity, in which patients—typically BAME ones, I have to say—are at risk of going blind.
The Royal College of Ophthalmologists found significant staff shortages in NHS ophthalmology capacity. That is set to worsen in coming years unless immediate action is taken. Seventy-six per cent.—over two thirds of NHS eye units in the UK—do not even have the consultants to meet current demand and 80% have become more reliant on non-medical or allied professionals in the past 12 months. The capacity is missing. The equation has gone all wrong. Twenty-five per cent. of consultants plan to leave the ophthalmology workforce in the next five years. That includes those planning to retire, but we also have a mismatch, with doctors being trained in hospitals where the easy cataract stuff is gone. They are meant to get their teeth into that first and then do the complex stuff; it has all gone the wrong way.
As well as the training issue, there is an issue with the sustainability of the NHS. Tackling the backlogs is a priority, but so is sustainability and training in our health service. Dr Evelyn Mensah, an inspirational woman at Central Middlesex Hospital, argues that the status quo is leading to the destabilisation of hospital services. The inequity that has flowed means that the foundational principle of the NHS at its launch in 1948—the whole point that it is free at the point of need—has gone wrong. In other words, if patients have the easy stuff, they will be dealt with, but if they have the sight-threatening, dangerous stuff, they languish.
Dr Mensah says that the direction of travel towards the private sector, instead of
“resourcing and supporting the NHS is undermining our comprehensive free service and will exacerbate inequality.”
She asks for additional funding to support independent recovery as, right now, private providers cherry-pick the low-risk cataract work and people are in danger of going blind if they are not seen in time. These are very uncomfortable procedures on the delicate eyeball, which is susceptible to discomfort and infection. We need to save sight, as well as the low-risk stuff. As a business case, the status quo is not good value for the taxpayer; we need to do both.
The College of Optometrists argues for more mixed-mode referrals. There are record numbers in the surgical backlog, but there are also out-patient delays with glaucoma reviews, medical retina reviews and all the follow-up stuff. Diseases such as glaucoma are silent, so it is easy to put them off forever and ever, but people’s sight is threatened; we cannot postpone these things.
We need to spread the load. The whole point of ICBs is that they are meant to provide integrated care, so let us share the load, with proper guidance. In an ideal world, the work would be universal, standardised and consistent. There would be data sharing and all the systems would be joined up at the touch of a button. We could deliver eye care in a modern way, working together and contributing to the system.
Joy Hynes from Hynes Optometrists on Northfield Avenue told me:
“I would like to understand why the urgency for controlling our increasing numbers of myopic patients is not being taken seriously. The Government has no strategy for prevention of this myopic epidemic. Myopia sadly often leads to blindness and that in itself is a problem with scant resource. Understanding the gravity of this situation we have for years been successfully running a specialist clinic for myopia management. This should not be the domain of the well off but should be available to every myopic child.”
In conclusion, we cannot rewind the clock to February 2020 overnight, but let us hope that the jolt of covid is a wake-up call to connect all the different bits of community eye care, optometry and hospitals. Let us go for diversity and inclusion in the workplace, as well as equality of outcomes, so we can join up the different systems and institute a national eye health strategy. I am so proud of my hon. Friend the Member for Battersea and her Bill. Clearing the backlog is only part of the picture. Let us go for a systemic approach with a national strategy, so that sight can be saved.
It is a pleasure to serve under your chairmanship for the first time, Mrs Harris. I congratulate the hon. Member for Battersea (Marsha De Cordova) on securing today’s debate. She knows that I feel strongly about eye health and sight-related issues. On one hand, I am pleased to come along to support her. On the other hand, I am disappointed to be having to speak in this debate, because it was not long ago—in fact, it was 11 January last year—that we had the previous debate.
That debate, introduced by the hon. Member for Strangford (Jim Shannon), was on eye health and macular disease. As well as the hon. Gentleman, we heard from the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), my hon. Friend the Member for Sedgefield (Paul Howell), the hon. Member for East Londonderry (Mr Campbell), my hon. Friend the Member for Darlington (Peter Gibson), the hon. Member for West Ham (Ms Brown), the right hon. Member for Hayes and Harlington (John McDonnell), my hon. Friend the Member for Great Grimsby (Lia Nici), the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar), my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) and the hon. Member for Denton and Reddish (Andrew Gwynne)—and we all came to the same conclusion.
There were a lot of kind words from the Minister in that debate, and a lot of sympathy for our enthusiasm for a national eye strategy. However, I never actually heard the Minister say that she would agree to an eye strategy. That was surprising considering that, during the debate, we learned that over 2 million people currently live with sight loss, and 350,000 people are registered blind or partially sighted. We also learned that age-related macular degradation is a leading cause of blindless. That can be averted with more accessible healthcare provision. We also learned that more people suffer from macular degradation than dementia. Considering the political priority we give dementia, that seems quite shocking.
During that debate, people took the opportunity to talk about sight loss. I do not use the Chamber as a confessional, but I admit that when I first had macular degradation, I had a conversation with my wife to ask whether life would really be worth living if I lost my eyesight. That has always stayed with me. It is an important issue, and not only to me. When I first experienced the problem, I was amazed at how many constituents told me that either they or their families also had sight loss problems. It is a big issue for many people.
During the previous debate, the Minister was keen to stress the additional £2 billion provided through the elective recovery fund. She also mentioned the additional £5.9 billion of capital funding to support elective recovery diagnosis and technology. I was left mystified about how many people would actually be treated for issues relating to their sight, be it cataracts, macular degradation or anything else. A week later, on 18 January last year, I asked the Department how many cataract operations would be performed as a result of the £2 billion allocated to the NHS through the elective recovery fund. The response was:
“This information is not held centrally, as this funding will not be distributed through set allocations.”
So the answer is none.
I have asked several other questions of the Department. I was most disappointed when I realised that the Minister had no intention to introduce a national eye strategy—something that I called for in last year’s debate—so I asked the Secretary of State, straightforwardly,
“if he will introduce a national eye care strategy.”
The response was:
“There are currently no plans to introduce a national eye health strategy. However, NHS England and NHS Improvement are recruiting a National Clinical Director for Eye Care to lead improvements in eye care services.”
That came on 17 January 2022, a week after last year’s debate. If there is a national clinical director for eye care, what are their achievements so far? Will the Minister provide an update on that?
I went back to the Department on 3 March to ask why its policy is that a national eye care strategy is unnecessary. The answer was:
“Regionally based National Health Service commissioners are responsible for commissioning secondary care ophthalmology services, out of hospital services from primary eye care providers and the NHS sight testing service. These services are put in place to meet local identified needs, which vary across the country. It is therefore important to allow local areas to set their own priorities.”
I have to ask the Minister: is it the case that we will not get a national eye strategy following today’s debate?
I attended an event with the hon. Member for Battersea where the person who I thought was the eye Minister, my hon. Friend the Member for Colchester (Will Quince), said that he would think again about a national eye strategy. I thought that this issue was probably important to him, and I asked him some questions in Parliament. I asked him for his assessment of the impact of ophthalmology waiting times on patient outcomes. I did so to try to understand whether he felt that this was an important issue and that we needed to establish a national eye strategy. His response was:
“No formal assessment has been made.”
I asked the Secretary of State yet another question:
“what assessment his Department has made of the potential economic benefits of additional funding in sight loss research.”
For Conservatives, that would be good fiscal policy, because we could ensure that people are not dependent on the state and are not a burden through increased taxation on others, but the answer came back:
“No specific assessment has been made.”
So the answer is that we simply do not know, and we are not going to get any answers by asking the Department.
I ask the Minister to say today that this is an important issue. It is important, especially for people who have gone through the process of thinking that they may lose their sight—they may even question whether it is worth living. As I said, I have certainly been through that. I would like to see greater provision, because the impact of eyesight loss and partial sightedness is huge.
I thank the hon. Gentleman for talking about his personal experience. Among children who have special educational needs and disabilities, sight loss often goes undetected, which is why it is so important to have ophthalmology treatment within SEND schools. Does he agree that if the Government are going to introduce a national eye health strategy, that issue should be one of their priorities?
I certainly do, as the hon. Lady would expect. The implications of having problems at an early age are much longer term, so we will find people without access to education and, ultimately, to employment, and their quality of life will certainly be much reduced if that provision is not implemented. I believe that it should be a major component of a national eye strategy.
In conclusion, I simply say to the Minister that he should make a national eye strategy his legacy, before it is too late.
It is a pleasure to serve under your chairmanship, Mrs Harris. I thank my hon. Friend the Member for Battersea (Marsha De Cordova) for securing this debate, which is about such an important issue. I know that the debate is about a national eye health strategy, and I agree with all the important points raised by my hon. Friend, who continues to be an inspirational campaigner on disability rights. I would go so far as to agree with all hon. Members who have contributed to the debate so far. But I want to focus on something more specific.
In April 2021, the NHS started a scheme that provided sight tests and dispensed glasses to children in special schools in the familiar surroundings of their own schools. The NHS special school eye care service was created after a shocking statistic came out: children with learning disabilities are 28 times more likely to have a sight problem than other children. Four out of five children with a severe learning disability attend a special school, and decades’ worth of studies and reports have all identified higher levels of sight problems in children who attend special schools. We found out that 40% of children in such schools need glasses, but because children have complex needs, they are often unable to get a check-up. Their behaviour makes it hard, and families are hard pressed to attend all the appointments.
The hon. Lady is entirely correct that children with special educational needs often have sight problems, but such problems affect not just those children but children with behavioural problems. They often have behavioural problems simply because they cannot see, and so learn, in the classroom.
The hon. Member is absolutely correct, and we know from the special school eye care service that so many pupils’ behaviour improves as a result of having glasses.
As I have already said, many people with severe learning difficulties find it very challenging to go to appointments or have their eyes examined. We have learned that attending an eye care appointment has been such a stress that 55% of children with special needs miss the appointments that they have had booked. That is not just an extra and unnecessary stress on the NHS, which certainly does not need that at the moment; it also means that the children are not getting the eye care that they need.
That is where the NHS special school eye care service comes in. It was just common sense: bringing eye care into special schools solves the problem of missed appointments and ensures that thousands of children who would have had their eyesight disability ignored get the healthcare that they deserve. That value cannot be overstated. Children with special needs have enough on their plate; if they also suffer from eyesight problems, but cannot explain what is wrong and can never get the problem checked out by a doctor, it must be awful.
Parents and special schools have praised the scheme, because school is a familiar place for children and the service is also cost effective for the NHS. It is one solution to many of the problems in eye care: it helps to get children out of hospital services, and it addresses health inequalities for this patient group for just tens of pounds. In 2015, I visited my local school for children with severe special needs, Perseid School in Morden—an all-through school for three to 18-year-olds led by the inspirational headteacher Tina Harvey, who retires after 20 years in July. I thank her on behalf of all her pupils and families and our entire community for her tireless and brilliant work in her school, which is rated outstanding by Ofsted.
At the school, I met Alyson, a mum, who told me that her daughter Ellie was getting used to eye care in the familiar environment of her school, and not having to take time out for hospital eye clinic appointments. That gave Alyson one less thing to worry about as a parent, and had greatly reduced Ellie’s anxiety. I invite the Minister to come to the school to see the work being done there; his predecessor has visited. It is important that I can show him how the scheme looks on the ground.
After the scheme was extended to 83 special schools, giving 9,000 children eye care that they might not otherwise have had, the further roll-out of the scheme was halted in August 2022 for an evaluation, which has not yet been published. The NHS now says that the scheme is just proof of concept, and that the proof-of-concept service will end in July—in two months’ time.
Parents, schools and eye care providers are absolutely gutted. More than anything, they are confused about what will happen next. There is still no sign of the evaluation, so there is a very real prospect that there will be no eye care services at all in schools after September 2023. I hope that will not be the case. I know that the Minister recently met charities and eye care bodies to hear about the service, but it still is not clear what NHS England will do.
I do not have many huge asks of the Minister today. I just want a very simple fix that will give certainty to parents. Will he publish the evaluation as a matter of urgency? If he can make sure that the evaluation is published, I have no doubt that it will provide evidence of the clinical need for such a service. Once we have the evaluation, we can start to look to the future of the scheme. I am convinced that NHS England should continue the day school service after July; I hope that he can see why that is absolutely common sense.
I conclude with a quote from a new special school, Kingsley High School, which has used the service. Reshma Hirani, assistant head, says:
“This service should be part of the NHS core offer so that it never stops. My pupils have struggled to access eye care in the community and now they have, quite rightly, something that is going to transform their lives. Well done NHS England for thinking about schools like Kingsley and our children. As a Qualified Teacher of Children and Young People with Vision Impairment I can now put in the support that children need, with the confidence that I have all the right information to hand. It really is the gift of sight.”
I reiterate that NHS England’s evaluation still has not been published. Given that there are only a few weeks before the service will have to start making staff redundant, I urge the Minister to publish the evaluation as soon as possible, so that parents, children and everyone involved has the certainty that they absolutely deserve.
It is a pleasure to serve under your chairmanship, Mrs Harris. I pay tribute to my hon. Friend the Member for Battersea (Marsha De Cordova) for bringing forward this debate. I agree with my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) that my hon. Friend the Member for Battersea works tirelessly as a great ambassador and advocate, not just on the subject of eyesight, but for people living and working with disabilities. She has offered me lots of advice for people I work with. We all want to be exemplars, and to make sure that we give people opportunities for employment. She keeps us all on our toes, and does it with superb grace and compassion.
As my hon. Friend knows, living with sight loss from birth, and as many others find out, sight loss can be devastating—it affects work, how we travel through the world and how we interact with those around us. There is not only the physical impact, but the effect on our mental health, and on confidence, which is crucial for how we live our life. The RNIB estimates that there are more than 2 million people living with sight loss in the UK. Shockingly, at least half of that sight loss might be avoidable.
Those who have treatment for sight loss and eye conditions often find it transformative and life-enhancing; however, people with sight loss are waiting too long for that vital treatment, with more than 24,000 ophthalmology patients waiting over a year for treatment in 2022. Last year, the then Minister stated, as we have heard, that the national eye care recovery and transformation programme remained a top priority. As my hon. Friend the Member for Ealing Central and Acton (Dr Huq) has said, it does not seem to be the case locally in our plans that it is a top priority, so we would appreciate an update from today’s Minister.
Findings from the recent workforce census of the Royal College of Ophthalmologists found that 63% of eye units estimate that it will take at least a year to clear their backlogs, and a quarter estimate that it will take over three years. As we have heard, the demand for ophthalmology services has risen rapidly, and is set to increase again by 40% over the next 20 years. The current estimated economic cost of sight loss is around £36 billion, as my hon. Friend the Member for Battersea said. We really cannot afford not to address that.
Prevention is key. The role of optometrists in primary care is essential in supporting good eye health. Regular eye tests can help to catch and treat conditions such as glaucoma, which is the leading cause of irreversible blindness; however, as we have heard, the report last year showed that 17.5 million adults had not had their eyes tested in the past two years, as recommended. My hon. Friend the Member for Battersea spoke about the importance of raising awareness of eye health by creating better public health messaging. Again, we need an update from the Minister on that.
I praise the hon. Member for Hendon (Dr Offord) for making a really important point about macular degeneration. Many people will recognise that feeling. It is something that I have in my own family: people feel that they do not know what it will mean for them. I pay tribute to my constituent, a former Member of Parliament for Bristol West, Valerie Davey, who has macular degeneration. When she was a Member of Parliament 15 years ago, she felt that perhaps she could not do the job. The then Secretary of State Lord Blunkett said to her very firmly, “I have not campaigned for services for disabilities all this time for you to give up because of that. We need to find ways to support you.” She continues to be a great supporter of me and a very avid campaigner, keeping me well up to date with the issues around macular degeneration.
Two thirds of eye units are finding it more difficult to retain consultants and over half are finding it harder to recruit. It is not just about consultants. Non-medical staff are indispensable in eye units, and that has to be recognised if we have a strategy. That really is the key question for the Minister: whether the workforce plan, if we ever see it, will include a commitment to fund the workforce that we need to meet patient demand.
The next Labour Government will take eye health seriously. Sticking plasters are simply not enough. We need a Government who will grasp the root causes of the staffing crisis in the NHS, which is why we will end tax breaks for non-doms and use the money raised to expand our NHS workforce. The next Labour Government will train a new generation of doctors, nurses and midwives to treat patients on time again, doubling medical school places to ensure that we have the workforce that we need, including across ophthalmology.
It is essential that everyone can access the right care when and where they need it. Moving more care to the community will help to support those suffering from sight loss, focusing on the provision of non-clinical community support to complement the work of community optometrists, ophthalmologists in hospitals and rehab officers. My hon. Friend the Member for Mitcham and Morden made an excellent point about the specialist service that we need for children and those with special needs particularly.
If opticians could refer patients to eye specialists themselves, patients would be seen faster and it would free up time in A&E and GP surgeries. As an NHS manager before coming to this place, I was involved in setting up a project to do just that over 10 years ago. It grieves me somewhat to see that across the country such schemes are still not happening, because we need to use all our resources and capacity across the NHS and private health services to bring down waiting lists in the short term. Ophthalmology is an area where the private sector can do more to address waiting lists for some of those procedures. That can skew the rest of the system, but commissioners need to take note of that. We need to make full use of that capacity, as we did when we were in Government last time.
As my hon. Friend the Member for Battersea said, data is vital to ensure that we are targeting strategies to address the problem in the right places. Minor eye conditions services provide eye care for patients who have had sudden changes to their eyes, but only 23 integrated care systems commission them, with five having none at all. What is the Minister doing to address disparities in eye care across the country? Many of my constituents are affected by sight loss. They and people around the country need to have reassurances from the Government that the Government are doing everything possible to address the concerns of healthcare leaders, staff and patients. We all welcome the thoughts of the Minister on the matter.
It is a pleasure to serve under your chairmanship, Mrs Harris. I must begin by thanking the hon. Member for Battersea (Marsha De Cordova) for bringing forward this very important debate. She is a very strong advocate for improving eye health in England. Likewise, I thank other hon. Members who made important points in the debate, including the hon. Members for Ealing Central and Acton (Dr Huq), for Lewisham East (Janet Daby), for Vauxhall (Florence Eshalomi), for Mitcham and Morden (Siobhain McDonagh) and for Sheffield Central (Paul Blomfield) and my hon. Friend the Member for Hendon (Dr Offord). I will try to address the points that have been made as I go through my speech.
I am haunted by the point made by my hon. Friend the Member for Hendon about wondering whether life would be worth living. To address the question directly: yes, of course. This is a hugely important issue for us, for exactly the reasons he set out. As the Minister for both primary and secondary eye care services, I reassure the whole House that I am working actively on the issue.
Since we last debated the topic in December, I met with the hon. Member for Battersea to discuss how we can make progress on all those things. Although I am unable to say exactly in what form the output of that work will come out, I reassure her that we are looking at pace at absolutely all the different issues she raised, both previously with me directly and in this debate.
I also met with Louisa Wickham, the new national clinical director for eye care—the lady who my hon. Friend the Member for Hendon asked about—to talk about NHS England’s eye care transformation programme. To address another question that was raised, I also met directly with the eye care sector, which talked passionately about how it is ready to deliver more out-of-hospital care to alleviate secondary care pressures. That is an exciting opportunity that we are keen to seize.
Although it is not the main topic of today’s debate, the future of sight testing in special schools is a very important area of concern to a number of hon. Members present, and to me as well. I recently convened a roundtable of experts to discuss the future of sight testing in special schools, and I will continue to engage with NHS England on their proposals for the future. I hope that it will not be too long before I am able to update the House on that.
I am absolutely seized by the arguments I have heard today—and earlier—from the hon. Members for Lewisham East and for Mitcham and Morden, and from the experts and people in special schools who have seen the advantages of the service. I join the hon. Member for Mitcham and Morden in paying tribute to Tina Harvey for her work. Some of the people in those special schools are just totally inspirational.
I thank the Minister for seeking to address special educational needs ophthalmology in schools. Can he say when the outcome of the roundtable on what the future will be like for ophthalmology in schools is expected? It is due to come to an end in July but, in actual fact, in previous years there were promises that it would be a long-term service.
I expect that to be something we can come back on imminently.
I will come back on to the main topic of today’s debate. While I acknowledge that we must go much further to address the current and future capacity challenges facing eye care services, I highlight some of the excellent work already being done by doctors and nurses across the NHS. Our existing prevention and early detection measures are already playing a key role in preventing avoidable sight loss, and there has been progress over recent years.
One of the most important things we can do in terms of prevention is take action to reduce obesity and smoking, which are both massive risk factors for sight loss. We have made good, long-term progress in reducing smoking rates among adults, which have come down from about 21% in 2010 to 13% now—the lowest on record. Of course, that still means that we have one in seven adults smoking, which is why on 11 April I announced a package of new measures to achieve our ambition to be smoke-free by 2030. We are also working with the food industry to ensure that it is easier for people to make healthier choices, and supporting adults and children living with obesity to achieve and maintain a healthier weight.
In terms of the vital screening services raised by various hon. Members, I have talked previously about the success of the diabetic retinopathy screening programme, which provides screening to over 80% of those living with diabetes annually. Between 2009-10 and 2019-20, the number of adults aged between 60 and 64 registered annually as visually impaired due to diabetic retinopathy fell by 20%. That is real progress. The success of our screening programme has also been recognised by the World Health Organisation as a service that other countries should aspire to achieve.
As Members have heard me say before, one of the best ways to protect our sight is by having regular sight tests. That is why the NHS continues to invest £500 million a year in delivering over 12 million NHS sight tests, and provides optical vouchers to help with the cost of glasses for eligible groups.
As for secondary care services, when an issue with eye health is detected, it is vital that individuals get timely diagnosis and treatment. The pandemic had a huge impact on ophthalmology, as it did right across the NHS. We set ambitious targets to recover services through the elective recovery plan, supported by more than £8 billion between 2022 and 2025, in addition to the £2 billion through the elective recovery fund and the £700 million targeted investment fund last year. That will drive up elective activity and get through the backlog more quickly.
We know that NHS eye care teams continue to work hard to provide care as quickly as possible. The average waiting time is reducing; it was down to 11.3 weeks in March, compared with 12.9 weeks in September last year. Progress has also been made in reducing the number of patients waiting the longest for ophthalmology treatment. The number of patients waiting 78 weeks or longer was reduced by more than 85% between September 2022 and March this year.
A large proportion of the patients who are waiting for more than 78 weeks are waiting for corneal grafts. NHS England is working with NHS Blood and Transplant to increase the supply of corneal graft tissue. For patients who are waiting more than 52 weeks, NHS England’s elective recovery team are working hard to support local systems to increase capacity and provide care as quickly as possible. Surgical hubs and the independent sector are also being used to increase delivery, particularly of cataract surgery. In 2021-22, nearly 500,000 cataract procedures were provided on the NHS—more than pre-pandemic.
The hon. Member for Ealing Central and Acton made a point that I felt a bit ambiguous about, in so far as she raised the use of the independent sector. As she knows, Opposition Front Benchers also support the use of the independent sector to try to plough through the elective backlog. On the other hand, there is an important point about ensuring that trainees can get sufficient cataract surgery training and can have a broad range of clinical experiences as they are trained. The NHS has been working with the Royal College of Ophthalmologists to support that, because there is a genuine issue. We are working on that, even though we think it is right to use the independent sector to get through the backlog more quickly and save more people’s sight.
One of the most important points that the hon. Member for Battersea made was about more fundamental reforms to eye care services. She mentioned that ophthalmology is the busiest outpatient speciality and has a number of capacity and workforce challenges that are likely to grow. Predictions from the Royal College of Ophthalmologists say that demand for services will increase by 30% to 40% over the next 20 years, in line with an ageing population. In the light of those predictions, consideration has been given to how we can increase capacity to ensure that we have sustainable eye care services fit for the future. No one should have to face losing their sight due to delays in accessing care.
NHS England’s transformation programme has been considering what services could be safely moved out of hospital. The hon. Member is right to say that image sharing between primary eye care providers and secondary care specialists, through telemedicine hubs, could allow more patients to be seen in the community, which is a very exciting opportunity. A pilot that we are running in north-central London has already shown the potential for that model to improve the triage of patients into secondary care. NHS England plans to support a number of other integrated care systems to adopt the eye care referral model, aligned to their local commissioning arrangements.
On the way in which we can join up primary and secondary care and ensure that MECS are being commissioned across all ICBs, does the Minister agree that that measure should be consistent and must take place, so that across all our ICBs, MECS would be available in the community?
The hon. Lady has read my mind, because I was about to come on to MECS. We will produce standard service specifications for MECS to reduce the variation that she rightly raised, as well as driving forward the integration of those new technologies into local ICSs.
As well as making the best use of our clinical capacity, we have to invest in growing the future workforce, as the hon. Member for Sheffield Central (Paul Blomfield) said. That is why we have taken steps to increase the ophthalmology workforce. We increased training places in 2022, and more places are planned for this year. In addition, there will be improved training for existing ophthalmology staff so that they can work at the very top of their clinical licence to further increase capacity and support the flow and delivery of care.
I recognise the important role of research and innovation in understanding sight loss and making available new treatments—a point that several hon. Members raised. That is why we continue to invest significantly in vision research. As I highlighted in a previous debate, the National Institute for Health and Care Research has invested more than £100 million in funding and support for eye conditions research over the past five years, and the NIHR Moorfields Biomedical Research Centre was awarded £20 million last year for another five years of vision research leadership.
I know that the Minister is coming to the end of his speech, but I do not want to let him sit down without pressing him for a timeline for the workforce plan. Will it cover ophthalmology and eye care? He said that he met Louisa Wickham, the eye care transformation lead, but will he confirm that all the investment in that space will continue and will not come to an abrupt end?
The Minister says he is open to the idea of more research. Charles Bonnet syndrome is recognised by the NHS, but it is seen as a side-effect of sight loss. Will he commit to some proper research on that?
Just to correct the record, I agree that it should be all hands on deck to clear the backlogs. I was not saying that it is either/or; it is about joining forces on cataracts.
Very good. As a first step towards the research that the hon. Lady calls for, I commit to doing my own research on the syndrome that she describes, which sounds incredibly disturbing for those who suffer from it.
I hope that the range of work that I have outlined reassures hon. Members that we acknowledge and take seriously the hugely important challenges faced by eye care services. We are working at pace on these issues, and we will be doing more. I thank all hon. Members who have taken part in the debate for raising these important issues.
I thank all hon. Members for their contributions. This has been a healthy debate, but it is deeply worrying that we continue to debate the need for a national eye care strategy for England.
I thank my hon. Friend the Member for Ealing Central and Acton (Dr Huq) for her fantastic speech and the work she is doing locally. As a campaigner, I learned so much from the incredible work of my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) and her massive support and campaigning for special schools in her constituency. My hon. Friends the Members for Vauxhall (Florence Eshalomi) and for Sheffield Central (Paul Blomfield) are no longer here, but they both made very good contributions, as did my hon. Friend the Member for Lewisham East (Janet Daby).
I want to say a special thank you to the hon. Member for Hendon (Dr Offord) for sharing his experience of macular, and for his tireless campaigning on this issue. I hope that we can continue to champion eye health and raise the need for a national plan to tackle the challenges that people with sight loss face.
I take the Minister’s point; I know he is trying, but we need action. We need to see fundamental changes, particularly on the workforce, the pathway, the joining up of primary and secondary care, research and public awareness. He said that all the areas that we have discussed on a one-to-one basis and that I have raised here are being looked at. Can we have another meeting so he can update me on all the work that is going on? I want to ensure that none of this is in vain and that we actually see some sort of plan—some sort of strategy—that delivers for people living with sight loss and prevents more people from losing their sight.
Question put and agreed to.
That this House has considered the potential merits of a national eye health strategy.
Food Price Inflation and Food Banks
I beg to move,
That this House has considered food price inflation and food banks.
It is a pleasure to serve under you, Mrs Harris. I am pleased to be able to put some points to the Minister for Food, Farming and Fisheries, the right hon. Member for Sherwood (Mark Spencer).
I would like to raise a number of points, so I hope the Minister will indulge me, even if I do stray into the Treasury brief. I sought this debate because of the growing concern about food price inflation and food poverty. It is a year since I conducted a cost of living survey in my constituency about people’s experience of the cost of living crisis. There was a major concern about the growing cost of energy—not then at its peak, but still a dominant issue at the time. The survey also showed that people were worried about the cost of food, with 36% of respondents, including 61% of those on benefits, skipping meals last year. Almost 50% of those asked said they would be cutting down on essentials, such as food, in the months ahead. It seems that that has been the case in the past 12 months.
The Trussell Trust food bank covering Merthyr and Cynon Valley, which opened in 2011, has been helping families since that time. In the past year, it provided a record 2,800 emergency food parcels to people in Cynon Valley—a 31% increase. That included more than 1,000 emergency food parcels for children, which is a disgraceful 33% increase. There has been a long-term increase in need over the past five years. Food banks in Cynon Valley have seen a 61% increase in need since 2017-18.
The Trussell Trust is not the only local food bank. The Salvation Army food bank in Aberdare has helped more than 1,600 people in the past year, and the numbers are growing. Those people often live alone, are elderly or have lost their jobs. Running food banks is getting harder and they need more support, including from local supermarkets. A volunteer at another food bank at Fernhill in my constituency recently told me about how they had to provide kettle packs—yes, kettle packs—for those reliant on a kettle when they cannot afford to cook. Women also regularly come in to pick up sanitary products.
The rise in food bank use can be seen across the United Kingdom. The Trussell Trust reported that it gave out 1.3 million emergency food parcels in 2017-18, but almost 3 million in 2022-23. What are the reasons? The Trussell Trust has said that the growth in the need for food banks is about a shortage not of food but of money: a long-term cut in pay, a long-term cut in social security, and bills accelerating ahead of incomes. That is a political choice.
Between April and August 2022, over half of food banks surveyed by the Independent Food Aid Network found that 25% or more of the people they supported had not used their services before. They are increasingly people in work in social care, the public sector and across sectors. Work does not pay, and that is the reason for in-work poverty.
I thank my hon. Friend for securing this important debate. Yesterday it was reported that desperate parents are having to steal baby formula to feed their children. It is seen as stealing but, of course, it is survival. Does she agree that the Government should consider price controls on essential items such as baby formula?
I certainly do. My hon. Friend makes an extremely important point—we are the fifth richest nation in the world and people are being forced to take such steps. It is absolutely disgraceful and shocking. I will come to food prices in a moment, so I thank her for that intervention.
It was also only yesterday that the Office for National Statistics reported another monthly fall in real-terms pay. For 17 months in a row, pay has risen below the rate of inflation. That is a pay cut. Indeed, the TUC says that workers have lost more than £1,000 from their pay over the last year. What is clear—beyond doubt—is that wages are not driving inflation; if anything, they are a drag on it.
In a new poll for More in Common UK published today, 75% of those polled said that the cost of living is one of the biggest issues facing the country and 45% said they are shopping around more for groceries; when looking at those bills going up, it is increasingly the weekly food shop. The Office for National Statistics reported earlier this month that food and non-alcoholic drink inflation was at 19.2% and that around half of adults are buying less food when they go shopping.
I am grateful to my hon. Friend for giving way and for her work on this important issue. One piece of analysis has even shown that the prices of some basic food items are rising by 30%. My hon. Friend is right about the scale of the challenge facing many families. Is she aware of the pressure facing those in work in addition to the pressure for those on benefits? In my area, many people living in the suburbs—people who have jobs—are now attending food banks to keep their families from falling into terrible poverty.
Yes, I am very aware of those people. I work closely with food banks in my community, as I know other Members do, so I know that there has been a significant increase in the number of people in work who are accessing food banks, which is completely unacceptable. It is unacceptable for anybody to be using them.
Why are prices going up? We have to be clear that there are multiple causes. Droughts, climate disaster, fuel costs and the Ukraine war have all had an impact. However, as Unite the union has set out in real detail in its research on profiteering, which looks at the profits of companies in the FTSE 350, all of this has been made worse by profiteering along global supply chains, from agribusiness multinationals to high street supermarkets. It is not just Unite saying that. The European Central Bank recently said:
“Profit growth remained very strong, which suggested that the pass-through of higher costs to higher selling prices remained robust.”
The top eight UK food manufacturers made profits of £22.9 billion in 2021, with both profits and margins up 21% on 2019, with Nestlé, Mondelēz and Unilever all benefiting from double-digit growth in profit margins. In the supermarket sector, Tesco, Sainsbury’s and Asda—the top three UK supermarkets—nearly doubled their combined profits to £3.2 billion in 2021 compared with 2019.
Supermarkets are turning over hundreds of millions of pounds and handing dividend payments to wealthy investors, who are obviously not the people struggling to eat. In 2021-22, a total of £704 million was paid by Tesco in dividends and last July the company also paid shareholders £1 billion in its share buyback scheme.
The problem is that people who are reliant on low pay and social security are funding these exorbitant dividend payments and I really do not understand how the Government can justify that; I am interested to hear what the Minister has to say. People who cannot even afford to go to supermarkets are going to food banks. This is a crisis—a cost of living crisis—and it should not be allowed. We have taken action to control energy prices. When are we going to take action on the cost of food?
In Wales, where the Labour Government are in touch with ordinary people’s concerns, we are doing what we can, despite our underfunding by the UK Government. The Welsh Government are rolling out universal free school meals, which are now available in reception and years one and two, and they have a timetable to roll them out to all children in primary school. Think how much more quickly they would be rolled out in Wales if there was a fair, needs-based funding formula for central funds to the Welsh Government.
I thank my hon. Friend for the fantastic work that she does in her community on the issue. Does she agree that the Minister should follow Wales’s lead and introduce universal free school meals? The Government should introduce a free school breakfast and lunch for all children in state education and, alongside that, enshrine a right to food in law, so that all children and adults have enforceable food rights, and we tackle the scourge of hunger in our communities.
I congratulate my hon. Friend on the sterling work that he does on the Right to Food campaign in Liverpool. I totally agree that the UK Government need to follow the Welsh Government’s lead and roll out universal free school meals to all children. I thank him for his intervention.
Universal free school meals could be rolled out across the UK if supermarkets and suppliers were not allowed to pay such enormous dividends to shareholders, and instead paid a windfall tax. Imagine that—food retailers taxed to provide free school meals. It is an obvious thing to so. Elsewhere around the world, other Governments are taking action. In France, the Government have announced an anti-inflation trimester, during which supermarkets are expected to make discounts on food that will cost them, according to the French Prime Minister, hundreds of millions of euros. That appears to be a voluntary scheme. Carrefour and Casino supermarkets have made cuts. We need more information on the scheme’s impact and the benefit for families, but I hope that the Government are watching and discussing the matter with their French counterparts. Will the Minister respond to that point? Another example is Switzerland, where food is subject to price regulation. Prices there grew at a rate of 4% in December last year, compared with nearly 12% in the US and nearly 17% in the United Kingdom. Have the Government considered how Switzerland regulates its food pricing?
Sadly, this Tory Government are not taking action. I looked at the outcomes of yesterday’s food summit, which was renamed the Farm to Fork summit—no reference whatsoever to food inflation or food poverty. I note that the union most heavily involved in the food sector and agriculture, Unite the union, and the Bakers, Food and Allied Workers Union were not invited to the summit. Why?
The Environment, Food and Rural Affairs Committee
“is to investigate how profitability and risks are shared through the food supply chain and the existing government system of monitoring and regulation of these.”
On Monday, the Competition and Markets Authority announced
“the stepping up of our work in the grocery sector to understand whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market.”
Will the Government commit to learning from those processes, and will they look at other Governments’ interventions in their food markets? The crisis is such that the Government must act now, even while those investigations go on.
What should the UK do? First, we must inflation-proof incomes. Many of us on the Opposition Benches have been calling for that for a long time. That means an end to the Tory low-pay agenda that cuts public sector workers’ pay in real terms. Secondly, the Government should adopt the Trussell Trust and Joseph Rowntree Foundation’s call for an essentials guarantee. That would mean an independent process to determine the level of that guarantee, ensure that universal credit meets that level, and ensure that deductions do not take it below that level.
Thirdly, we need a windfall tax on food profits for supermarkets and, where possible, suppliers. If we can have such a tax on fossil fuel suppliers, why not food suppliers? It is incumbent on the UK Government to engage with that proposal, for which they have set a precedent, given what they have done on oil and gas. The tax revenue could be used to expand the provision of free school meals, as my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) just said. Fourthly, we need controls on food speculation, as the former shadow Chancellor, my right hon. Friend the Member for Hayes and Harlington (John McDonnell), said in a debate yesterday. Finally, have the Government explored any mechanisms for a price ceiling on a core basket of goods? People are struggling in this cost of living crisis, and this Government are standing by as they suffer.
I will finish with some personal commentary. Prior to entering this place, I volunteered at a local food bank for a long period. It will never leave me: when I looked into the eyes of the people coming into the food bank, I saw despair, but also a sense of embarrassment and shame at having to access a food bank in the fifth-richest nation in the world. It is an absolute disgrace. The answers are there; this is a political choice. It is extremely urgent that immediate action be taken by the UK Government to resolve this issue.
It is a pleasure to serve under your chairmanship, Mrs Harris. I thank the hon. Member for Cynon Valley (Beth Winter) for securing today’s important debate. I also pay tribute to her efforts in her constituency, and in her previous roles before joining this House.
We have seen food price inflation continue to rise. As the hon. Lady said, it was 19.2% in March 2023, up from 18.2% in February. That is the highest rate that we have seen in 45 years. I certainly recognise the impact that high food prices are having on household budgets and on tackling inflation, and this Government’s No. 1 priority is to lower—to halve—that inflationary rate this year. Yesterday, as she identified, the Prime Minister hosted the first UK Farm to Fork summit, which focused on how Government and industry can work together to bring great British food to the world, build resilience and transparency across the supply chain, strengthen sustainability and productivity, and support innovation and skills.
Can the Minister inform the House—my hon. Friend the Member for Cynon Valley (Beth Winter) touched on this—whether any trade union representatives were invited to the UK Farm to Fork summit held at Downing Street yesterday? I have tabled a written question on that, but the response was not very clear.
I am not privy to the whole guestlist, but of course there is a limit to the capacity in No. 10 Downing Street. There are lots of people who would have liked to be there whom we were not able to accommodate. However, it was important that we drew together industry leaders—retailers, processors, and primary producers—so that they could work together on delivering innovation in the sector, and so that they could try to lower food prices and not only make our great British food producers competitive across the world, but benefit our constituents.
Following that summit, we announced a package that includes a broad range of actions to strengthen the resilience of our farming sector and drive long-term sustainability. That includes a new set of principles to protect farmers’ interests in future trade deals, more funding to help producers export, plans to reduce red tape for farmers looking to diversify their income streams, and making it easier to build glasshouses in the UK.
Last week, the Chief Secretary to the Treasury met supermarkets to discuss the cost of food, and the Chancellor is meeting them again shortly to discuss how we ensure that consumers have access to a range of affordable food, in recognition of the pressures that people and producers are feeling. We have also provided significant support this year, worth an average of £3,500 per household. That includes direct cash payments to the most vulnerable households, as well as our uprating benefits and the state pension by 10% in April.
Food banks are a great example of the generosity of spirit of communities across the country. The Government do not have any role in the operation of food banks, as they are independent, charitable organisations that bring people in local communities together to support one another. However, recognising that good work, the Government will provide over £100 million of support for charities and community organisations in England. It will be targeted at supporting critical frontline services for the most vulnerable people—services that are struggling to meet increased demand.
The Minister has not yet addressed the idea of a windfall tax on supermarkets. Are the Government looking at that? Is the Minister saying that food banks are acceptable? That is what I took from what he just said. Surely we should be ending the use of food banks in the fifth-richest nation in the world. It is appalling that they exist.
I am grateful for the hon. Lady’s intervention. What I was saying was that I recognise the great work that those in food banks do. I recognise the work that the charitable sector does to support the most vulnerable. I am not saying that food banks should be the model for the future; I am saying that the great work they do should be recognised. The best way to get out of poverty should be through work and opportunities to earn a fair wage, so that people can afford to buy their own food.
On that point about wages, the Bakers, Food and Allied Workers Union found that four in 10 food workers are forced to skip meals. Over 60% of respondents to its recent survey said that wages are not high enough for them to meet their basics needs. The people who produce food cannot afford to buy and eat it. What does the Minister say to that?
We are slightly straying into the area of the Department for Work and Pensions and the Treasury, as the hon. Member for Cynon Valley indicated at the beginning of the debate, so I hesitate to comment too much. What I would say is that that is why the No. 1 priority of the Government is to get inflation under control. As the hon. Gentleman identified, the people who are most vulnerable and who are struggling to make ends meet are the people who are damaged by high inflation. In ’21-22, 93% of UK households were food-secure; that is virtually unchanged from’20-21, when it was also 93%. In ’21-22, 3% of individuals, or 2.1 million people, lived in households that had used a food bank in the previous 12 months.
My Department is working across Government to ensure that we have the right support in place to address rising food price inflation. More than 8 million households are eligible for means-tested benefits. Some will receive additional cost of living payments totalling up to £900 in the ’23-24 financial year. Over 99% of the first cost of living payments this year have already been made. For those who require extra support, the Government are providing an extra £1 billion of funding, including Barnett impact, to enable a year-long extension of the household support fund in England from April. That is on top of what we have provided since October 2021, bringing total funding to £2.5 billion. From April 2023, we increased the national living wage by 9.7% to £10.42. That represents an increase of over £1,600 to the annual earnings of a full-time worker on the national living wage; estimates suggest that could help over 2 million low-paid workers.
I once again thank the hon. Member for Cynon Valley for introducing this debate. I reassure her that the Government take food prices seriously. We will continue to work across Government.
I apologise to the Minister and the hon. Member for Cynon Valley (Beth Winter) for missing the first 30 seconds of the debate. The Minister talked about working on a cross-departmental basis. He knows that I have asked this question before. I am very pleased to see that the Government have not taken the Home Secretary’s approach to the seasonal agricultural workers scheme and the 45,000 visas. Will we get some security and certainty about the extension of that scheme over a longer period, so that farms can invest in the equipment they need to deliver different ways of picking our fruit and vegetables, and can train people?
I am grateful for the hon. Lady’s question. I hope she recognises that yesterday was a huge step forward in guaranteeing those 45,000 visas for next year. That allows farmers to plan for the future and organise next year’s staff rota. She also recognises the importance of innovation and investment in new tech. That is why the Government are investing millions of pounds in new technology and the development of agritech, including robotics and equipment to help farmers become more efficient. We will continue to work across Government and with industry to ensure that everyone has access to affordable food. I thank hon. Members for participating in the debate.
Question put and agreed to.
Council Tax and Stamp Duty Alternatives
I beg to move,
That this House has considered the matter of alternatives to Council Tax and Stamp Duty.
It is an honour to serve under your chairmanship, Mrs Harris; we have spent a lot of time together today. I will address the problems with our property taxes, discuss previously suggested remedies and present a solution that cuts taxes for 77% of households, generates a surplus and garners popular support. I do not intend to speak for long. A lot of colleagues are present, and I want to hear their views, and hear from the Front Benchers.
I realise that this area is fraught with danger. My first political memory is of the poll tax riots. We all know the consequences of trying to shake up the domestic rates system, but our current property taxes unfairly favour the wealthy, burden lower-value homes, discourage efficient housing use, under-tax larger properties and penalise homebuyers and sellers. Those issues affect us all, and all our constituencies. Property taxes fund our important local services and infrastructure. They impact owners and renters alike. When these taxes are ineffective, society suffers. Council tax and stamp duty are the main culprits.
Council tax was introduced three decades ago, in 1993, as a replacement for the unpopular community charge—the poll tax—but over time council tax has come to mirror many of the characteristics of its disliked predecessor. Surveys reveal public dissatisfaction with it. Only 29% of people consider council tax calculations fair, and 33% support maintaining the status quo. It places the greatest burden on the young, low earners and residents in less prosperous regions, while greatly benefiting wealthy homeowners and property investors. As property prices have soared, average incomes have stagnated. Research by the think-tank Onward shows that households spend between 0.8% and 4.5% of their income on council tax, with the highest payments in the north-east and south-west and the lowest in London. That is not the mark of a fair tax.
It is unfair for two reasons. First, it relies on outdated property valuations from almost 30 years ago, disregarding substantial house price growth, especially at the top end of the market. That means that those who benefited the most from house price rises have also been the biggest beneficiaries of the council tax system. Secondly, the band structure creates a disproportionate burden, as all properties within a band pay exactly the same amount. Consequently, lower-end properties in each band bear a higher proportionate tax load than high-end ones. Those flaws sever the link between council tax and property values. For example, a person in a £100,000 property pays roughly five times more tax relative to property value than someone in a £1 million property. Here in Westminster, a £30 million mansion pays £1,828 in council tax, while a family in a modest band D home in my constituency of Barrow and Furness pays £2,068. How in the world can that be fair?
Stamp duty, council tax’s accomplice, compounds the problem. While stamp duty is progressive, with higher rates for larger transactions, it still exacerbates the housing crisis by hindering efficient property use. Taxing transactions discourages homeowners from moving, whether it be an older couple downsizing or a growing family upsizing. The economic impact extends to job opportunities rejected due to moving costs. The Chancellor’s stamp duty holiday gave the UK property market a much-needed boost during the pandemic, but it also highlighted the merits of abolishing it altogether. Stamp duty hampers housing stock utilisation and residential mobility. Abolishing stamp duty on owner-occupied properties would unleash transactions and alleviate the housing crisis. Stamp duty should, however, remain in place for second home and non-residential buyers. In communities such as mine in Barrow and Furness and in Cumbria more widely, with villages being hollowed out by owners of second homes and holiday lets, that just makes sense.
Our country’s property taxes, unpopular and unfair, demand reform. Proposed remedies so far have included new council tax bands, local income tax, higher stamp duty thresholds and capital gains tax on primary homes, but they are just band-aids. Fundamental reform is required to address the inequity and inefficiency of our property taxes.
I congratulate my hon. Friend on bringing forward this debate and on the eloquence of his speech; this is an important subject. Does he agree that one of the issues with council tax is that it is very much subject to the vagaries and the whims of whichever political party is in charge of the town hall? The Liberal Democrats in Stockport said that they wanted to freeze council tax, but when in power they put it up by 4.3%. That is an extra burden on taxpayers, and they do not necessarily get any value for that money.
My hon. Friend makes an excellent point; I am sure that her electorate in Cheadle will have been listening hard. As I have said, only 33% support keeping council tax as it is. I am sure that that number is even lower in my constituency, where the administration has put up council tax by 3.9%. They are very unhappy with the current situation.
I and many of my colleagues support a move to a proportional property tax system, which is a methodology put forward by Fairer Share. It offers a concrete solution to replace the current convoluted band system with a simple flat tax of 0.48% of property value, and a 0.96% surcharge for second homes, empty homes and non-residential properties.
The benefits of moving to such a system would be significant. Some 18 million households would experience a tax reduction, with an average annual tax saving of £556 per household. Council tax payers outside central London would save £6.5 billion annually, providing a substantial boost to local communities and economies. Over 750,000 house buyers each year would be exempt from paying stamp duty and navigating exemption paperwork, simplifying and reducing the cost of house buying. Increased housing market activity would contribute to a £3.27 billion boost in GDP per year.
Some 1.4 million second homes, empty homes and undeveloped properties would finally contribute their fair share of tax, with the revenue used to lower bills for all taxpayers. That would incentivise owners to rent, sell or develop those properties and increase the housing supply. The calculation is that over the span of five years, 600,000 homes would be released. That includes 250,000 one and two-bedroom homes, which we know young people desperately need right now. The reform would generate an annual surplus of £5.4 billion through surcharges on second, empty and foreign-owned homes. I am sure the Treasury can think of inventive ways to spend that sort of money. Finally, shifting the tax burden to owners, aligning with broad international practice, would also ease administration for councils.
However, it is rare—perhaps impossible—to propose a wide-ranging reform where there are not winners and losers. After all, we are proposing to rebalance the property tax system based on principles of fairness. However, there are several mitigations that could be implemented to soften the blow of any change for those who might have to pay more. First, during the transition to a proportional property tax system, any rise in local property tax could be capped at £100 a month for primary residences. That transitional protection would cease upon sale, but buyers could benefit from the removal of punitive stamp duty. Secondly, a deferral mechanism could be put in place, allowing owners who are genuinely unable to pay to defer their tax payments with a modest interest charge. That deferred amount could be paid later on the sale of their property or home, avoiding any debt-related issues associated with council tax collection. Those measures aim to alleviate the impact on individuals while ensuring a fair and manageable transition to the new system.
Of course, there would also be impacts on local government finance. For councils that would generate less revenue from a proportional property tax compared with their current council tax, the shortfall would need to be supplemented through central Government grants or funds redistributed from councils generating higher PPT revenue. The arrangement is not new, and it is a long-standing feature of local government finance. It could be seamlessly incorporated into the proportional property tax system with the following principles.
First, the Government could fully recognise how the proportional property tax affects the revenue-raising capacity of councils when formulating the funding arrangements for local government. Secondly, councils could be granted new powers to independently generate additional revenue. Some councils may experience a decrease in revenue-raising capacity, but there are opportunities to introduce new revenue-raising powers, such as planning reforms and charging more for increased house construction. Again, that would be beneficial for counties such as Cumbria, Devon and Cornwall that are facing the accommodation and short-term let issues that I mentioned earlier.
Thirdly, while some councils might be sceptical about the transition to proportional property taxes because it could result in severe revenue-raising capacity issues, it is important to note that it is the residents in such areas who will benefit most from a decrease in property tax bills. Finally, the policy may also create incentives for companies and individuals to relocate to areas with lower proportional property tax rates, benefiting those communities and eventually increasing the revenues for local authorities. The measure rebalances the local economy and helps level up left-behind areas in one fell swoop.
If taken up, the measures would address the impact on local government finance by ensuring a balanced transition, exploring new revenue sources and considering the overall benefits and adjustments that can be made to accommodate different council circumstances. The reform is crucial for my constituents in Barrow and Furness. It will benefit 96% of the households there, with an average annual saving of £600. It is no surprise that 58% of voters in my constituency support the policy, with only 9% opposing it, according to polling by J.L. Partners. Nationally, voters overwhelmingly back the policy by a ratio of 3:1—in the north it is 9:1. A majority of voters in every constituency support the reform. I fundamentally believe that we should lead with policy and not follow polls, but those are numbers that are worth paying attention to.
Council tax and stamp duty are fundamentally flawed, and many of us recognise that. Politicians from most of the parties represented in this Chamber, along with think-tanks such as Bright Blue, the Institute for Fiscal Studies and the Institute for Public Policy Research, and campaign groups such as PricedOut, Generation Rent and the Intergenerational Foundation, have endorsed the transition to a proportional property tax. Prominent economists from respected publications, including the Financial Times, The Daily Telegraph, The Economist, and The Guardian have also endorsed the reform.
The policy would significantly increase the disposable income of individuals across the country, directly benefiting households and improving the quality of life in local communities. It would free up properties, encouraging efficient use, and, crucially, it is based on the principle of fairness. It represents a genuine and impactful stride towards levelling up and advancement for all. I look forward to listening to what my hon. Friends and colleagues have to say.
It is an honour to serve under your chairmanship, Mrs Harris. I congratulate my hon. Friend the Member for Barrow and Furness (Simon Fell) on securing this debate and putting forward the case so adeptly in his opening remarks. I do not intend to repeat them. I have spoken in favour of Fairer Share’s proposals in the past, and I think there are more things that we can do besides. I also note that the Housing, Communities and Local Government Committee report from July 2021—I think my hon. Friend the Member for Cheadle (Mary Robinson) was on the Committee at the time—suggested that the Government look at this area.
I welcome all the refugees from the Finance (No. 2) Bill Committee who are in the Chamber. It is a pleasure to support the Government on that, but what we are trying to do today is steer them towards ways in which they can improve our tax system in the future. I am sure the Minister will be taking notes.
I pay tribute to Fairer Share, Andrew Dixon and the people behind that campaign, for the work they have done devising the policy and producing the straight-forward numbers at the top of it, as well as for thinking incredibly hard about its implementation challenges. They have addressed the issue of valuation, which my hon. Friend the Member for Barrow and Furness referred to, and thought about how to phase it in, how to manage the revenue flows and how to manage the impact on councils. That work has been done in advance of the Treasury considering the policy. I am sure that the Treasury would look favourably at the various reports commissioned by Fairer Share, as ways in which the policy could not only be brought in but implemented in a practical way.
I will quote a few figures that reference my constituency of Newcastle-under-Lyme. Under the proposals, the average household in Newcastle-under-Lyme would gain about £600 per year, and 97% of my constituents would be better off under this regime. We know that council tax hits constituencies such as mine and those of many hon. Members here today harder, partly because it relies on that 1991 valuation. There has been a disproportionate property boom. Prices have risen everywhere, but disproportionately in the south of the country. Therefore, people in constituencies such as mine and that of my hon. Friend the Member for Barrow and Furness are paying a far greater proportion of their property’s value in their annual council tax.
I do not want to go through all the details, because I am mindful of your strictures on brevity, Mrs Harris, but I think that moving the burden of council tax to the owner of the property rather than renters is a sensible step, not only to take a little bit off the renters’ plate, but to make life easier for councils’ collection departments, because the house is sold far less frequently than the lease changes. It is a difficult job for council collection units to keep up with those changes and ensure that people do not fall behind with their council tax when they move into a property. We all have constituents who have fallen behind with their council tax, and it can be very difficult for them to recover.
This policy would complement the Government’s levelling-up agenda. Newcastle-under-Lyme has been very fortunate, receiving more than £35 million through the towns fund and the future high streets fund to level up. I always say that levelling up is not just about nice new buildings and transport links; it is also about jobs and skills. We have to get the tax part right for levelling up, too. A policy like this would mean levelling up across the country for anyone in those poorer, lower-middle-income households. It would mean a £556 annual tax cut for 19 million people in those households. It would mean the Treasury’s approach dovetailing with that of the Department for Levelling Up, Housing and Communities, in terms of the direct support given to communities such as mine. This would give direct support to families living in those communities, and families living in lower-priced houses throughout the country. It would be genuinely levelling up across the country.
Finally, I will say a quick word on stamp duty, which my hon. Friend the Member for Barrow and Furness did not cover quite so much in his speech. We hear a lot about the housing crisis and the need to build more houses to address that. In my view, downsizing is key to solving our housing crisis in this country. Obviously, people live in houses, but, in a real sense, people live in bedrooms, because someone needs a bedroom to sleep in. We have an appalling allocation of bedrooms in this country. Understandably, many people, including retired couples, still live in the house where they brought up their children. That might be a four-bedroom house in they are using only one bedroom. There are so many unoccupied bedrooms in the private sector.
This reform to stamp duty would address the impediment of stamp duty itself being a reason that people do not want to move home—it is expensive to move, even if downsizing, particularly in the south-east. The reform would also provide a strong incentive for people to downsize to a lower-value home. For all those reasons, I hope that the Treasury is listening to my hon. Friend’s proposals. I am fully in support of the motion.
It is a pleasure to serve under your guidance this afternoon, Mrs Harris. I offer massive thanks to my neighbour and friend, the hon. Member for Barrow and Furness (Simon Fell), for bringing this important issue to the House. It is important for all parties, as they put their manifestos together for the next election, to think about this matter very seriously. I pay tribute to Andrew Dixon and his team.
The proposal for a proportional property tax is worthy of serious consideration. Council tax—basically a back-of-a-fag packet alternative to the poll tax dreamed up quickly in the early 1990s—is a bad attempt at a wealth tax, which fails miserably. It is regressive: someone can live in a £20 million mansion in Westminster and pay less in council tax than someone living in a social rented home in Kendal, Windermere, Grasmere, Appleby or Kirkby Stephen. The most a very wealthy person could pay in council tax is three times more than the least wealthy person pays.
A solution is needed, and a proportional property tax potentially provides it. It would help us to move away from a council tax that pushes people into poverty, makes them pay bills they cannot afford, adds to the cost of living crisis in my communities and others and distorts a housing market that is already not normal, exacerbating the problem. In an area like my constituency, where there are 6,000 people on the council house waiting list and a minimum of 7,000 second homes, we can see that problem. I am proud that Westmorland and Furness Council took up the Government’s new permission to double council tax on second homes, but that is still a minor blip for somebody who can afford a £750,000 extra home in the Lake district.
This new tax would allow us to use sliding scales and surcharges to ensure that people pay a fair amount for the property that they have. A wealth tax would take account of their ability to pay and would therefore allow a massive majority of my constituents, and everybody else’s, to pay a more reasonable amount. In my community, the average house price is about 12 times the average income, so the average person is completely snookered when it comes to getting into the market. This new tax would allow us to do something about the distortion that council tax brings about by encouraging people to live in homes for which they do not pay a fair value, while a massive majority pay far too much. I agree that encouraging downsizing is a really important way of at least alleviating the housing crisis, but because the proportional property tax would be payable on undeveloped land with planning permission, it would bring into use predominantly brownfield sites so that we could actually get homes built.
We want to tilt the scales against second homes and towards first homes in communities like mine. If levelling up is to mean anything, we surely want to shift towards a system that disincentivises multiple home ownership and property investment, and incentivises people to have homes as homes.
It is a pleasure to serve under your chairmanship, Mrs Harris. I thank my hon. Friend the Member for Barrow and Furness (Simon Fell) for securing this important debate. Hartlepool has one of the highest council-tax-to-property-value ratios in the country. I pay three times more in council tax for my home in Hartlepool than for my rented London work flat, despite that flat being worth many times more than the Hartlepool home. That high cost is simply unfair on my constituents, and there is an urgent need for reform.
Reform based on a proportional property tax such as the one proposed by the Fairer Share campaign would save my constituents £950 on average. The question must be asked, though, why council tax is so high in Hartlepool and so comparatively low in Westminster. It is fair to concede that we have a larger number of band A properties in Hartlepool and more deprivation, so arguably bringing prosperity to the town will help to ease the council tax burden. Sadly, we also have many children in care, and Hartlepool Borough Council spends many thousands of pounds per week per child in care. That accounts for a large proportion of our council tax. I have also been told that the council spent over one third of a million pounds in one year with just one taxi company running children around.
The Conservative-independent coalition has been in power for only the past two years, and a ship as cumbersome as Hartlepool Borough Council takes more time than that to turn around. However, the local Labour party’s recent success in the local elections was based largely, I suspect, on its manifesto pledge to freeze council tax this coming year. I support council tax in Hartlepool being frozen, just as it was by the newly elected Conservative-led coalition in 2021—interestingly, that was not supported by the Labour group at the time, but now it has decided that it should be frozen. If the Labour group thinks it can freeze it, I think the Conservative-led coalition can do better. I will work with the new Conservative leader, examine Hartlepool’s accounts, sharpen our pencils and find a way to cut it. This is not an empty, unicorn promise to put on a local election leaflet; the local election is done. It is something that I believe should be done for the good of the people of Hartlepool.
I am not here to comment on comparisons between Westminster and Fife, but clearly huge amounts of money have been squandered in Hartlepool without any care. It has been the usual Labour spending of other people’s money—very sadly, as that money belongs to the hard-working families I represent. However, cutting council tax in Hartlepool is something for the short term. Looking further forward, we must find a fairer way for communities like mine. Councils must not be allowed to see this as carte blanche to go on careless spending sprees.
Councils run by Conservatives, with better fiscal responsibility, invest their money wisely. They do not fritter it away on vanity projects. They keep a rein on their public spending. They also invest in order to have other income streams than just asking for more handouts from their council tax payers and the Government. We have seen that in Hartlepool in the two short years of the Conservative-led coalition, which has worked with me to secure investment in the town and provide more jobs, for example at the Northern Studios and the production village led by the internationally acclaimed Northern School of Art. A proportional property tax would enable us to continue to deliver good services and to invest in prosperity-generating projects, while lowering the financial burden on the local community.
I thank the hon. Member for Barrow and Furness (Simon Fell) for securing this important debate. It is good to see cross-party consensus; I hope the Minister will note that it is not a party political issue. I also pay tribute to my hon. Friend the Member for Easington (Grahame Morris) for his work in highlighting the problems with council tax.
We all know that council tax is flawed. Our constituents know it, we know it and the Government know it, too. The reality of council tax is that it is making councils overly reliant on locally raised revenue streams in order to offset Whitehall cuts. What makes the situation even worse is just how regressive council tax is. It baffled me when I was a local councillor, as it still does, that council tax is based on property valuations made in 1991, over 30 years ago. It was supposed to be revised periodically, but that has never happened in England. Housing inflation since 1991 has made those valuations nonsensical. Crucially, it means that the richest households, who live in the most expensive houses, are not paying their fair share. Billionaires in London will pay the same tax as someone occupying a modest property. Council tax has become like the “community charge”—the poll tax—that it was supposed to replace.
I appreciate that the Minister could not announce a policy change here in Westminster Hall today even if he wanted to, but can he give us a sense of what is happening in the Department on this issue? Last November, at a sitting of the Levelling Up, Housing and Communities Committee, the Secretary of State said that the Department was looking into local government finance. Where has that process got to? When are we likely to hear again from the Secretary of State? Will we see a Green Paper? More broadly, can the Minister share his thoughts on re-evaluating property prices? As I said, the current valuations are over 30 years old. I would appreciate an answer from him on those points.
The cost of living crisis is affecting all our constituents. It is leaving people with extremely difficult choices to make. In many cases, their choice is between heating or eating. These are the families who desperately need our vital public services. Replacing council tax with something progressive, as well as adequate funding from Whitehall, would ease the burden on those families and strengthen our public services locally. We need to do this as a matter of urgency.
Thank you, Mrs Harris, for calling me to speak. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Barrow and Furness (Simon Fell) on securing this debate.
The council tax system is fundamentally flawed. As we have heard from the hon. Member for City of Durham (Mary Kelly Foy), the property values are from 1991 and are in many cases entirely hypothetical, leading to individuals paying a higher share of their property value and an ever-increasing share of their income.
Analysis by Fairer Share computes that almost 99% of the 50,000 homes in Darlington could benefit from a reduction of approximately £750 a year in their local council tax. That is a significant saving for every home in my constituency. We cannot ignore the potential savings for that community.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and I declare an interest: I was a high street solicitor prior to being elected to this place. I saw on a daily basis the adverse effects on the housing market of stamp duty, which is putting a barrier in the way of home ownership and home moves, causing a bunching of pricing where tax levels change and, basically, using the legal profession as an unpaid tax collector.
A reform to local council revenue and housing market taxes is overdue. Some 30 years since its introduction, we must consider alternatives to council tax. There is the potential to make the system significantly fairer for some of our poorest communities across the country, and we should not dismiss the idea of a proportional property tax too quickly. I look forward to the Minister’s considered responses and thoughts on the matter.
I congratulate the hon. Member for Barrow and Furness (Simon Fell) on securing this important debate on alternatives to council tax and stamp duty.
The Government need to look at more progressive alternatives to council tax, which is very regressive, as has been said. I draw hon. Members’ attention to the work of the Fairness Foundation. Its important research on this very issue, which is out later this week, makes the point that low-income households spent two to four times more on council tax, as a percentage of their income, than richer households. The research also makes it clear that people want the Government to do more to tax the richest in society. Council tax is deeply regressive, so the Government must lay out alternatives. Some 68% of people think that the Government should be doing more to tax high net worth individuals—those with £10 million or more—and 79% of people worry that the wealthy do not contribute their fair share. It will be no surprise to hon. Members that I encourage the Government and the Minister to consider real wealth taxes on the very richest.
I also draw hon. Members’ attention to a campaign that is being run by the community union ACORN, which argues that when the Levelling-up and Regeneration Bill becomes law, councils should implement a 100% council tax premium on second homes and empty homes to help to fund important expenditure on council housing. I have lent my support to the campaign, and I will support that proposal if and when the Bill becomes law. We have heard about the issue of second homes and holiday homes, which could be looked at. I encourage the Minister to look at the Fairness Foundation’s research when it comes out later this week; it is about what can be done to move to a more progressive taxation system in which the super-wealthy pay their fair share.
Thank you so much for calling me to speak in this very important debate, Mrs Harris. I pay tribute my excellent colleague, my hon. Friend the Member for Barrow and Furness (Simon Fell), for bringing this debate to Westminster Hall.
West Dorset has one of the highest council tax rates in the country. Council tax for the average band D property is in the region of £2,300 per year, which is absolutely outrageous. There are many different components to that: council tax is one, but the revenue support grant—I have lobbied long and hard for its review—also needs to be considered. It is fundamentally wrong that London boroughs, which are often Labour-led, have revenue support grants of £24 million-plus, yet in Dorset we have a revenue support grant of virtually zero.
We do not have to go very far to understand why council tax is higher in rural Britain than in urban Britain. We should pay tribute to the Fairer Share campaign. Its work is excellent; I wholly support it and shall continue to do so. West Dorset, for example, has one of the highest average ages: a third of my population is over 65. That has an associated social care requirement, which is funded through council tax. The burden on local people is therefore much higher than it may be in other areas, such as the London Borough of Wandsworth. That London borough has one of the lowest average ages in the country, yet it receives tens of millions of pounds in revenue support grant. That is wrong, and it needs proper review.
I hope that the Minister hears my message loud and clear. We all expect a full review of council tax and the different levers that contribute to it, as many of us have argued long and hard in debates on local government finance motions.
It is a pleasure to serve under your chairmanship, Mrs Harris. I thank my hon. Friend the Member for Barrow and Furness (Simon Fell) for securing this important debate. Like other hon. Members, I feel that council tax needs to be reformed, but I want to limit my contribution to the nuanced empty homes premium that exists in the current council tax structure, which is unfairly disadvantaging many of my constituents in Keighley and Ilkley and many people across the country.
Since 2013, local authorities in England have had discretionary powers to charge additional council tax on properties that are unfurnished for two years or more, with more tax being charged the longer the property is unfurnished. In my constituency, Bradford council charges 200% after two years, which rises to 300% after 10 years. The policy might have been introduced for all the right reasons at the time: discouraging individuals from banking multiple properties, and encouraging empty homes to be brought back into the fold. However, that tax hike has had unintended consequences.
As the housing market is being squeezed and young families struggle to get on the housing ladder, that additional tax on home buyers—particularly on young families who might want to buy an empty property, renovate it and do it up, but are unable to do so in the two years of free time that they have before the 200% kicks in—makes it unachievable. When many are struggling to get builders and contractors in, and might find difficulties because the home is not in the condition they thought it would be in and they have to make it adequate and fit to live in, the 200% increase through the empty homes premium is having a negative impact on the many householders who want to do up their properties.
There is also an impact when individuals want to sell a property but cannot sell it within the period of time that the home is vacant. The Treasury has indicated that that is something that it is likely to review; the levelling-up White Paper is also looking at reviewing it. My plea to the Minister is that he look at the negative consequences of the empty homes premium when carrying out a further report.
Thank you for your diligence in chairing the meeting this afternoon, Mrs Harris. It has been a busy debate, so it has not been the easiest job.
I congratulate the hon. Member for Barrow and Furness (Simon Fell) on securing this debate. It is important that we discuss and think about the future of tax policy. Too often, there are only seven of us in the Chamber when tax policy is being discussed, so it is nice to see such a full room talking and thinking about the future of tax.
The situation in Scotland is similar but different: we have council tax and we have stamp duty, but it is now called the land and buildings transaction tax and is structured slightly differently. We introduced the LBTT in 2015, and it has been in place since then. The charge we pay in Scotland is more proportionate to the property price than stamp duty is in England, and we have a slightly different system that means that 40% of people who buy houses—it is separate from the additional dwelling supplement—do not pay any LBTT. Also, if a property is under £175,000—the majority of first-time buyers buy at that level—the LBTT is not payable at all.
On the point about stamp duty and similar taxes, does the hon. Lady agree that there is an opportunity to graduate those taxes to reflect the energy performance of a building so that we might encourage people to retrofit buildings and use the tax regime in a way that would meet some of our carbon targets?
I had not considered that before. It is very novel, and a good idea that should definitely be considered.
We are looking at council tax reform in Scotland. We agree that the system is not currently as fair as it could be. The Scottish Greens, along with the SNP and the Convention of Scottish Local Authorities, are planning short-term reforms and looking at how to approach long-term reforms to council tax. We also have a more proportionate system in Scotland for council tax. The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about the amount that the highest payers pay, compared with the lowest payers. It is different in Scotland, where it is higher for those at the top.
Council tax is significantly less in Scotland, as my hon. Friend the Member for Glenrothes (Peter Grant) mentioned. Our properties are £600 less for a band E property on average across Scotland compared with England. The Scottish Government have committed to abolishing council tax for anyone under the age of 22. That flies in the face of what the UK Government are doing, which involves paying young people less, giving them less in benefits and, basically, disadvantaging them at every opportunity.
We also have a situation whereby people who were looked-after children on their 16th birthday will be eligible for a council tax reduction to zero until their 26th birthday. We have put that in place because we recognise the hardship that young care leavers feel in many areas of life, so things are slightly different in Scotland. We still do not have as fair a system as we would like, and we are still looking to reform it, but we are committed to making those changes.
It is a pleasure to speak in the debate with you as Chair, Mrs Harris. I thank the hon. Member for Barrow and Furness (Simon Fell) for securing it, and I particularly thank my hon. Friends the Members for Leeds East (Richard Burgon) and for City of Durham (Mary Kelly Foy) for their contributions.
I am sure we will shortly hear from the Minister about whether the Government have any plans to introduce a new system of property taxation. However, if they were to agree to develop and implement a new system, it would clearly take some time. They could already be helping working families by freezing council tax this year, which could be funded by strengthening the windfall tax on oil and gas producers. As the Minister will know, I and my colleagues have been deeply concerned about the increase in council tax that the Government have forced on local authorities and households this year. That tax rise has taken the bill for a typical band D property above £2,000 for the first time. It comes in the middle of a cost of living crisis and from a Government who have been responsible for 24 tax rises and for making the tax burden the highest in 70 years. At the same time, they have refused time and again to close gaps in the windfall tax on oil and gas producers’ unexpected and excessive profits. We have long said that it cannot be right for the Government to leave money on the table like that while pushing up taxes yet again for working people across the country.
The debate is focused on stamp duty as well as council tax. The last time the Government made significant changes to stamp duty was in autumn last year. The main change was to increase the nil rate threshold for stamp duty payments on residential properties, effectively by removing the lowest band. The changes were introduced by the previous Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), under the brief premiership of the right hon. Member for South West Norfolk (Elizabeth Truss). They were continued by the current Chancellor and Prime Minister—albeit on a time-limited basis—at a cost to the public finances of £1.7 billion a year. We opposed those plans and made it clear at the time that it would not have been right or responsible to support them. Given that our economy was reeling from the long-term damage the Government had done, with current and future homebuyers facing a Tory mortgage penalty, this was not the time to spend £1.7 billion a year on that tax cut. Despite that, the Government pushed ahead. So when it comes to stamp duty, it is clear that they do not have a record of spending public money wisely.
As I said, we opposed the stamp duty cut because it is not a way to spend public money wisely. We are clear that a Labour Government would spend public money wisely, making sure that we eased the burden on working people, who are suffering the highest tax burden in 70 years. I will be interested to see whether the Minister attempts to defend the mini-Budget stamp duty changes. Will he also defend the Government’s council tax rise and their failure to strengthen the windfall tax?
I will conclude, because I am conscious of the time. The Opposition believe that our country needs a tax system that is fairer, not one in which an ever greater burden falls on working people, and that is what we will continue to fight for.
It is a pleasure to see you in the Chair, Mrs Harris, and to serve under you today. Let me join others in congratulating my hon. Friend the Member for Barrow and Furness (Simon Fell) on securing this well-attended debate. I note the largely cross-party nature of the contributions—with the exception of the speech by the hon. Member for Ealing North (James Murray)—and I will try to reflect that in my tone. We welcome this opportunity to discuss the important issue of property taxation, including the current status of council tax and stamp duty. I have heard the concerns that have been articulately put on behalf of Members’ constituents in many different parts of the country, and those concerns have been thoughtful and constructive.
For many people, council tax is the most fundamental tax: we pay it every month, it is highly visible, it has an impact on all sorts of important decisions and, when we pay it, we know what services we are getting for it. It has the strength unique in the taxation system of being local and personal. That is not to say that it is perfect, and we have heard today about some of the difficulties manifested in some communities.
Importantly, council tax is set, collected and retained by democratically elected local authorities, and I ask colleagues to think about that as we think about potential reforms. It ensures that households contribute to the cost of local services, whether that is fire and rescue, refuse collection, transport, libraries or—this is a particular passion for my constituents in Arundel and South Downs—dealing with potholes.
Council tax is a well-understood tax and has a high rate of collection and a stable base. It does not, for example, go up and down with property prices, as some potential alternatives might. Therefore, it gives local authorities a strong degree of certainty in their financial planning. On aggregate, it raises about £36 billion for local councils in England. That is about 57%—very importantly, the majority—of their core spending power. Council tax is the largest single source of revenue for local authorities. To ensure fairness, it is mitigated—we heard a little about this—through a range of reliefs, such as support for those on low incomes, a reduction for those with a disability and an exemption for students.
Stamp duty is an efficient tax to administer and collect. It raises a really substantial sum—£14 billion that the Government use to pay for essential services, such as the NHS, schools and police.
So these are not easy issues. For all of us thinking about the best way forward and about how to chart a course for reform, this issue does pose questions that are worth thinking about. Notwithstanding the advocacy of the proposal from many hon. and right hon. Members in the debate, neither the Opposition Front-Bench spokesman, the hon. Member for Ealing North, nor the distinguished hon. Member for Westmorland and Lonsdale (Tim Farron) actually went to the point of committing to make this change, so I would contend that there is a little more work to do.
At least we agree that we are no longer a United Kingdom—I am pleased to agree with the Minister on that.
Given the increasing complexity and scale of services that local government in Scotland and England has to provide, does the Minister see any benefit in giving councils the power to raise taxes based on something other than simply property values? Is it time to broaden the base so that they can raise their own incomes tax, VAT, sales tax or tourist taxes—or are the Government obsessed with the idea that their core tax will always be based on imaginary property values?
In the interests of trying to reflect the views of hon. Members, I will not be distracted by that interesting idea. Again, the proposal that has been put forward does acknowledge the opportunity for local authorities to diversify their sources of revenue. One of the issues that, as a democrat, I find most problematic with this proposal is the impact it would have on local authorities. Their ability to raise revenue for themselves would be taken away, which would be one of the single biggest—and adverse, in my view—issues for local government. The system is often accused of being overly centralised, but this proposal would absolutely remove any ambiguity whatever, and that is something that the advocates of this proposal may want to think about.
Higher bands have been introduced over time. It has been a long time—just as a point of fact—since there has been a revaluation. I note that both the Labour party and the Liberal Democrat party served in Government for significant periods during that time, so it is not just among Government Members that there is caution about some of the unintended consequences of doing something that affects so many people. The impact on those with low and fixed incomes of moving any sort of basis of property tax should be thought about carefully.
The hon. Member for Leeds East (Richard Burgon) was candid about his desire to soak the rich with wealth taxes. What we are talking about would effectively be an imperfect wealth tax, because it would be a tax on that proportion of wealth that relates only to residential property and it would not be comprehensive. For that reason, there would be people who were asset-rich but cash-poor, such as widows, who would have to think through the consequences.
Moving towards a more periodic review of values poses the question of how that revaluation would take place. Certainly, some of us are shy of algorithms, but in all likelihood, unless we were to recruit an army of estate agents-meet-inspectors, we would be using some algorithmic method. In fairness, colleagues on both sides have talked about the status quo, but there would also potentially be unfairness in a mechanistic approach.
The Minister is being incredibly generous in giving way. In the short time available to him, he is providing a thoughtful critique of the proposal that has been put to him, and he is entitled to do that. He correctly says that none of the parties represented here is saying that this will definitely be in their manifesto, although I think we should all consider it. However, I would love him to consider the fact that the Fairer Share approach is cross-party. The people who have been advocating for the Government to think about this have made an extensive critique of council tax and how unfair and outdated it is. On the table is something that is potentially better. I would love the Minister to look again at council tax to see whether there are ways in which he could make it fairer.
I hear the hon. Gentleman, and I look forward to reading his manifesto—whether it is for his party or for the coalition that his party and the Labour party both seem very keen on.
As we think about proposals, we must think about democracy and about the potentially disempowering impact on local government, of which I suspect that most colleagues are strong advocates. There is also the issue of accountability. My hon. Friend the Member for Hartlepool (Jill Mortimer) talked about the debate going on in Hartlepool, and I suspect that it is one of the livelier debates that local people are having. However, it would not be able to take place if these things were simply set in Whitehall and the money was distributed algorithmically.
My hon. Friend the Member for West Dorset (Chris Loder) talked a little about the compensating mechanisms of revenue support grant. The Government are levelling up in many ways, but that is another way in which we can seek a fairer outcome for our constituents.
I am quite sure that my hon. Friend, who is an effective champion for his constituents, will continue to prosecute his case, but he will understand if I do not give that commitment here and now.
My hon. Friend the Member for Barrow and Furness and others talked about second home ownership. We understand that, and I have a proportion of second homes in my own constituency. As colleagues know, proposals on the table in the Levelling-up and Regeneration Bill would allow councils local and democratic discretion to attract a council tax premium that goes some way to address that issue. However, we should be cautious. Those homes already bring a disproportionate amount of net benefit to local councils, simply because they pay the full rate of council tax, but do not consume at the same intensity. The ability to have them pay double will increase that further.
Let us remember that this is not a simple issue. The work-from-home, hybrid economy blurs the line. Hon. Members—probably almost uniquely as a group—understand that people may work in one place and live in another, so the line between a first and a second home can be blurred. We should be cautious about discriminating on tax grounds against the person who chooses to work and rest in two different places, in two small homes, rather than in a single home of equivalent value. I offer that to hon. Members as a potential mitigant as we think about this issue.
Today, we have heard some thoughtful proposals, and a number of points have been made on both sides. In conclusion, these issues are important, and there are real consequences not only for our constituents, but for the housing market, in which, as one hon. Member said, there is already substantial intervention. We need to think through the unintended consequences at every point. Help to downsize would be one potential benefit for us all.
The Government will continue to act where appropriate to do so. I thank hon. Members for their thoughtful contributions. In securing the debate, my hon. Friend the Member for Barrow and Furness has allowed us to hear a variety of different contributions from all parts of the House. The Government will keep listening on this important topic.
I shall not sum up further than the Minister has so ably done already, other than to thank you, Mrs Harris, for chairing and to thank Members from both sides of the House for putting politics to one side, embracing an idea and fighting for it. From Fife to Dorset, and from Cumbria to Durham, I think we have put together a rainbow coalition in support of reform. I am glad my hon. Friend the Minister is listening to the calls for reform. We have a piece of work to do to convince him about the democratic deficit of the proposals, but I am convinced we can do it.
Before I put the question, I thank all Members for their discipline and consideration this afternoon in making sure that all who wanted to speak had an opportunity to do so.
Question put and agreed to.
That this House has considered the matter of alternatives to Council Tax and Stamp Duty.